Singapore Press Holdings (SPH)

[KopiKat]

It is fair to expect losses in the short term, due to numbers of factors, but ultimately these businesses should be profitable, which is why they want to buy in the first place. Besides, these online businesses, if left on its own, are growing and profitable, so why should it not be the case when it is run by SPH?

I have pondered on this Q before and this is what someone told me and I think it does make sense...

Before the online biz was acquired by SPH, the owners will run it on a very tight budget. Many sacrifices are made eg. Lower salary, cheap office + basic furnishings, maybe even own NB PC, HP, Transport,... etc. plus they can be on call or working at 24/7 without any compensation.

Expenses goes up tremendously (not just one-time expenses but also recurring ones) when SPH takes over. To retain staff, salary has to be adjusted to market rates plus many other benefits which now has to be paid for. Infrastructure will likely be upgraded to SPH standards as I doubt anyone will now be motivated to work in a place that looks like a dump...

So, hard to stay profitable unless Revenue increases a lot more...

[CityFarmer]

SPH analyst report from OCBC Investment Research and OSK

OCBC IR: Rating BUY, with TP $4.94
OSK: Rating SELL, with TP $4.00

http://remisiers.org/cms_images/research...15-OIR.pdf
http://remisiers.org/cms_images/research...13_OSK.pdf

The share price adjusted down to $4.33 minute ago.

[KopiKat]

SPH analyst report from OCBC Investment Research and OSK

OCBC IR: Rating BUY, with TP $4.94
OSK: Rating SELL, with TP $4.00

http://remisiers.org/cms_images/research...15-OIR.pdf
http://remisiers.org/cms_images/research...13_OSK.pdf

The share price adjusted down to $4.33 minute ago.

On the same page, another by CIMB (hv to click to download separately),

CIMB : Underperform, with TP $4.32

http://www.remisiers.org/cms_images/rese...042013.pdf

[felixleong]

sometimes I really dunno why SPH and singtel keep overpaying for online business that are making losses or are not so profitable

example sph's purchase of sgcarmart for 60mil
singtel's purchase of hungrygowhere for 12mil

I think at the end of the year its the young entrepreneurs that sold out that's laughing their way to the bank ^^

[mobo]

sometimes I really dunno why SPH and singtel keep overpaying for online business that are making losses or are not so profitable

example sph's purchase of sgcarmart for 60mil
singtel's purchase of hungrygowhere for 12mil

I think at the end of the year its the young entrepreneurs that sold out that's laughing their way to the bank ^^

I suspect it is a direction from the top for them to model after venture capital modus operandi, i.e. buy as many promising start ups as you can and hope to strike that 1 or 2 correct ones to turn the overall portfolio profitable. These successful survivors can then be developed full fledged and integrated into the Group as a future growth driver.

Two main problems with this approach though:

1) The guys who are running the VC show (Allen Lew / Alan Chan and their Board of Directors) are typical corporate managers cum bureaucrats. Their experience, character and business expertise is very different from VC fund managers.

2) Because this VC thing is more like an offshoot adventure of an established cash cow business, they are serverly restricted in the type of companies they can pursue, i.e. it must be from industry adjacencies and able to "synergize" with the existing Group. This curtails much of the flexibility and competitive edge enjoyed by other VC funds.

[CityFarmer]

sometimes I really dunno why SPH and singtel keep overpaying for online business that are making losses or are not so profitable

example sph's purchase of sgcarmart for 60mil
singtel's purchase of hungrygowhere for 12mil

I think at the end of the year its the young entrepreneurs that sold out that's laughing their way to the bank ^^

I suspect it is a direction from the top for them to model after venture capital modus operandi, i.e. buy as many promising start ups as you can and hope to strike that 1 or 2 correct ones to turn the overall portfolio profitable. These successful survivors can then be developed full fledged and integrated into the Group as a future growth driver.

Two main problems with this approach though:

1) The guys who are running the VC show (Allen Lew / Alan Chan and their Board of Directors) are typical corporate managers cum bureaucrats. Their experience, character and business expertise is very different from VC fund managers.

2) Because this VC thing is more like an offshoot adventure of an established cash cow business, they are serverly restricted in the type of companies they can pursue, i.e. it must be from industry adjacencies and able to "synergize" with the existing Group. This curtails much of the flexibility and competitive edge enjoyed by other VC funds.

IMO, SPH does not follow the approach of VC. VC invests in start-up while it is still cheap, rather than already successful one e.g. sgcarmart which costs tenth of million.

[cfa]

How many in the industry know who actually own sgcar.

[KopiKat]

From post #536,

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

How much of the $60Mil will go to the 3 founders? Do you think they'd have been able to negotiate with SPH for such a hefty price tag by themselves? Guess who's JDB Investment? An old Press Release dated 23-Dec-10 ought to give a good clue to many Qs...

[funman168]

I wonder how much will tehy pay for PropertyGuru...hmm

[wsreader]

After considering website traffic, search engine ranking, social media presence, user experience and a few other criteria, this website value sgCarMart at $1.6mil.

http://www.worthofweb.com/website-value/sgCarMart.com

(no vested interest, just stumble upon it via google)