Singapore Post

[iam802]

Here's something to think of with regards to SingPost.

Back in 2002 (?), they enter a JV with some other postal services to form SPRING. This is done with the aim preparing themselves for the liberisation of the postal services in Singapore and other countries.

However, if I recall correctly, they have since sold off their shares in the JV last year. What happen? What is the impact?

While SingPost will continue to have dominant delivering stuffs locally in the short term, will their overseas bulk posts delivery suffer with the liberisation?

Think also of the recent Swedish and Danish Post merger. First in the world. A merger of postal services between 2 countries. Such mergers are never done without reasons and understanding to the underlying changes.

This landscape is changing rapidly. At this point in time, SingPost only attraction is the building property. A short term play at most. Beyond that, the management have to work harder to convince investor to part with their money.

[ishak]

SingPost warns of higher fees
BT, 06 Sep 2008

SINGAPORE Post has warned of a potential increase in its net terminal dues payments for international mailing. This comes after it was announced at the recent 24th Universal Postal Union (UPU) Congress in Geneva, Switzerland, that Singapore would be reclassified as a Target Country (previously known as 'Industrialised Country') from the current category of Net Contributor Country for the purpose of terminal dues settlement.

The change will take effect from Jan 1, 2010.

Terminal dues refer to settlements for the processing and delivery of international mail between countries. Singapore will have to apply the relevant terminal dues system from 2010 to 2013 and contribute to the UPU Quality of Service Fund. The group foresees an increase in its net terminal dues payments for international mailing as the dues payable by target countries are generally higher.

[la papillion]

I learnt of a possible competitor from reading ST forum section a few days (or weeks) ago. That firm is AJ courier. They are actually making a complain about the situation whereby their postman are not recognised by private estates security officers. They wanted to post something to a mail box located inside a private estate, but the guards stopped them. After speaking to their management, the management replied that if they wanted to post something, they should attach a stamp and send it to singpost! Apparently, the management did not realise that the postal system in singapore had been liberalised.

Besides this, the letter also mentioned about the HDB mail boxes being locked, with the key held by authorised singpost's postmen. As such, it becomes impossible for AJ courier's postman to do such posting, even though on paper, the postal system had been liberalised. I did not read the reply from any authorities following it (I must have missed it somehow)

For vested interest, I think it's a good sign that there are structural and mental monopoly existing for singpost. Having been serving as the 'national post company' in singapore since forever, it becomes the 'only' place if one wants to post something. I think singpost is the equivalent of posb in the mailing industry. This spells good news for singpost, I think.

---------------
AJ courier website can be found here: http://www.aj.com.sg/

Seriously, how to fight with singpost?

[millionairemind]

October 30, 2008, 5.58 pm (Singapore time)

SingPost Q2 profit down 5.6%
By WONG WEI KONG

SingPost Group on Thursday said net profit declined 5.6 per cent to $37.4 million in its second quarter ended September 2008. Excluding one-off items, underlying net profit was higher by 11.4 per cent at $38.7 million.

The group registered a 4.1 per cent growth in revenue to $120.7 million in the second quarter, with improved performances across all its three business segments.

Mail revenue grew 2.8 per cent to $91.7 million, from higher contributions from its business lines - domestic mail, international mail, hybrid mail and the philatelic business.

Logistics revenue was up 6.4 per cent to $18.8 million, on growth in its Speedpost and vPOST shipping transactions and warehousing, fulfilment and distribution. During the

Retail business posted an 8.6 per cent increase in revenue to S$16.6 million, driven mainly by continued growth in financial services, particularly remittances. The group's rental and property-related income for the second quarter increased by 39.3 per cent to $8.2 million, on the back of higher rental income from Singapore Post Centre.

[kennynah]

here's something to think about too...
singpost is a singapore postal services...

u really think they can make u a millionaire investing in it????

[millionairemind]

here's something to think about too...
singpost is a singapore postal services...

u really think they can make u a millionaire investing in it????

Sure K, if you are the CEO..

Ever noticed all the state owned companies with monopolies paid their CEOs high salaries?

[ucypmas]

Vested.

Yes this stock will not make you a millionaire. But...

I think SingPost have been relatively careful in terms of stewarding their cash flow. Their competitive advantage is almost unbreakable. The efforts to liberalise the market will come to nowhere (and in reality current efforts are policy-driven, not market-driven), as the Singapore local market is too small to be of interest to international giants. You will have a few gnats flying around trying to capture delivery volumes from businesses wanting to cut cost, but they are a long way from being a major threat to this company.

Current price yields about 8%. I see it as a useful stock for accounts like SRS, where the money is locked in for the long term and the focus is to put together a portfolio that can generate strong, sustainable cash flows and dividends for the long term. I'll be very happy if the price stays this way (or go lower) for years and years to come, allowing reinvestments at current return levels.

[mojo_]

..... the focus is to put together a portfolio that can generate strong, sustainable cash flows and dividends for the long term. I'll be very happy if the price stays this way (or go lower) for years and years to come, allowing reinvestments at current return levels.

Not vested but interesting remark and very appropriate... for investors whose objective is income vs growth and long term vs hours/days/weeks. I think some better quality reits can fall into this domain too (your question in the suntec thread). The current environment throws up interesting opportunities.

[la papillion]

In Singapore Business Review (a free magazine which I took from Spinelli's coffee chain), there is an article on Singpost in this month. It mentioned that even after the drafting of the Reference Access Offer (RAO) by Singpost, under the supervision of Infocomm Development Authority (IDA) to liberalise the postal network, Singpost is still effectively 'untouchable'.

The postal service operators (PSO) are saying that the RAO places the postal market under non-competitive conditions. Why? Mainly because of Singpost's pricing schedule. The RAO access rates are identical, if not similar to Singpost's pricing domestic bulk rates, which singpost can offer to customers directly. If under the RAO, PSOs are offering identical or similar rates as Singpost, why should customer use other companies when Singpost had proven track record?

IDA is also satisfied with the current situation. They mentioned that licensees can negotiate lower rates from Singpost by delivering their mails more efficiently. Or they can consolidate mail from multiple end users to benefit from lower access prices for higher volume postings which singpost has provided larger discounts.

From what I gather from the article, it seems like

1) singpost drafted the RAO to control the bulk rates, which happen to be similar to their existing rates

2) singpost can offer individual PSO what they call the Individualised Assessed Agreement (IAA), which simply means that the PSO have to negotiate with Singpost for the rates in which the PSO can charge. Singpost mentioned they might be signing up 3 out of 4 PSO soon. The customized rates can be lower than the RAO, so it's up to the PSO to negotiate with singpost.

It seems like singpost monopoly structure is not only intact, it is further entrenched by such agreements. The last line of the article is very revealing - it says that even IDA is stumped by Singpost's monopoly. "If Singpost says this what I can offer, what can anybody do?"

Vested.

[winston]

TOL:-

1) E-mails & E-cards have reduced a lot of traditional mails

2) Even some of my business statements are now being sent to me electronically

3) Courier & Registered Letters should still be an important revenue generator

4) Non-Traditional Postal Services have not really taken off eg. Insurance etc.