Wednesday, August 24, 2016

Recent action: Bought Singpost

Just a head up.

Singpost fell in higher volume today. Guess Alibaba might finally decide no deal for venture of Quatium Solutions? Perhaps the next CEO also ran away? LOL

I believe Singpost can grow earnings by 10-20% over the next 2 years, with or without Alibaba. Of course, a JV with more capital injection is welcome. With Alibaba, it might grow at an higher end of that range. 

As mentioned in previous post, logistic is the crown gem.

Quarter to quarter, they might not be doing well. But it is growing ok YOY ( seasonality is a factor). December is the peak period and a weak Q2 should not be over-extrapolated.

SP mall will be back in operation soon and the omni channel will be the next frontier to be fought in e-commerce and Singapore and Singpost has first mover advantage in SEA.

I might be wrong, I have no insider information.

Again, the tactic is simple. Buy small, start small and if it falls, buy again. 

The next 2-3 months will have plenty of market moving news.

Appointment of CEO, even the non-appointment of one after the acting CEO assure investors it should take place this year will be a mover.

The review to be taken by the new team, including dividend payment sustainability 

Alibaba's commitment or lack of, to grow its presence in SEA through Lazada and Singpost or with Lazada only. 

Have fun, get ready for the ride. 

I didn't even go into Fed ...  


12 comments:

  1. Hi SI

    Good strategy you have.

    I did not take a close look into singpost but 10% to 20% earnings growth are pretty dazzling... it should gives a good gain once that happens.

    ReplyDelete
  2. hi B,

    I hope too. But i have too many examples of I getting my assumptions right but still not gotten my "gains" (Lee metals)

    There are also times I got my assumptions wrong but things turn out well. (CMPH)

    But whatever it is, it is a learning experience LOL

    When u look at it please post it, especially since your wife has experince with e-commerce as a business

    ReplyDelete
  3. Hi SI

    like what you mentioned, logistic is the crown gem aka their posting services.

    Many glcs, Sb will still engage the services of singpost for obvious reasons and apart from that, also for security.

    E-commerce or not is secondary.


    ReplyDelete
  4. STI,

    you think so too?

    I believe when it is trading close to $2, it needed a lot of growth to materialized.

    Now, i think the downside is more manageable.

    Cheers.

    Are you a fellow shareholder?

    ReplyDelete
    Replies
    1. Hi SI

      I guess we need to link back to the dots where we also had discussion on singpost 2 years plus back. (http://sillyinvestor.blogspot.sg/2014/01/random-thoughts-shouldn-singpost-and.html)

      Noticed that there are constant posts from your side regarding singpost.

      I would think there are still room for drop,(dragon without head) and a possible rise of interest in september that could further dampen.However we should not forget about the business core and its fundamentals.

      Under radar now, potential. Hehe

      Delete
    2. Hi STI,

      I considered the dragon without head problem too. But I think Wolfgang has laid so much foundation that whoever no need re-invent the wheel anymore.

      I think I do not need a high flyer to run Singpost at this stage. Just earn rent for SP mall, and continue to build the logistics. Jagged peak customer should be Ommi channel related, either addidas or Neatle at SP

      I perhaps is too optimistic ... But if I not optimistic and won't be buying ...

      The down-side is quite limited in my humble opinion. The logistic and e-commerce is feeding the boring mall busines that the decline has flattened out, unlike SPH advertisement revenue for example...
      I defintely buying if it falls close to 1.2 again.

      Delete
  5. Well said! Start small... but think Big! :)

    ReplyDelete
    Replies
    1. e... Hi DK

      My thoughts? Start small, get bigger can liao...

      No need big, I no need FI before 55, 45,

      I can't and I dun hanker over it anymore.

      Delete
  6. Hi SI,

    I'm looking at singpost too. But I'm waiting to see how it handles 1.30-1.32 level but deciding. I'm a little worried about the uncertainty of the dividends policy since their chairman hinted strongly that they are going to revise it. Are you worried?

    ReplyDelete
    Replies
    1. Hi LP,

      I do think that is cause for worry.

      But i doubt they will cut it drastically. Like from 7 cents to 4 cents??

      Maybe worst case scenario is 5 cents?

      Actually the growth model of e-commerce is highly cash burning, especially during the expansion phase. I am
      Not sure if the new CEO is going to continue to buy and expand or try to synergy the operations and make omni-channel work.

      I believe the chances for the later is much higher. Anyway. Very small stake la. So not worried

      Delete