SingTel

(18-11-2012, 08:17 AM)freedom Wrote:

(18-11-2012, 01:19 AM)camelking Wrote: Great! Congrat to you.
By the way, did u miss an "IF" in my original statement?

I have nothing to be congratulated. thanks anyway. I did not miss your IF. Just the IF does not make much sense.

Because if there is not enough retained earnings to cover writing off of goodwill, creditors would already stop the company from paying dividends.

Also even that happens just because company keeps losing money. The company could choose to writes off its accumulated loss against its share capital. Therefore, when the company starts to earn money, it can pay dividends.

Quote:In a word, so long as the company can continue to earn a decent profit, there is nothing stopping it from paying dividends.

for business trusts, the problem is that most trust if not all do not earn enough to cover its dividends.

---

(18-11-2012, 04:03 AM)Drizzt Wrote: i agree somewhat what Temperament said that they did put in 10 bil as cash upfront looking for a payback. you can't really discount that as accounting.

if it is the case, singtel can now go buy AIS at an overvalued price (laden with goodwill) and that would be "right"

if Thailand starts to nationalize ais for a cheap price , then how?

No one wants to pay a higher price, but if you want to buy, you gotta pay.

How many stocks are you buying at price higher than book value or tangible book value? Essentially, you are paying goodwill to own shares of company.

Quote:In a word, so long as the company can continue to earn a decent profit, there is nothing stopping it from paying dividends.

A profitable company may not be viable to continue if it runs out of cash reserves & current assets to carry on business as usual and especially the banks also think so. So as usual we cannot take net profit alone to say there is nothing stopping it from paying dividends. i suppose you already know this. This knowledge is really for newbies.

And it's true that anyone buying a stock higher than it's book value is already paying part of the buying price for "goodwill"(intangible asset if there is any) of the company.

But i am not comfortable about your idea of bookkeeping.
It gives me an image exactly what a "crooked management" in a company can do. Everything can be "balanced" and written off from the book. And voila! the company is profitable again. This where retail investors have a very hard time trying not be caught by such companies.
No offence intended just sharing of thoughts & experience.

i think the rule of thumb still matters. if you buy it at too high a value, you get screwed.

(18-11-2012, 12:30 PM)Drizzt Wrote: i think the rule of thumb still matters. if you buy it at too high a value, you get screwed.

Ha! Ha!
Everyone knows the saying, "Buy Low Sell High".
But what is low and what is high?
Low may be lower and lower till river of no return.
High may be higher and higher till peak of Mount Everest.
You can do all the homework you want.
But i still believe we all need Lady's Luck or God Blessings depending what you believe.
And if you only believe in yourself so be it.

(18-11-2012, 12:30 PM)Drizzt Wrote: i think the rule of thumb still matters. if you buy it at too high a value, you get screwed.

I don't know whether you have any starhub shares. If you have, I am sure the goodwill will be huge as the tangible book value of starhub is very low. I am sure if you already own starhub shares, you probably would buy it at 2 dollar. Even at 2 dollar, you are paying a great deal of goodwill. I believe that you aren't thinking that you are paying a great price for goodwill, otherwise, you probably would never buy any starhub share.

I am not defending singtel's decision to acquire Optus 10 year ago. But the price has been paid long ago. Otherwise, singtel would not be trading at current level. It could be worth $5.

(18-11-2012, 08:17 AM)freedom Wrote:

(18-11-2012, 01:19 AM)camelking Wrote: Great! Congrat to you.
By the way, did u miss an "IF" in my original statement?

I have nothing to be congratulated. thanks anyway. I did not miss your IF. Just the IF does not make much sense.

Because if there is not enough retained earnings to cover writing off of goodwill, creditors would already stop the company from paying dividends.

Also even that happens just because company keeps losing money. The company could choose to writes off its accumulated loss against its share capital. Therefore, when the company starts to earn money, it can pay dividends.

In a word, so long as the company can continue to earn a decent profit, there is nothing stopping it from paying dividends.


for business trusts, the problem is that most trust if not all do not earn enough to cover its dividends.

---

(18-11-2012, 04:03 AM)Drizzt Wrote: i agree somewhat what Temperament said that they did put in 10 bil as cash upfront looking for a payback. you can't really discount that as accounting.

if it is the case, singtel can now go buy AIS at an overvalued price (laden with goodwill) and that would be "right"

if Thailand starts to nationalize ais for a cheap price , then how?

No one wants to pay a higher price, but if you want to buy, you gotta pay.

How many stocks are you buying at price higher than book value or tangible book value? Essentially, you are paying goodwill to own shares of company.

Of course, it doesn't make any sense to you.

(18-11-2012, 12:53 PM)Temperament Wrote:

(18-11-2012, 12:30 PM)Drizzt Wrote: i think the rule of thumb still matters. if you buy it at too high a value, you get screwed.

Ha! Ha!
Everyone knows the saying, "Buy Low Sell High".
But what is low and what is high?
Low may be lower and lower till river of no return.
High may be higher and higher till peak of Mount Everest.
You can do all the homework you want.
But i still believe we all need Lady's Luck or God Blessings depending what you believe.
And if you only believe in yourself so be it.

oops. i think i meant too high a price.

---

(18-11-2012, 12:56 PM)freedom Wrote:

(18-11-2012, 12:30 PM)Drizzt Wrote: i think the rule of thumb still matters. if you buy it at too high a value, you get screwed.

I don't know whether you have any starhub shares. If you have, I am sure the goodwill will be huge as the tangible book value of starhub is very low. I am sure if you already own starhub shares, you probably would buy it at 2 dollar. Even at 2 dollar, you are paying a great deal of goodwill. I believe that you aren't thinking that you are paying a great price for goodwill, otherwise, you probably would never buy any starhub share.

I am not defending singtel's decision to acquire Optus 10 year ago. But the price has been paid long ago. Otherwise, singtel would not be trading at current level. It could be worth $5.

yeah i do own starhub. i tend to take good will as intangibles into consideration. that is the price the management buys it at. you want to see if they are buying some good cash flow versus the alternatives u consider that. and last i checked their return on assets look much better than optus deals.

AIS yields 20% if i remember, telkomsel 13% but Optus looks closer to 5%.

yes its over and done with, but i hope the culture is not as such that they will always overpay things.

(18-11-2012, 01:24 PM)Drizzt Wrote: yeah i do own starhub. i tend to take good will as intangibles into consideration. that is the price the management buys it at. you want to see if they are buying some good cash flow versus the alternatives u consider that. and last i checked their return on assets look much better than optus deals.

AIS yields 20% if i remember, telkomsel 13% but Optus looks closer to 5%.

yes its over and done with, but i hope the culture is not as such that they will always overpay things.

For ais, I would say singtel got a great deal last time.

For Optus, singtel was not lucky, probably paid a fair value or above value.

It is not fair to calculate roa simply like that. Look at this way, according to accounting standards, you can't increase your asset valuation because you are earning more. For legacy asset on both singtel and starhub, they have paid little for the mobile operating license, but they are earning big on those cheap license and they are not allowed to revalue those licenses. Such that their roa could be unbelievably high. Can I buy starhub based on its historical license valuation? Unlikely. The same can be said for Optus, when singtel acquired Optus, just like I am buying starhub, I can never get starhub's roa any more. I only get a reasonable roa, which is significantly lower than starhub. whether Optus offers a reasonable roa, I don't know. But I believe the market would correct its valuation anyway.

NetLink Trust is a business trust established as part of IDA’s effective open access requirements under Singapore’s Next Generation Nationwide Broadband Network (NGNBN or Fibre network)

The NetLink Trust is currently 100% owned by SingTel, but lump into other associates together with OpenNet and others

I have closely followed the divestment of the assets by SingTel. The current status is NetLink Trust paid SingTel with S$567 million worth of units and S$1.325 billion loan for the asset.

SingTel is paying fees for the asset since 2011, and in return for interest income from the loan and NetLink Trust's profit.

Singtel $3.24/5, +8ct @ $3.25 last done.... Why? Why? Why?

(28-11-2012, 12:39 PM)KopiKat Wrote: Singtel $3.24/5, +8ct @ $3.25 last done.... Why? Why? Why?

playing catch up nia, agree?