The incurred retrenchment costs of some $8 million will be recognised in 4Q20.
While advertising revenue for SPH took a severe hit during the economic downturn, digital circulation remained the only bright spot with a 53% growth y-o-y.
On the property front, sales for Woodleigh Residences have been “encouraging” during the circuit breaker, with 43% of the total units sold as at August 16, with an average agreement for sale and purchase (ASP) of $1,892 psf.
The group’s purpose built student accommodation (PBSA) has also achieved 83% of its target revenue for the coming academic year as of August 14, with local students accounting largely for the remaining bookings.
See also: SAC Capital initiates ‘buy’ on Sanli Environmental after $105.3 mil contract win from PUB
Potential catalysts include pick-ups in the footfall for SPH’s retail malls, bookings from international students for its PBSA, and a slower-than-expected decline in the media business.
“We input a higher conglomerate discount of 25% (previously 10%), given the severe adverse impact of the pandemic across all business segments for the group,” say Teng and Cheong.
“Current valuation appears undemanding at 0.5x book value although Covid-19 is expected to affect the valuation of SPH’s investment properties. We opine that a better outlook for its property assets could help re-rate the stock. Entry price is $1.00,” they add.
As at 10.11am, shares in SPH are trading flat at $1.08.
