Singapore Post

[lonewolf]

Singpost just announced another acquisition for an eye-popping S$60 million for a 62.5% stake in Famous Holdings, an established Singapore-based sea freight consolidator and freight-forwarder.

Press Release: SingPost Strengthens its Logistics Business with Acquisition of Freight-Forwarding Company
Announcement: ACQUISITION OF SHARES IN FAMOUS HOLDINGS PTE LTD

"A further consideration of up to S$50,000,000, to be determined based on the final valuation of the FHPL Group..... Accordingly, the aggregate consideration (consisting of the Sale Shares Consideration and the Option Shares Consideration) for the entire share capital of FHPL, is up to S$110,000,000, subject to certain earn-out adjustments."

Frankly, I'm a little concerned with this acquisition. S$110 million for a company whose NAV is S$12,276,873. That's a hell of a premium to be paid. Has Singpost overpaid?? Are Famous' regional network with offices in 6 countries namely, Singapore, Japan, Australia, China, Malaysia and the USA worth the premium?? I'm not even sure about the synergistic value of the acquisition. Yes, it will add value to Singpost logistics business; but NVOCC (Non Vessel Operating Common Carrier) operations is an extremely competitive industry with low margin. How much value will Singpost be able to extract from this acquisition will probably depends on the integration process.

[CityFarmer]

Singpost just announced another acquisition for an eye-popping S$60 million for a 62.5% stake in Famous Holdings, an established Singapore-based sea freight consolidator and freight-forwarder.

Press Release: SingPost Strengthens its Logistics Business with Acquisition of Freight-Forwarding Company
Announcement: ACQUISITION OF SHARES IN FAMOUS HOLDINGS PTE LTD

"A further consideration of up to S$50,000,000, to be determined based on the final valuation of the FHPL Group..... Accordingly, the aggregate consideration (consisting of the Sale Shares Consideration and the Option Shares Consideration) for the entire share capital of FHPL, is up to S$110,000,000, subject to certain earn-out adjustments."

Frankly, I'm a little concerned with this acquisition. S$110 million for a company whose NAV is S$12,276,873. That's a hell of a premium to be paid. Has Singpost overpaid?? Are Famous' regional network with offices in 6 countries namely, Singapore, Japan, Australia, China, Malaysia and the USA worth the premium?? I'm not even sure about the synergistic value of the acquisition. Yes, it will add value to Singpost logistics business; but NVOCC (Non Vessel Operating Common Carrier) operations is an extremely competitive industry with low margin. How much value will Singpost be able to extract from this acquisition will probably depends on the integration process.

This is the long-waited major acquisition from SingPost. This is the biggest one IIRC, the next major ones are around $11-12 million.

The PB paid is around 8.9 (with call option potentially co-funded by shares). The previous acquisition of 4PX Express is around PB 8, which cost around $12 million.

I am not sure it is overpaid or a fair deal? More homework needed to access

(vested)

[CityFarmer]

SingPost 9 months result is announced.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

Key points extracted by SingPost presentation
- Overall 9 months revenue increases by +10%, but expenses increases more by +14%, thus net profit decreases by -1%
- Mail business 9 months revenue increases by +12%, with Op profit increases by +4%. Higher increases for Q3 results. It shows the mail business remain healthy.
- Logistic 9 months revenue increases by +9%, while op profit increases by +15%
- Retail 9 months revenue increase by +12%, while op profit increase by +36%

It seems that the corporate expenses have pull down the overall bottom line. It is the corporate expenses on service quality improvement and M&A

[CityFarmer]

I have done first switching of 2013 with SingPost shares due to the exactly the same reasoning as in the report.

Will be back at right time ...

OCBC Downgrades Singapore Post To Hold From Buy

OCBC downgrades Singapore Post (S08.SG) to Hold from Buy as its stock price nears its $1.23 fair value.

"As a stock, SingPost has rewarded shareholders with handsome share price returns while providing stability and ease of mind, in addition to its consistent quarterly dividends," it says. "We look forward to SingPost's transformation as it seeks more growth opportunities, but till then, we see limited upside potential unless earnings growth from its acquisitions proves to be better than expected."

http://www.theedgesingapore.com/the-dail...m-buy.html

[greypiggi]

I have done first switching of 2013 with SingPost shares due to the exactly the same reasoning as in the report.

Will be back at right time ...

OCBC Downgrades Singapore Post To Hold From Buy

OCBC downgrades Singapore Post (S08.SG) to Hold from Buy as its stock price nears its $1.23 fair value.

"As a stock, SingPost has rewarded shareholders with handsome share price returns while providing stability and ease of mind, in addition to its consistent quarterly dividends," it says. "We look forward to SingPost's transformation as it seeks more growth opportunities, but till then, we see limited upside potential unless earnings growth from its acquisitions proves to be better than expected."

http://www.theedgesingapore.com/the-dail...m-buy.html

Yup! Bought 30 lots at 0.99 and sold it all at 1.2 late last week.

[CityFarmer]

I have done first switching of 2013 with SingPost shares due to the exactly the same reasoning as in the report.

Will be back at right time ...

OCBC Downgrades Singapore Post To Hold From Buy

OCBC downgrades Singapore Post (S08.SG) to Hold from Buy as its stock price nears its $1.23 fair value.

"As a stock, SingPost has rewarded shareholders with handsome share price returns while providing stability and ease of mind, in addition to its consistent quarterly dividends," it says. "We look forward to SingPost's transformation as it seeks more growth opportunities, but till then, we see limited upside potential unless earnings growth from its acquisitions proves to be better than expected."

http://www.theedgesingapore.com/the-dail...m-buy.html

Yup! Bought 30 lots at 0.99 and sold it all at 1.2 late last week.

This round the return is about 20% excludes dividends, about 23% includes dividends, not too bad...

[CityFarmer]

Singapore Post Ltd. Rating Lowered To 'A+' From 'AA-'; Outlook Negative

http://info.sgx.com/webcoranncatth.nsf/V...900221921/$file/StandardPoorCreditRatingonSingPost.pdf?openelement

[CityFarmer]

A related market info

World’s postal services struggle with lower demand

OTAKI (New Zealand) — Ms Sandra Vidulich is so excited about the leather boots she ordered through Amazon that she rips open the box in front of the postman and tries them on.

“I looove them,” she declares, as the driveway at her tree-lined home in rural New Zealand briefly becomes a catwalk. “They’re cool.”

For now, a boom in Internet shopping is helping keep alive moribund postal services across the developed world. But the core of their business — letters — is declining precipitously, and data from many countries indicate that parcels alone won’t be enough to save them.

http://www.todayonline.com/world/worlds-...wer-demand

[CityFarmer]

a feasible solution for productivity improvement? Probably yes, since self-service seems a trend nowadays

SingPost launches self-collect parcel kiosks

SINGAPORE — Customers will soon be able to collect their parcels from 24-hour self-service kiosks if they wish to do so, SingPost announced yesterday.

To use the kiosks, customers who sign up for the service will need to scan a QR code which will be sent via e-mail or text message. After they scan in the QR code, they can collect the parcel from a locker. SingPost said it will reveal more details later on its “automated smart parcel stations”.

http://www.todayonline.com/singapore/sin...cel-kiosks

[lonewolf]

This is really not a new idea, is it? I thought they tried something similar at some condominium? Not sure how that end up.

I think its a good idea but the devil is always in the details and how implementation will be key to its success.

If Singpost is smart, they will work with SMRT/SBS-Transit to locate the “automated smart parcel stations” within MRT stations vicinity. But size may be a factor cos how many locker do you need? And where to put all these lockers in a convenient location without affecting aesthetic of the location? Its not going to be easy.

I suppose the lockers dun have to be too big. A typical HDB postbox size can put in a fairly large parcel so slightly bigger may suffice for most package. So maybe the required need not be so big after all.

(Vested)