Citigroup is maintaining its “buy” call on Singapore Press Holdings (SPRM.SI) with a target price of $4.20 with signs of economic recovery, attractive valuations and a likely surge in ad revenues.

“We reiterate our Buy rating on SPH. The investment thesis we put forth in our July 22 report remains largely intact, and we think SPH remains a good proxy to Singapore’s V-shaped economic recovery. SPH’s core media price-to-earnings ratio tends to trade at a premium to the STI, but our S$4.20 TP is based on a conservative 18.4x FY10E core media P/E (or 0.5 s.d. below mean) and a ~15% discount to the latest external valuation for Paragon, implying upside risk to our target prize. SPH is a Singapore top pick,” says Citi in a research report dated Sept 21.