Recommendation :  BUY

Fair Value           :  SGD 1.92

SPH is a leading media organization in Asia, which is in the process of innovating digitally to transform its media business to meet changing readership and advertisers’ needs.

To diversify its income stream beyond media which is seeing structural headwinds, the group has made moves beyond its core business to diversify its portfolio, including its acquisition of student accommodation assets overseas, positioning in the aged care market in Singapore (Orange Valley Nursing Homes) with plans for expansion in Japan with Bridge C Capital and acquisition of M1 limited (with Keppel Corp) in April 2019 to leverage on synergies and explore new areas of growth.

While a modest recovery path for the company’s key businesses is the base case ahead, supported by vaccine rollouts progress and global economic recovery, near term share price volatility is expected pending developments on the strategic review, which has lifted share price and raised optimism for potential value unlocking initiatives.

Source: OCBC Research - 6 Apr 2021