Singapore Press Holdings (SPH)

[CY09]

For the last 2 post, I am unable to make much sense on how relevant it is to SPH and its business....

To me, I will like to ask: Given SPH''s declining core business, increasing leverage at SPH REIT level & declining profitability of M1, how sustainable is SPH's cashflow over the next few years?

[karlmarx]

1) ST is unlikely to become a regional, or even global, news agency like NYT. This has to do with the nation-building purpose of the newspaper, which results in an editorial board that is mainly government-groomed and therefore mostly uncritical. Such a stance conflicts with the editorial freedom/independence which is the core of international news agencies. When was the last time you read an ST news which excited you? Even TNP with its salacious cover stories has not been enough. Meanwhile, the biggest local news of 2017 -- the Lee Family spat -- was reported and followed on Facebook. Ad revenues must be high those months. So do not expect ST to be able to grow its subscriber base. People get tired of reading the same kind of stories.

2) If the media business continues to suffer, it is likely to be bought out by the government. SPH shareholders will be paid a huge dividend from the sale, and the company name will be changed accordingly. The properties and other business will remain listed. The reason is to ensure that SPH is able to continue carrying out its nation-building purpose, without public criticisms of the lack of profits. Just my thoughtless speculation.

[yourusualkid]

moat? online business

and, please,
do your homework and don't asked me to elaborate.

Ops... forget what I say. you can always try.

not sure why you found the need to be sarky. My point was on the assumption of an online business moat on the basis of its geography (Singapore) and its readers (Singaporeans). 

That's using an old model of print to judge an online media business; where newspapers have the stranglehold on classifieds. 

Any company that wants to advertise online have the options from social media (Facebook, Instagram predominantly) and Google Ads. Local companies with a fixed marketing budget can choose between paying an 'influencer', hiring a content team to do content and getting traction on their own social media platforms, or others. SPH competitors for advertising dollars can be Facebook, Instagram and a whole lot more. They can reach the local readers through the platforms as well. Those alternative new sites like Temasek Review and The Alternative Singaporean or whatever were based overseas and reached audiences in Singapore. 

It's the same with papers in the US. A Floridan business can advertise on NYT instead of Tampa Bay Times; which is why local papers are struggling there.

[yourusualkid]

1) ST is unlikely to become a regional, or even global, news agency like NYT. This has to do with the nation-building purpose of the newspaper, which results in an editorial board that is mainly government-groomed and therefore mostly uncritical. Such a stance conflicts with the editorial freedom/independence which is the core of international news agencies. When was the last time you read an ST news which excited you? Even TNP with its salacious cover stories has not been enough. Meanwhile, the biggest local news of 2017 -- the Lee Family spat -- was reported and followed on Facebook. Ad revenues must be high those months. So do not expect ST to be able to grow its subscriber base. People get tired of reading the same kind of stories.

2) If the media business continues to suffer, it is likely to be bought out by the government. SPH shareholders will be paid a huge dividend from the sale, and the company name will be changed accordingly. The properties and other business will remain listed. The reason is to ensure that SPH is able to continue carrying out its nation-building purpose, without public criticisms of the lack of profits. Just my thoughtless speculation.

For 2) look to the Newspapers and Printing Presses Act. I think as long as the Act remains, the likelihood is that SPH will follow the path of SMRT.

[chialc88]

my perception of SPH moat is in it's online business

Good morning, valuebuddies.
Apologies that my post is perceived as shaky.

Not my intentions.

I'm still learning so I'm not able to share too much.

I just wanted to let potential SPH buyer (or seller) to take a closer look on it's online business.


In the other thread, one of our valuebuddies highlighted that
given same info, same numbers, everyone of us will interpret it differently.

So, my perception in SPH moat will definitely different from yours.

[yourusualkid]

my perception of SPH moat is in it's online business

Good morning, valuebuddies.
Apologies that my post is perceived as shaky.

Not my intentions.

I'm still learning so I'm not able to share too much.

I just wanted to let potential SPH buyer (or seller) to take a closer look on it's online business.


In the other thread, one of our valuebuddies highlighted that
given same info, same numbers, everyone of us will interpret it differently.

So, my perception in SPH moat will definitely different from yours.

no worries

[Dividend Warrior]

The current dividend payout is not even close to being sustainable. Be warned.

[CY09]

The current cash flow at SPH group level of 15 cents is sustainable as SPH has also been able to sell off some assets

The question boils down to the sustainability at the REIT level. In the current FY, the value of SPH properties increased due to the lower capitalization rates accorded by its valuers. This is despite a gloom property outlook for retail and rising interest rates. It has enabled SPH REIT to take on more borrowings and yet report a lower gearing level.

As long as a certain national bank (a key lender to SPH reit & SPH) and the valuer (who has a conflict of interest) continue to keep up the charades, SPH at a group level can continue to dish out dividends beyond its recurring payout ratio.

[chialc88]

mmm... 
   the pre-condition is a huge assumption.

need  be very patient.
either pick up some first (collect dividend) and wait to pick up more later when it drops further,
or
  wait for the stock to turn around (meanwhile vested in other more promising stocks)

[Behappyalways]

I was wondering if retrenchment was the best way to go....

SPH's bread and butter biz (Media) is being hit with more advertisers and readers using the internet to read and sell their products instead of the traditional newspapers. For one, I also do not subscribe to the Straits Times. A friend passes me his internet login account to read the news online.

We can see that SPH is trying to seek other sources of income especially from property. I was wondering why SPH needs to retrench people from the sales department for example. If they are going to seek more income from property, they could have transfer these people to the property division. Although selling advertising slots and property might differ but then you can retrain the people. Are you not heeding the GOVT's call to retrain....