Singapore Press Holdings (SPH)

[Ben]

When SPH bid for the land to build Clementi mall, and pay a hefty price which is much higher than the next bid, everone says they have overpaid. The truth is, it is indeed overpaying BUT it is also giving a fair returns now. Without this investment, they wont be any talks about listing a reits, and we wont see its price shot up last few weeks. Personally i think this time round they are also overpaying, but to have a prize catch like sgcm, we cannot be too quick in our conclusion. Aferall, it is better to pay a fair price for a good business than to pay a good price for a fair business, a quote from WB. To invest in SPH, one really need to look loooong term.

[greengiraffe]

when in doubt, stay clear. however, sph is spilling too much cash and hence can afford silly mistakes.

[Musicwhiz]

When SPH bid for the land to build Clementi mall, and pay a hefty price which is much higher than the next bid, everone says they have overpaid. The truth is, it is indeed overpaying BUT it is also giving a fair returns now. Without this investment, they wont be any talks about listing a reits, and we wont see its price shot up last few weeks. Personally i think this time round they are also overpaying, but to have a prize catch like sgcm, we cannot be too quick in our conclusion. Aferall, it is better to pay a fair price for a good business than to pay a good price for a fair business, a quote from WB. To invest in SPH, one really need to look loooong term.

I guess in order to determine if an investment generates good returns, one should compute the ROI for the investment over a period of 3-5 years and see if the price paid was, indeed, too much. Of course, this can usually be done only on hindsight.

But track record of Management does give some indication of whether they are properly deploying capital, or not!

[LionFlyer]

IMO, the key point is not wrong call on STcar, then bought SGCM. Trial and error is part and parcel of management.

IMO, the key point is over-paying the acquisition.

I don't think anyone is in the business of spending money to make a mistake and spending more money to cover it up. I am not saying that poor business decision never happens but a wrong call is a wrong call. I want to qualify its my opinion; I once applied to join ST's Rednano and after talking to the interviewer, I told them frankly I didn't think their strategy would work (and I didn't get the job!).

As for overpaying or not, without looking at the deal structure, I think we have to reserve judgement. But's it a lot of money (in SG terms) for a website.

[smallcaps]

Could imagine how much they yearn for propertyguru... so much that they created a 'competitor' website...

[Musicwhiz]

This shows you how entrepreneurship can make you a very rich person - the founders set up SGCarMart in 2004 when they were just 23 years old, and now each of them is about $20 million richer. Thumbs up!

The Straits Times
www.straitstimes.com
Published on Apr 02, 2013
SPH to buy motoring portal

By Christopher Tan Senior Transport Correspondent

LISTED media group Singapore Press Holdings (SPH) has agreed to buy online motoring portal sgCarMart for up to $60 million.

SPH said it will buy all of sgCarMart's issued shares as well as its subsidiary Quotz, an online auction platform. The final price is dependent on performance targets and will be paid in cash.

With the acquisition, SPH will also own 45 per cent of online marketing portal Conversion Hub Marketing and 30 per cent of SCMC, a service provider for car loan, insurance and settlement services.

Both are associate companies of sgCarMart.

sgCarMart was founded by friends Vincent Tan, Tan Jinglun and Seah Hon Hui, all 32, in 2004 when they were engineering students at the National University of Singapore.

It started as an online classifieds site that nibbled on the heels of more established classifieds platforms and eventually became a one-stop site for car loans, valuation and insurance. It also has a motor workshop directory, editorial content and a car forum.

Today, it has about 10,000 listings, and draws more than 2.5 million visitors who make about 30 million page views each month.

For its 2011 financial year, sgCarMart posted a net profit of $2.3 million on a revenue of $5.5 million.

Mr Vincent Tan said: "We are happy. It's a good marriage.

"We have taken the company so far, and there can only be so much resources we have on hand. SPH can help us grow in breadth and in depth."

Mr Tan and the other two founders will continue to be employed by sgCarMart after the acquisition.

SPH chief executive Alan Chan said there will be synergies between sgCarMart and SPH's own ST701 online classifieds verticals.

"The acquisition will add to the breadth of SPH's online classifieds portfolio.

"With this acquisition, SPH will have new income streams," he said.

Besides the three founders, sgCarMart's shareholders include JDB Investment.

SPH has been on an acquisition trail in the past decade. Businesses it bought include Australia's ACP Magazines for $58 million in 2011; Eastern Holdings' exhibition business for $43.5 million in 2010; financial portal ShareInvestor for $12 million in 2008; IT portal HardwareZone for $7.1 million in 2006; and publishing group Blu Inc for $33 million in 2004.

The acquisition of sgCarMart did not take market watchers much by surprise.

Nomura's head of equity research for South-east Asia Lim Jit Soon said: "It's only a matter of time. It's a diversification away from print to capture a new trend online."

christan@sph.com.sg

[corporatefatcat]

You can't tell if it is overpaying without looking at the earnings power of the company.
Carsales.com in Australia is doing well and comes with a pretty hefty price tag at 28.9x earnings, 17.1x Book and a 2.2 Billion market cap.
http://investing.businessweek.com/resear...ker=CRZ:AU

[Drizzt]

my question is how will the scope of this, stomp, shareinvestor, hardwarezone expand their advertising model?

does that mean they are the biggest one stop advertising shop right now?

what other media have they not manage to conquer?

[CityFarmer]

You can't tell if it is overpaying without looking at the earnings power of the company.
Carsales.com in Australia is doing well and comes with a pretty hefty price tag at 28.9x earnings, 17.1x Book and a 2.2 Billion market cap.
http://investing.businessweek.com/resear...ker=CRZ:AU

It is true that without looking into numbers, all conclusions are speculation.

Base on the ST article, "For its 2011 financial year, sgCarMart posted a net profit of $2.3 million on a revenue of $5.5 million"

S$60 million means valuation tag at 26x earning, not too far from carsales.com in Australia. But...

- carsales.com revenue is more than A$150 million, while SGCarMart is S$5.5 million.
- carsales.com covers Australia with car population of more than 16 million (in 2011), while SGCarMart covers Singapore with car population of less than 1 million (in 2011)

[CityFarmer]

One more article on SPH's REIT

SPH in possible ‘S$1b REIT IPO’

SINGAPORE — Singapore Press Holdings (SPH), the newspaper publisher that owns Paragon shopping mall on Orchard Road, has tapped Credit Suisse and DBS Group to manage a listing of its property assets in an initial public offering (IPO) of as much as S$1 billion, according to people with knowledge of the matter.

The IPO could take place as soon as the third quarter of this year, said two sources, who asked not to be identified as the information was private.

http://www.todayonline.com/business/sph-...b-reit-ipo