Singapore Press Holding Share Price Is Down By 27% In The Last 12 Months. Here’s Why.

Singapore Press Holdings Limited (SGX: T39) or SPH is a publisher of newspapers such as The Straits Times, The Business Times, The New Paper, Berita Harian, My Paper, Lianhe Zaobao and others.

It is also in the real estate business and other activities like events management. As part of the firm’s real estate activities, it is the majority owner and manager of SPH REIT (SGX: SK6U), a real estate investment trust that owns shopping malls in Singapore.

In the last 12 months, the company’s stock price is down by 27%. In this article, we will try to understand what might have caused the decline.

Reasons for decline:

There are many reasons that cause a stock price to move. Generally, stock price movements are driven either by business performance or investor’s sentiment.

The former is related to how a business has performed in a given period by looking at growth, margins, production and others. Here, the ultimate driver is profit.

The latter is driven more by investors’ overall mood, which is described by emotional pairs such as greed and fear, optimism and pessimism, bull and bear markets etc…

In this case of SPH, I believe it’s the former that better explains the decline in share price. Here’s some figures to justify my point:

Source: SPH FY17 Q3 Result Presentation

We can see that all the measures of performance are down on a year-on-year basis.

The declines have been mainly driven by the weak performance of the media business and also impairment charges related to the media business, goodwill and intangible and an associate.

In conclusion:

Clearly, the weaker financial performance have impacted the stock price. Moreover, there is no immediate sign of a turnaround in the media business.

On a positive note, SPH’s property business remains resilient, with third-quarter net property income (NPI) up by 5.7% year-on-year.

In summary, for SPH’s share price to turnaround, investors should pay attention to a turnaround of its media business, which has been trending lower for the past few years.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.