CGS-CIMB analysts have kept their “hold” call on Singapore Press Holdings but with a higher target price of $1.31 from $1.10 previously, to factor in higher value of its investment in its associate iFast Corp, whose share price had surged more than 50% year to date.

In its business update for 1QFY21 ended Nov 2020, SPH reported total circulation increased by 1.8% y-o-y, with digital circulation up 42% y-o-y, accounting for 52% of total circulation, overtaking print. 

It reported that print revenue dropped by 36% y-o-y and digital revenue dropped by 8.1% y-o-y too, as companies withhold advertising and promotional activities. However, on a q-o-q basis, advertising revenue improved thanks to a pick-up in sentiment towards the end of last year.

“We think raising prices of subscriptions would be one of the immediate ways to lighten the impact of a structural decline,” writes analyst Eing Kar Mei and Lock Mun Yee in their Jan 18 note.

SEE:UOB Kay Hian maintains its 'hold' call on SPH for undemanding valuation and uncertainty on impact of its property assets

The media business aside, SPH is seeing better metrics for its retail property, students’ accommodation. Its Orange Valley nursing homes business improved too, with occupancy up from 80% to 81%.

A current residential development project, Woodleigh Residence, is now 60% sold as at Jan 8 2021, versus 56% sold as at Oct 4 2020.

At current levels, SPH is trading at just half its book value, which is 2 standard deviations below its five-year mean and therefore downside has been priced in. Using Eing and Lock’s sum of the parts valuation, it implies the media business is valued at next to nothing. 

They believe that if SPH goes ahead with the talked about “value unlocking” of its students’ accommodation assets, their target price can potentially go up to $1.41.

As at 11.04 am, SPH was trading flat at $1.21.