(08-08-2012, 09:21 AM)Greenrookie Wrote: SP logistic segment op margin has been in a decreasing trend from about 10% to 4% since they bought quatium 4 yrs ago. Last year was the worst and the reason given was more investment to transform the company. Before that, the reason was expiry of job scheme. Didn't have much confident in the execution. Assuming mail segment contribution continue to shrink, logistic margin really need to grow at a much faster pace. At the peak, logistic op contribution was double of last year, but dividend remain at 6.25cents. Highly unlikely that dividend will grow in coming years, although it shoul not shrink either
First of all, SingPost is fall under my No-grow/Slow-grow categories of stock. It means sustainable dividend + good dividend yield is a must. When price reaches "switching" range is a bonus
Let's back to main topic
I agreed mail segment contribution will continue to shrink, but hopefully be as slow as possible
With new management team on board, let's see what wonder can be done with the logistic + retail segments' revenue and margin
One more point to watch is the M&A activities with the current cash reserve. Organic growth of non-mail segments alone may not be sufficient, growth via M&A probably is the better way to go.
Was taking a closer look at the numbers from singpost mail segment, hoping to get some clue of the rate of deterioration of contribution from this segment. Was surprised to find that from 2005 till now, the mail segment has been rather stable in terms of revenue, net profits, margin and bulk mail volume. (See attached)Perhaps the mail segment is more resilient than we thought?
(Interested but not vested)
(18-08-2012, 11:29 PM)Greenrookie Wrote: Was taking a closer look at the numbers from singpost mail segment, hoping to get some clue of the rate of deterioration of contribution from this segment. Was surprised to find that from 2005 till now, the mail segment has been rather stable in terms of revenue, net profits, margin and bulk mail volume. (See attached)Perhaps the mail segment is more resilient than we thought?
(Interested but not vested)
Thank you for this summary as I have always wanted to look further into Singpost, but can't bring myself to put some time into it.
I see a sharp deterioration in logistic margin since 2008 and further exacerbated after expansion of revenue in 2010. Low margin to drive revenue growth? Given the nature of postal and logistic, expansion of revenue should lead to expansion to margin and not the other way round.
(18-08-2012, 11:29 PM)Greenrookie Wrote: Was taking a closer look at the numbers from singpost mail segment, hoping to get some clue of the rate of deterioration of contribution from this segment. Was surprised to find that from 2005 till now, the mail segment has been rather stable in terms of revenue, net profits, margin and bulk mail volume. (See attached)Perhaps the mail segment is more resilient than we thought?
(Interested but not vested)
Thank you for this summary as I have always wanted to look further into Singpost, but can't bring myself to put some time into it.
I see a sharp deterioration in logistic margin since 2008 and further exacerbated after expansion of revenue in 2010. Low margin to drive revenue growth? Given the nature of postal and logistic, expansion of revenue should lead to expansion to margin and not the other way round.
Any explanation?
The explanation by management is the investment in quatium (Cost), company made a few acquisitions of varying stakes in various companies. Q1 results have already seen a improvement in logistic margin, if Q2 is better, it would means the cause behind the fall in margin is indeed the acquisitions because for the last 3 months, there is no significant investment except for a small sum in a Vietnam company. There is however, no guarantee that such investment will bear fruits, also, the acquisition spree is most probably not over, given they just raise funds from the market, the new management has no track records with singpost too. Nonetheless, I like what I saw, since the mail segment which is the bulk of earning is holding up well. I am just waiting for the Q2 report to confirm my assumptions and also the right price...
(24-08-2012, 12:28 PM)Drizzt Wrote: need a bit of a help here. for those parcels sent via registered mail for your TaoBao or Qoo10 delivery, what kind of mail is that grouped under?
i suppose that is an opportunity for the company that could become a prevalent culture isnt it.
singpost group parcel delivery under logistic. Its under speedpost, which has rather very poor review online.
Speedpost in the network in Singapore. There are trying to build a regional logistic provider. As seen in the aquistions. I ask my friends who often shop online and used to be a customer of vpost. He shared horrible stories about speedpost. He told me a friend bought a antique watch for few thousands, speedpost advise he buy insurance for that parcel. His friend agreed, but the watch arrived smashed. When he wanted to claim, singpost denied all responsibility. For a number of years in their AR, they claim customer satisfaction has improved from survey collected. How accurate is their surveys. I have no comments. Well, guess if u take away logistic as a major growth driver, singpost is still attractive in other ways. I have misgivings about their logistic segment too.
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