Singapore Stocks - SPH alls to 1-mth low after Q2 results

Singapore Press Holdings Ltd (SPH) fell to the lowest in a month after the media and property firm posted a 15 percent drop in second-quarter net profit.

Shares of SPH fell as much as 5.9 percent to S$4.33, the lowest level since March 11. It is the most actively traded stock by value with about 18.6 million shares traded, 3.2 times the average full-day volume over the past 30 days.

SPH reported net profit of S$71.5 million ($57.8 million) for its second quarter, down from S$84.1 million a year earlier, hurt mainly by weaker advertisement revenue.

SPH's core media business is expected to continue facing headwinds, Citigroup said, noting that the company is struggling to turn around falling circulation revenues despite its subscription drive.

Citi added that SPH's property division remains a bright spot, but its contributions were not enough to offset the weakness in the core media business.

CIMB Research downgraded SPH to 'underperform' from 'neutral'.

"We think it is still unclear if spinning off its prized property assets into a REIT creates shareholder value. This, coupled with the weak ad environment, suggests that the recent 10 percent run-up in the share price may be overly optimistic."

However, Maybank Kim Eng maintained its 'buy' rating and S$4.95 target price on the stock. The broker expects a recovery in the next quarter, especially in property advertising revenue.

It added that the proceeds from a REIT spin-off are likely to be reinvested to pursue a better return. SPH could become more aggressive in the property sector or make more acquisitions in areas such as internet and digital media, the broker said.