Friday, February 5, 2016

Singpost's Alibaba Magic gone?

The Singpost caught my attention a few  weeks ago when it's price went below "Alibaba effect" price.

It was around 1.36 when Alibaba bought a stake in singpost 

So what have changed?

1) price went on a INVERTED V shape journey 

2) top line keep going up BUT

3) core profits are still stagnant or growing unimpressively

4) 2 quarters of 1.5 cents dividends instead of the usual 1.25 cents 

5) still aggressively buying logistic and distribution capabilities and/  assets 

6) logistic operating margin improved in the lastest quarter.  

7) No more updates in the latest quarter on the various Alibaba JVs and strategic cooperation 

8) went from net cash to net debt posotion to fund expansion 

I am doing more of a qualitative analysis here. 

The business plan is simple enough to understand. Ride the e-commerce boom and vertically integrate this into their logistics and distribution business. This would offset the growth or lack of of their mail business. 

What I cannot understand/ don't like is they are going net debt yet increasing dividends. 

They are going property heavy, with the building or a e-commerce Hub. 

The long wait on Alibaba JV which is supposed to be firm up in February (already extended from December)

If you believe the Alibaba magic is still around, and as the word suggest, will appear when you are off guard, current price is worth monitoring. 

If you believe the magic is gone.... Plenty of choices out there now. 

I know nothing about business except using the Internet to do case study. I believed Alibaba bought Singpost for the booming SEA e-commerce market which is relatively less crowded by Giants like Amazon, eBay.

I wonder why singpost go jostle with the Giants through tradeglobal, which IIRC is loss making looking at the pro forma info. 

Was waiting for updates from their quarter reports, but only get "wait huh"

In short, it is no longer the singpost of 3 years ago. 

Staying clear, since there are others more compelling on my watchlist

5 comments:

  1. yeah... was quite surprise after reading the figures going into net debt position and yet increasing dividends.

    Ailbaba is struggling with their own share price having go under ipo prices.

    Long term still positive,but short term is volatile. I am vested and should pick up more slowly...

    ReplyDelete
    Replies
    1. I wanted to pick this up too Rolf. Especially when it is nearer to sub 1.3.

      I did my research 2 years ago, so I went on to see if anything much changed after Alibaba.

      I think the conflict in interest in acquistions is lot of egolistic bullshitting la.

      Please go after the S -chips, some of which are balantly laughing that we are fools.

      But I realise much have changed.

      Although I would not deny that they are very successful in gaining scale ...

      Still interested

      Delete
  2. Great post, silly investor. Very balanced. Thank you.

    ReplyDelete
    Replies
    1. Thanks Trademarksg,

      Singpost is rather successful despite the flaws I mentioned.

      Still watching

      Delete
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