SPH

[Research Department]

Question asked:

Why is SPH stock is on the down and hovers at 2.3-2.55 from where it used to be at 3 on average over the last few years ?  How SPH shares would fare in the next two years?

 

Answer:

We do not have research coverage on SPH. But we believe a reason for the share price weakness has been the decline of the high margin classifieds advertisement (recruitment and notices) revenue.

For instance, YTD3Q19, classified revenue was S$69mn. 2 years ago, the amount was S$98mn, a 30% drop. And the decline is not slowing down.

To offset this weakness, SPH is looking to expand the digital advertisement revenue and expand property income through investments in student dorms.

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