SPH – CS

Newspaper ad demand picked up further in March

• According to the CS Page Monitor, newspaper ad demand picked up further in March.

• Estimated total classified volumes jumped 18% YoY in March – a big improvement from the estimated 7% decline in 2Q classified volumes. The strong showing is again attributable to a 71% YoY surge in job ad volumes (estimated at 71% in March). The strong job ad demand is in line with the healthy pick-up in the Singapore economy.

• Further, there is a sharp turnaround in non-job classified ad volumes – from an estimated -17% YoY for 2Q10E to +1% in March. In addition, our page count indicates that display ad volumes improved 14% YoY in March, versus +6% estimated for 2Q0E.

• SPH is scheduled to release its 2Q10 results on 13 April. We expect further consensus EPS upgrades after the results – our FY10 earnings forecast is 7% above street expectation.

• Our target price of S$4.67 represents 22% potential upside from here. We maintain our OUTPERFORM rating.

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