Author: tfwee
SPH – DMG
Investment gain boosted earnings
SPH reported 1QFY10 results, net profit of S$144.7m, up 98.2% YoY (+7.1% QoQ) as a result of the S$10.2m mark-to-market gain from investment, compared to the S$33.7m loss registered in 1QFY09. Stripping out the fluctuation from investment income, recurring income would have risen by
24.7% YoY. Maintain NEUTRAL as valuations appear fair. We derive a target price of S$3.86 based on SOTP valuation.
Recovery in core publishing business? SPH’s newspaper and magazine revenue fell 2.5% YoY as a result of falling advertisement revenue (-3.1% YoY). Circulation revenue also fell by a marginal 1.1% in line with lower circulation copies sold. We, however, believe the partial restoration of pay cuts is a signal of management’s confidence of an earnings recovery in its core publishing business. Management has indicated signs of a gradual recovery and expects advertisement revenue to improve in tandem with the underlying economy.
Cost set to increase following wage restoration. Whilst advertisement revenue is expected to rebound in 2010, we expect an increase in the group’s operating expenses, in particular staff cost, which is projected to increase by 6.3% in FY10. We estimate every 10% increase in staff costs will decrease the group’s earnings by 6%.
Trading at the higher range of its 10-15x P/E trading band. SPH currently trades at 13.9x FY10 P/E, in line with its 2005-08 average. Maintain NEUTRAL rating on SPH with target price of S$3.86. We believe SPH’s attractive FY10 yield of 6.5% would provide support against significant downside risk. We recommend investors to await better entry level.
SPH – DB
1Q10 exceeds expectations; reiterate Buy
Strong 1Q10 ahead of expectations; reiterate Buy
SPH reported S$145m 1Q10 net profit, significantly ahead of DBe (S$120-125m) and consensus. While 1Q10 revs were generally in-line with DB estimates, the 51.3% 1Q10 EBITDA margin exceeded our expectations largely on lower-thanexpected newsprint costs. Elsewhere, Sky@eleven is on track for 2010 completion while Clementi Mall is expected to be operational in 1H11. We remain positive on SPH given the expected sharp 2010 adex market rebound. In addition, given the strong 1Q10 results and 17% potential upside to our S$4.30 TP, maintain Buy.
Robust performance underpinned by adex recovery and opex savings
SPH’s 1Q10 revs +4% YoY to S$354m and represented 26% of DB10e. Although ad revs were down 3% YoY, they surged 19% QoQ on strong adex market recovery and the S$182m 1Q10 ad revs were in-line with our expectations. Rental income -3% YoY to S$29m, but SPH expects to maintain near 100% Paragon occupancy going forward. Sky@eleven revs recognized-to-date reached S$522m. 1Q10 EBITDA +21% YoY to a S$182m 6-year high as materials, consumables and broadcasting costs -29% YoY (1Q10 newsprint charge-out price -31% YoY to US$531), and core print EBITDA margin reached a 38.9% recent high.
Net profit +98% YoY on margin improvement and higher investment income
SPH booked S$10m 1Q10 investment income vs 1Q09’s S$34m investment loss. This, along with the margin improvement, drove a 98% increase in 1Q10 net profit to S$145m. Cash and deposit’s share of investible funds grew to 37% (vs 4Q09’s 30%) as SPH continued to adopt a “conservative stance” in asset allocation.
Maintain Buy with SOTP-derived S$4.30 target price; risks include adex
Our SOTP TP for SPH is S$4.30. We value the core media business using DCF (6.6% WACC & 1% g), Paragon at discount to book value, M1 at DB TP and investments as at end 4Q09. Key downside risks include adex volatility, economic growth, Sky@eleven construction progress and SPH’s investment income.
Thomson – BT
Thomson’s Q1 earnings climb 24%
It has completed business plan for second Viet project
INCREASES in in-patient admissions, deliveries and ancillary services helped Thomson Medical Centre, a healthcare provider for women and children, deliver a healthy set of results for its fiscal first quarter ended Nov 30, 2009.
Net profit rose 24 per cent year-on-year to $3.53 million, while revenue grew 14.6 per cent to $18.79 million.
Earnings per share were 1.21 cents, up from 0.98 cents.
Revenue from its hospital operations and ancillary services segment – which constitutes about three quarters of the group’s total revenue – was 10.9 per cent higher at $14.24 million.
Revenue from the specialised and other services segment jumped 28.2 per cent to $4.55 million as its Thomson Women’s clinics saw more patients.
Meanwhile, Thomson Women Cancer Centre, which has been up and running since February last year, has begun to contribute positively to the group’s bottom line.
Thomson also said in an announcement yesterday that a senior O&G specialist is expected to take up clinic tenancy in Thomson Medical in Q3 FY2010 while a new satellite clinic is slated to commence operations in Q3 FY2010.
Its hospital consultancy and management project in Vietnam – Hanh Phuc International Women and Children Hospital – will also start operating in Q3 FY2010. The group has completed the business plan for its second hospital consultancy project – a proposed women and children’s hospital also in Vietnam. A suitable land site in Hanoi now has to be found.
‘Our strategic intent is to leverage on our brand name to attract more senior O&G specialists to take up clinic tenancy and expand our reach via a wider network of satellite clinics islandwide,’ said executive chairman Cheng Wei Chen.
‘At the same time, we will continue to work with specialists and suitable business partners to grow organically and develop more value-added, efficient and effective services for our patients.’
Thomson rose half a cent in trading yesterday to close at 69 cents.
Thomson – DMG
Continues to deliver
Thomson Medical’s 1QFY10 results were within our expectations. Earnings jumped 23.9% YoY to S$3.5m on the back of a 14.6% YoY increase in revenue to S$18.8m, due to increased baby deliveries and higher utilisation of its specialist services. Its growing Thomson Women’s Cancer Centre (TWCC), which started operations in Feb 09 also contributed to the improved revenue. Going forward, its Singapore operations are expected to continue doing well, with the addition of another O&G specialist tenant in 3QFY10 and opening of new Thomson Women’s Clinics (TWC) in its network. Its Vietnam ventures are progressing well. Its hospital in Binh Duong is set to start operations in 3QFY10 and Thomson Medical has completed the business plans for another hospital project in Hanoi. Maintain BUY and target price of S$0.78.
JV with senior paediatricians to expand its services. As part of its plans for organic growth and to strengthen its position as a leading women’s and children’s healthcare provider, Thomson Medical will be establishing the Thomson Paediatric Centre (TPC) in a JV with two senior paediatric consultants to operate the Thomson Paediatric Centre, specialising in the management of children’s health. Previously, paediatric services at its hospital are provided by its tenant paediatricians. With this JV, Thomson Medical would be able to have a bite of the growing demand for paediatric services in Singapore and the region. TPC would also add to revenue growth going forward.
Patient admissions and baby deliveries expected to continue to improve. Thomson Medical continues to attract O&G specialists to set up clinics at its hospital. A senior O&G specialist will set up clinic at Thomson Medical in 3QFY10. With this, we expect the utilisation of its facilities to increase, thereby contributing to revenue growth. Coupled with its new resort-styled wards, we think that patient admissions (and in turn, baby deliveries) at Thomson Medical would increase as well.
Maintain BUY. We are maintaining our earnings estimate of S$14.2m for FY10. Our 12-month target price of S$0.78 is based on 16x FY10 earnings, a 20% discount to the larger industry players.
Thomson Medical
Financial Data
All the data are extracted from the results,
|
FY08 |
Q1 (Nov08) |
Q2 (Feb09) |
Q3 (May09) |
Q4 (Aug09) |
FY09 |
Q1 (Nov09) |
|
|
Revenue |
60,264 |
16,393 |
15,599 |
17,408 |
17,994 |
67,394 |
18,789 |
|
GP |
26,571 |
7,093 |
6,753 |
7,439 |
7,797 |
29,082 |
8,082 |
|
PBT |
13,757 |
3,605 |
3,679 |
4,204 |
4,194 |
15,682 |
4,330 |
|
Net Profit |
11,155 |
2,842 |
3,052 |
3,417 |
3,404 |
12,715 |
3,554 |
|
NPM |
18.51% |
17.34% |
19.57% |
19.63% |
18.92% |
18.87% |
18.92% |
|
Cash |
15,400 |
21,605 |
14,468 |
15,169 |
20,567 |
<- |
24,785 |
|
Loan – NCL |
2,720 |
2,380 |
2,040 |
1,700 |
1,360 |
<- |
1,020 |
|
Loan – CL |
1,360 |
1,360 |
1,360 |
1,360 |
1,360 |
<- |
1,360 |
|
NAV (ct) |
37.47 |
38.49 |
36.70 |
36.92 |
38.12 |
<- |
39.38 |
|
EPS (ct) |
3.84 |
0.98 |
1.05 |
1.18 |
1.17 |
4.38 |
1.21 |
|
DPS (ct) |
1.5 + 1.0 |
— |
1.00 |
— |
1.8 |
<- |
— |
Notes :
- All figures in S$,000 unless otherwise stated
- FY is End-Aug