SINGAPORE (Apr 10): Analysts say Singapore Press Holdings’ (SPH) 2Q19 results came in below expectations amid continued weakness in its media business, coupled with the absence of divestment gains from its treasury and investment portfolio.

See: SPH posts 26% fall in 2Q earnings to $29.7 mil on lower revenue, higher costs

“[SPH’s] media business [is] still not a pretty sight,” says CGS-CIMB Research analyst Ngoh Yi Sin in a Tuesday report. “While 2Q is a seasonally weaker quarter, we were negatively surprised by the 13.8% y-o-y decline in media revenue, possibly reflecting some frontloading of sales in the prior quarter.”

CGS-CIMB is maintaining its “hold” call on SPH with an unchanged target price of $2.64.

The brokerage expects SPH’s earnings per share (EPS) to fall by 4.4% to 5.4% for FY19-21, on assumptions of lower media revenue and investment income.

Over at OCBC Investment Research, analyst Joseph Ng also says SPH’s 2Q19 results came in “below expectations”.

“Accounting for one-offs, core PATMI came in at $29.7 million, comprising 13.4% of our full-year forecast,” Ng says.

Ng also notes that SPH has declared a lower interim 1H19 DPS of 5.5 cents, compared to 6.0 cents in the corresponding half-year period a year ago.

OCBC is keeping its “hold” rating on SPH, but is placing it fair value estimate of $2.55 under review

However, UOB Kay Hian believes SPH’s 2Q19 results are “broadly in line with a seasonally weaker quarter”.

Excluding one-off fair value gains, core net profit was at $32 million for 2Q19 – only 1.5% lower than a year ago, lead analyst Lucas Teng says in a Wednesday report.

“1H19 core net profit came in at $89 million, forming 43% and 41% of our and consensus estimates respectively, in line with expectations,” Teng adds.

Teng notes that SPH’s property segment saw top-line growth of 20% y-o-y, boosted by the addition of the Mayflower purpose-built student accommodation (PBSA) portfolio as well as the acquisition of Figtree Grove Shopping Centre in Australia.

“SPH’s defensive strategy remains intact with the addition of new student accommodation assets,” Teng says.

UOB Kay Hian is keeping its “buy” call on SPH with an unchanged target price of $2.82.

As at 4.33pm, shares in SPH are trading 2.8% down at $2.46. According to CGS-CIMB valuations, this implies an estimated price-to-earnings ratio of 20.0 times and a dividend yield of 4.4% for FY19.