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Singapore Press Holdings (SPH)
05-06-2020, 05:58 PM.
Post: #1041
RE: Singapore Press Holdings (SPH)
(05-06-2020, 05:35 PM)Shiyi Wrote:
(05-06-2020, 03:38 PM)weijian Wrote:
(05-06-2020, 09:24 AM)money Wrote:
(15-06-2019, 03:13 PM)money Wrote:
(14-08-2017, 12:29 PM)money Wrote: well, the market is taking SPH's declining profits in its media business more seriously now

Almost 2 years later, back to review SPH, trading at 2.38 recently, i still thinking it is trading at a unjustified premium. Annual profit is still dropping, leverage has gone up, dividend per share is showing signs of a gradual decrease, and imo, it is trying very hard to grow profits through the aged care and student accomodation, not sure if this is its area of expertise, and it also appears to be capital intensive. If it is to be valued as a property development/investment business, it is trading above its NAV, but most property development companies or reits in singapore are trading below their NAV. I would still give it a pass at today's price

For years, i have been suggesting that SPH is not worth its premium. And i am so critical of it because it is part of the index, a supposed blue chip. Many uncles aunties will just buy it blindly. Now that it is going to be out of the index, i wont bother to track it anymore. 

Today it is trading at around $1.35. About 3/4 years ago, it was trading for more than $3. Serious value destruction to many innocents who bought it in the first place because it is called a blue chip. i always hold the view that blue chips have to live up to their 'reputation'

Thanks money, for tracking back your thoughts stretching back the last 3.5years.

To enter the STI index, the criteria is it must be one of the highest market cap company on SGX mainboard listing, followed by sufficient trading liquidity and free float. There isn't any "quality" perspective over here. As a reference, the S&P 500 and DJIA inclusion criteria is also quite similar, with size as the main criteria. Although the S&P 500 has a profitability criteria but if we were to superimpose SPH's scenario, it doesn't help because SPH has been profitable (abeit, getting less and less profitable).

When you are in some index, it doesn't mean you are a "quality" company. It only means you are a large company. So all in all, i think the word "blue chip" is really a heuristic that one has to avoid or suffer at their own cost - whether uncles aunties or anyone.

We shouldn't even have a "blue chip" description per say in the first place. Just focusing on the STI index for the last few years, we can see ex-index constituents like Noble and Hutchinson Port Trust....I am quite sure that they haven't lived up to reputation. I think it is better for us not to assume any company has to "live up to their reputation". "Reputation" is a meaningless framework that we create ourselves and is not meaningful at all but it serves as another heuristic.

Hi Weijia
Being included in an index has some "reputational value" as index funds and institutional funds will buy in.
On the contrary, the stock that is removed from the index is usually underperformed and  come under further selling pressure.

Stocks that are removed from an index are often a red flag. Noble is a good example.  In the long term, stock index is usually on an upward trend as it keeps "rebalancing" every quarter or every two quarters. There is a kind of selection process, weeding out the weaker ones and coopting the strong ones. That probably explains why index stocks are regarded as blue chips. For the same reason,  WF is asking people to buy S&P ETF.

I wouldn't call it reputational value. As Wei has pointed out, index constituents are simply the larger companies. A company will enter the index when the market cap gets big enough - i.e. more likely than not, the share price had a good run, whether justified or not. Case in point, look up China Ding Yi Feng, any sensible investor can tell that the company is dodgy if you go through the financials. However, the share price kept going up, and ended up being included in the index, which then led to more capital inflows, propping price up. When the bubble burst, it was a swift decline. Bottom line is, index inclusion doesn't necessarily mean quality.

I would instead call it a benchmark premium, because certain funds (both index funds and mutual funds) are compelled to only invest in index constituents. So there's going to be higher institutional demand, leading to a premium in valuation.

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21-06-2020, 09:49 AM.
Post: #1042
RE: Singapore Press Holdings (SPH)
19 June 2020 Update on Streetsine Judicial Management SPH

As stated in the JM Announcement, SSTG and SSPL are not significant subsidiaries of SPH, and the above-stated court applications do not have a material impact on the Company’s operations for the current financial year ending 31 August 2020.
The hearing for the IJM Applications (as defined in the JM Announcement) has been fixed
for 22 June 2020. The Company will keep the shareholders informed of the progress of the matter and will make further announcements, when appropriate.

I felt rather sad as given a chance, Streetsine could provide a strong digital platform for SPH.
Sad, very sad that it's developing into such a sad situation.
FYI on the initiate purchase:

Stay home and stay safe, valuebuddies.

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01-07-2020, 08:41 AM.
Post: #1043
Rainbow  82 Genting Lane: Singapore Press Holdings (SPH)
29 June 2020 82 Genting Lane - new Data Centre

Keppel 60% + SPH 40%

Wear mask and keep your distance, everyone.

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