Ng Yat Chung

press, news and industry

SPH to restructure media business into not-for-profit entity (Money FM)

May 6, 2021

Money FM’s JP Ong asked for my thoughts on the restructuring of its parent.
It is a step in the right direction for SPH. Morale has been sinking the past few years following rounds of cost-cutting and retrenchments. With the restructuring, pressure to maximise shareholder value is off. The same is true of SMRT after it was privatised by Temasek in 2016. I am for this move.
As for the share price, I think it has pretty much factored in the news, surging 80% from its lows last October. There is typically a ‘conglomerate discount’ ascribed to the share prices of stocks with disparate businesses. That discount ranges from 20-50%. Based on post-restructuring NAV of $2.08, SPH is trading at less than 15% discount.
It may be a classic case of buy the rumour, sell the news.