Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> had been undergoing a strategic review - something long awaited, and perpetually not quite done. The outcome is going to disappoint some (thus my title).Today, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> made an <a href="https://links.sgx.com/FileOpen/Announcement.ashx?App=Announcement&amp;FileID=665172" target="_blank" rel="noopener">announcement</a> (<a href="https://links.sgx.com/FileOpen/Media%20Release.ashx?App=Announcement&amp;FileID=665173" target="_blank" rel="noopener">media release</a>, <a href="https://links.sgx.com/FileOpen/Analyst%20Briefing.ashx?App=Announcement&amp;FileID=665174" target="_blank" rel="noopener">analyst presentation</a>) that it would undergo a Proposed Restructuring (defined by a Business Restructuring Deed ("BRD")) which would spin off the Media Business into a Media Holdco which would be run as a not-for-profit in the form of a Company Limited by Guarantee (CLG), basically a charity in corporate form (subject to the Companies Act). The quick and dirty of the situation is that SPH is giving away 6.6% of its equity (and 12+% of its market cap) to the ether so that it is no longer carrying the media business around its neck like an albatross. The Media business has seen revenue declines in the traditional print space, and SPH Media ad revenue fell 39% from FY2018 to FY2020. Operating revenue in the past five years has halved, and in FY2020, the SPH Media business posted its first ever loss. H1 2021 has seen the run-rate worsen further. The idea is to give away the business, and assets to help it fund itself, to ring-fence SPH from SPH Media going forward, and to remove the strictures of the Newspaper and Printing Presses Act ("NPPA") which bind SPH today.One can think of it as an owner having to recapitalise a loss-making business before selling it for a dollar. Sometimes something is worth less than nothing. It is not a done deal. There are conditions to complete. But it is worthwhile looking at the before/after to determine the "value" of SPH going forward because while revenue will drop, operating profits should increase on a pro-forma basis, and dropping the NPPA restrictions has the potential to make things quite interesting in the medium-long-term.More below the fold.

Singapore Press Holdings (SPH SP) had been undergoing a strategic review - something long awaited, and perpetually not quite done. The outcome is going to disappoint some (thus my title).Today, Singapore Press Holdings (SPH SP) made an announcement (media release, analyst presentation) that it would undergo a Proposed Restructuring (defined by a Business Restructuring Deed ("BRD")) which would spin off the Media Business into a Media Holdco which would be run as a not-for-profit in the form of a Company Limited by Guarantee (CLG), basically a charity in corporate form (subject to the Companies Act). The quick and dirty of the situation is that SPH is giving away 6.6% of its equity (and 12+% of its market cap) to the ether so that it is no longer carrying the media business around its neck like an albatross. The Media business has seen revenue declines in the traditional print space, and SPH Media ad revenue fell 39% from FY2018 to FY2020. Operating revenue in the past five years has halved, and in FY2020, the SPH Media business posted its first ever loss. H1 2021 has seen the run-rate worsen further. The idea is to give away the business, and assets to help it fund itself, to ring-fence SPH from SPH Media going forward, and to remove the strictures of the Newspaper and Printing Presses Act ("NPPA") which bind SPH today.One can think of it as an owner having to recapitalise a loss-making business before selling it for a dollar. Sometimes something is worth less than nothing. It is not a done deal. There are conditions to complete. But it is worthwhile looking at the before/after to determine the "value" of SPH going forward because while revenue will drop, operating profits should increase on a pro-forma basis, and dropping the NPPA restrictions has the potential to make things quite interesting in the medium-long-term.More below the fold. 

Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)

Singapore and emerging market real estate

Royston Foo

Thematic (Sector/Industry)

Singapore real estate investment trusts (“S-REITs”) have been one of the best performing sectors on the Singapore stock market in 2018. In view of the surge in selling activities by institutional investors this year, the resilience of the S-REIT sector came as a pleasant surprise to investors. Fundamentals of the S-REIT sector remain strong. The bigger S-REITs continue to perform well, trading close to their book values and at low yields. The small-cap S-REITs (market capitalization below S$1 bil) tends to be worst performers. Whilst valuation may seem attractive, the low valuations are usually attributable to the additional risk premiums that investors require to compensate for the lack of scale, diversification and growth opportunities as well as the poor track record of some of these S-REITs.In the coming year 2019, there are 4 investment themes for the S-REIT sector and below are ideas for investors to position their S-REITs portfolio for these themes:Theme 1: “Safe-haven” asset class for investorsTheme 2: Merger and AcquisitionTheme 3: Growing Overseas Asset ExposureTheme 4: The Rise of Alternative Property Asset Classes

Singapore real estate investment trusts (“S-REITs”) have been one of the best performing sectors on the Singapore stock market in 2018. In view of the surge in selling activities by institutional investors this year, the resilience of the S-REIT sector came as a pleasant surprise to investors. Fundamentals of the S-REIT sector remain strong. The bigger S-REITs continue to perform well, trading close to their book values and at low yields. The small-cap S-REITs (market capitalization below S$1 bil) tends to be worst performers. Whilst valuation may seem attractive, the low valuations are usually attributable to the additional risk premiums that investors require to compensate for the lack of scale, diversification and growth opportunities as well as the poor track record of some of these S-REITs.In the coming year 2019, there are 4 investment themes for the S-REIT sector and below are ideas for investors to position their S-REITs portfolio for these themes:Theme 1: “Safe-haven” asset class for investorsTheme 2: Merger and AcquisitionTheme 3: Growing Overseas Asset ExposureTheme 4: The Rise of Alternative Property Asset Classes

Singapore REIT – 4 Investment Themes for the S-REIT Sector in 2019

Singapore

MindChamps PreSchool Limited operates as a franchiser of preschool centers. The Company offers infant care and bilingual academic programs, nursery, and kindergarten services. MindChamps PreSchool serves students in Singapore.

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Mindchamps Preschool (MCHAMPS SP)

Singapore Press Own Time Own Target Restructuring Lor... (Come I Clap For You)

SPH has announced a business restructuring to divest itself of its loss-making Media Holdings, paying to make it go away. This changes structure -...

Travis Lundy

Singapore REIT – 4 Investment Themes for the S-REIT Sector in 2019

Singapore real estate investment trusts (“S-REITs”) have been one of the best performing sectors on the Singapore stock market in 2018. In view of...

Royston Foo

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