SPH shares claw back losses after Coupang disclosure

Media and property group Singapore Press Holdings (SPH) disclosed its shareholding in Korean e-commerce company Coupang, which is hoping to go public in the US.

  • Singapore Press Holdings (SGX: T39) share price recovers to S$1.34 per share, up 4.7%
  • The media group disclosed that it has a 0.1% indirect stake in Coupang
  • SPH also revealed it is not involved in Coupang's IPO and management
  • Analysts' price targets on SPH averaged S$1.26
  • Trade SPH shares, long or short, with an IG account

SPH share price ticks up

Singapore Press Holdings’ (SPH) shares rallied last week, jumping to a nine-month high of S$1.40 on Friday (26 February), with investor sentiment boosted by a report in The Business Times.

SoftBank-backed e-commerce and logistics leader Coupang, in which SPH invested back in 2014, is planning an initial public offering (IPO) on the New York Stock Exchange with a S$50 billion valuation.

Last Thursday (25 February), The Business Times reported that SPH could see ‘strong returns’ on its investment if the listing is successful.

Given that the South Korean firm was valued at US$5 billion in June 2015, the potential IPO valuation implies an over 10-fold increase in SPH’s investment, CIMB analysts wrote.

But SPH made a disclosure about Coupang over the weekend, prompting the former’s shares to shed most of their gains this Monday and Tuesday.

They began to rebound on Wednesday and Thursday. The stock was trading at S$1.34 by 11:28 SGT this Thursday (04 March), up 4.7% day-on-day.

SPH says it is not involved in listing

On Saturday (27 February), SPH revealed that its indirect stake in the Korean company was estimated at just 0.1%. SPH in 2014 invested US$3.9 million via a special purpose vehicle.

SPH added that it is not involved in the management of Coupang nor in the IPO process, and the potential public debut is not expected to affect SPH’s recurring financial performance.

The media and property play said it ‘continually explores and evaluates all opportunities across its portfolio to enhance shareholder value and strengthen its financial performance’. The announcement weighed on SPH shares early this week.

Analyst Douglas Kim wrote on SmartKarma that given the ‘intensely bullish environment’ for high-quality global tech stocks, Coupang might post a first-day pop, which could lead to its market cap reaching as high as US$81 billion.

No ‘buy’ calls from analysts

CIMB last Friday said it would have raised its target price for SPH shares to S$1.60, from S$1.31, if the listing goes ahead with a US$50 billion valuation and assuming SPH owned 1% of Coupang - 10 times the actual size of the stake disclosed the next day.

In any case, SPH has invested in over 40 early-growth technology companies via its subsidiary, and these could potentially raise its value in time, CIMB added, maintaining its ‘hold’ rating.

Bloomberg data showed no analysts issuing a ‘buy’ recommendation on SPH; three had ‘hold’ calls while two said to ‘sell’. Their average 12-month target price was S$1.26.

How to trade SPH stocks with IG

Are you feeling bullish or bearish on SPH’s stocks?

Either way you can buy (long) or sell (short) the asset using IG's industry-leading trading platform, or by investing in the share directly, in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Singapore Press Holdings> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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