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Will Singapore Press Holdings Be Of Interest To This Investing Legend?

Singapore Press Holdings (SGX: T39) is the only media conglomerate listed in Singapore and its reach and presence is likely well felt among Singaporeans.

For instance, the company owns Singapore’s most widely circulated news publication, The Straits Times. Radio and television channels like Kiss92 FM and Channel 5, respectively, falls under its banner; retail malls like Paragon and Clementi Mall belongs to its portfolio; and it even owns popular online portals like Stproperty.sg. With such a wide range of businesses, would Singapore Press Holdings be of interest to the legendary investor, John Neff?

Neff’s Style

In a previous article, I ran through the main tenets of Neff’s investment style and it could be summarised as such: Neff prefers companies that carry low price/earnings ratios; have strong business fundamentals; and be able to grow by at least 7% per year. Using Neff’s framework, let’s see if Singapore Press Holdings would hold up in his eyes.

Business Segments

Singapore Press Holdings is a company that operates in seven business segments:

1. It publishes 19 newspapers, which has a readership audience of more than 3 million.

2. It’s a magazine publisher, with more than 100 titles under its belt.

3. It’s a book publisher, and an accomplished one at that given its publication history of great books which include the memoir series of Singapore’s first prime minister, Mr. Lee Kuan Yew.

4. It has a big presence on the internet with its websites garnering more than 20 million unique viewers per month.

5. Broadcasting is part of its forte through wholly-owned subsidiaries and a 20% interest in commercial media company MediaCorp TV Holdings Pte. Ltd.

6. It organizes events like trade shows and exhibitions.

7. Lastly, it’s also involved with real estate through its majority ownership of SPH REIT (SGX: SK6U), a real estate investment trust which owns Paragon and Clementi Mall. Singapore Press Holdings has another retail mall, Seletar Mall, that would be ready by the end of this year.

Growth Prospects

Although most of Singapore Press Holdings’ businesses have strong business fundamentals and can be considered as market leaders in their fields, many of them are operating mainly in Singapore.

This is a challenge as the media business in Singapore is very much saturated and might not have much growth ahead. Furthermore, with the rise of the internet, traditional media such as television and newspapers are now facing global competition instead of the more localised competition of old. The onset of much tougher competition is also evident from how news readership trends have been stagnant for the past 10 years at the company.

Singapore Press Holdings’ real estate arm, SPH REIT, seems to be the only business that has the ability to scale up considerably for the next few years.

Valuation

Based on its earnings per share of S$0.267 for the last 12 months, Singapore Press Holdings is valued at 16 times trailing earnings at its current share price of S$4.22. That’s somewhat higher than the Straits Times Index’s (SGX: ^STI) P/E ratio of 14 if we’re using data from the SPDR Straits Times Times Index ETF (SGX: ES3) as a proxy.

Foolish Summary

So, if we put everything together – Singapore Press Holdings’ fundamentals, future growth rates, and current valuation – it would seem that Neff might not have enough reason to get excited about the company.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.