Singapore Post

[ishak]

Yes sir.
The title is on top of the thread though.

[blid2def]

I mean when you look at the front (index) page, it shows the latest post in a sub-forum. So when the subject becomes "Profit up 100%" then that's what the reader sees. When they drill deeper, or they use view new posts/active topics, then it becomes clear where that post belongs to.

It's not a big problem lah, just suggesting to keep the original header, and add to it instead of just wiping it. You don't do it I won't die also.

[ishak]

I see, hee.

Seldom go to index page as i always click on the "View active topics" or the "View new posts". Will do as you suggest.

[Rontan]

I just wonder if anyone has done a comparison between Sing Post and SPH? If you have $4K, will you buy 1 lot of SPH or 4 lots of Sing Post?

Now, without going into the detail numbers, let’s just consider the following:

Similarity:
1. Both are monopoly in their industries. The mail & post market has been liberalized, but I doubt a competent competitor will emerge in a small market which is dominated by an efficient and cost efficient player.

2. Both give decent yield. For Sing Post, they are paying 6.25c which works out to slightly more than 6% p.a. using today’s price. SPH pays 0.26c for FY07 which is equivalent to 6.5% based on today’s price. Due to the defensive nature of both companies, dividends payout will remain fairly stable in the future.

3. Both have a gem in their balance sheet, which is their property. Sing Post’s HQ in Paya Lebar is said to worth $850M and SPH’s Paragon is estimated to worth $2B. Should they decide to sell off these property, shareholders can expect a special dividends payout. However, even no sales were to materialize, both companies still enjoy decent returns from renting their property, and also possible further capital gain if property price were to escalate further.

4. Both are managed under a group of capable and smart folks, even though I think (think only la) SPH has a slight edge over Sing Post.

5. Both faces intense competition from the Internet. More people are going on line for news instead of hard copies of newspapers. Also, more people transact business using B2B, which may means lower mail traffic. Still, the numbers that are coming out from both companies are still encouraging. Mail revenue is increasing y-o-y, although very small. For SPH, they are able to sustain the overall circulation level, though there is a drop in Straits Times but were offset but an increase in Business Times.

6. Both companies try to diversify into other businesses. SPH is penetrating into property, retail, online media, online shopping, MICE etc. Sing Post is into logistic, financial services and retail.

7. Last but not least, both companies has name that start with S..hehe. (Okay, try to pull a fast one)

So, which company would you prefer if you were to choose one? Of course, we still need to look at the numbers and valuation etc etc… yes, yes I know that. But, assuming all else being equal (economist favorite term), which company is better? Which company is likely to perform better in the long term, say 10 years from now?

Appreciate views from other on this.

Currently vested in Sing Post only.

Have a good day!

[helios]

why not, SingPost, SPH and SingTel?

3 parties.

[iam802]

4k limit

[ishak]

:arrow: why not, SingPost, SPH and SingTel?

3 parties.

arrow: Starhub, SBS, SMRT, SingPost, SPH and SingTel?

I am more confident that 5 years from now, SBS, SMRT and Singtel will still be around.

[kennynah]

sph, singpost ..... also both derive her revenues from singapore alone... but not singtel....singtel smarter....

will you buy 1 lot of SPH or 4 lots of Sing Post?

me ? none

[helios]

sph, singpost ..... also both derive her revenues from singapore alone... but not singtel....singtel smarter....

do watch for SingTel sponsorship for F1 Formular Night Race in Singapore ...

international media coverage 'live'.

[ishak]

Singapore Post – Q1FY09 Results (Gregory YAP 64321450)
Previous day closing price: $1.01
Recommendation: Buy (upgraded from Hold)
Target price: $1.20 (maintained)

Above expectations due to lower traffic costs
Underlying net profit rose 12% YoY to $38.9m, above our expectation. Reported net income of $39.5m reached 26% of original full-year forecast. Margins rebounded during the quarter on higher rental income, as well as costs which fell on volume-related factors. While risks still lie ahead (i.e. greater competition), the tempting yield of 6.7% and the recent decline of the share price prompt an upgrade to BUY.

Margins boosted by lower expenses, higher rental
Operating margin was boosted to over 40% (from below 30% in Q4FY08 and 37% in FY08) by lower traffic and selling expenses as well as sharply higher rental income. Traffic expenses, the second largest cost item after labour costs, fell back to 2007 levels (around 25% of revenue) on various effective cost-saving measures such as route optimisation.

Encouraging growth in non-mail businesses
Mail revenue (+2%) stayed weak sequentially but topline (+5% to $121m) was driven by encouraging growth in Retail (+18%) and Logistics (+12%). Logistics continued to grow consistently while Retail growth accelerated to 33% YoY following a 29% jump in Q4FY08 as SingPost continued to repurpose its post office properties and focused on higher-value products.

Competition still ahead but market liberalised since Apr 07
Greater competition with the liberalisation of Basic Mail is still ahead. The Reference Access Offer document is now being commented upon and IDA should finalise the competition code in 2H 2008. SingPost appears to be well-prepared as the market has actually been liberalised since Apr 2007. Meanwhile, the sale of SingPost Centre is still in the early stages, and could be an upside catalyst.

Dividend check should be in the mail
Furthermore, strong cashflow (cash and cash equivalents up strongly to $150m as at Jun 2008) suggests that SingPost can continue to pay out 80-90% of its profits as dividends. At the minimum, it is committed to paying an annual dividend of 5 cents a share. Our 6.7 cents DPS estimate is based on an 85% payout. At the current share price, that translates into an attractive yield of 6.7%.