SingPost *Official* (SGX: S08)

doody_

doody_

Supremacy Member
Joined
Nov 27, 2006
Messages
7,508
Reaction score
7
Paul Lee said:
The treasury shares is transferred to Alibaba as new ordinary shares. Alibaba cannot be holding treasury shares. So overall Alibaba will hold 220,096,000 shares in Singpost but the company only has to issue 190,096,000 new Shares.

Treasury shares are usually shares that the company buy back from the market. And 'cancel' in the sense that they no longer form part of the shares capital. Sometimes they are issue to employee as part of a Employee Shares Scheme.

I dun think the new share will have any impact on Singpost ability to continue with its 6.25c dividend payout. But I will work out the numbers again and see if it is so.

[Update] The new shares adds up to an additional $13.756 million in dividend, which is a drop out of the 200+ million Free Cash Flow for the last FY. So not going to have any impact on Sinpost ability to continue to pay 6.25c dividend yearly.
Click to expand...

Share price has run up quite a bit recently, and 6.25c dividend doesn't seem a lot anymore... at $1.70 that's only 3.67%. I'm hoping they manage to raise the dividend in the future back to 5%, that would imply a 8.5c dividend.
 
starfish.starfish

starfish.starfish

Supremacy Member
Joined
Sep 13, 2007
Messages
5,095
Reaction score
2
doody_ said:
Share price has run up quite a bit recently, and 6.25c dividend doesn't seem a lot anymore... at $1.70 that's only 3.67%. I'm hoping they manage to raise the dividend in the future back to 5%, that would imply a 8.5c dividend.
Click to expand...

Maybe this is an elementary question. But don't you measure the dividend based on purchase price rather than current price?
 
SpinFire

SpinFire

Arch-Supremacy Member
Joined
Apr 9, 2001
Messages
24,190
Reaction score
2
doody_ said:
Share price has run up quite a bit recently, and 6.25c dividend doesn't seem a lot anymore... at $1.70 that's only 3.67%. I'm hoping they manage to raise the dividend in the future back to 5%, that would imply a 8.5c dividend.
Click to expand...

I believe investors will now view SingPost as a growth stock rather than a dividend yielding stock. A growth stock with a 3.7% dividend yield is decent.

But only time will tell if the execution of its growth strategy will yield higher net profit. Currently revenue has been growing at double digits, but net profit has been rather stagnant.
 
satire85

satire85

Senior Member
Joined
May 2, 2014
Messages
1,156
Reaction score
255
From OCBC Investment Research:

Following a trading halt yesterday morning, SingPost announced that Alibaba Investment Ltd will be investing S$312.5m in SingPost via a placement at S$1.42/share, following which Alibaba will hold 10.35% of SingPost upon completion. Both companies will also set up a JV in the business of international e-commerce logistics. From SingPost’s point of view, this move will allow it to benefit from Alibaba’s expertise in e-commerce and business volumes, thereby obtaining a scale effect and bringing down cost per unit of good handled, though it is hard to quantify the near term impact given the lack of details so far. We assume a higher terminal growth rate in our FCFE valuation (2.5% vs 2% previously), but after taking into account the dilutive effect of the placement, our fair value estimate drops from S$1.42 to S$1.38. Maintain HOLD, though we note that sentiment on the stock may be strong in the near term due to factors such as the “Alibaba effect”.

=====
 
I

iantay88

Member
Joined
Sep 8, 2013
Messages
124
Reaction score
0
their analysis like very one-sided, only focus on the dilution

satire85 said:
From OCBC Investment Research:

Following a trading halt yesterday morning, SingPost announced that Alibaba Investment Ltd will be investing S$312.5m in SingPost via a placement at S$1.42/share, following which Alibaba will hold 10.35% of SingPost upon completion. Both companies will also set up a JV in the business of international e-commerce logistics. From SingPost’s point of view, this move will allow it to benefit from Alibaba’s expertise in e-commerce and business volumes, thereby obtaining a scale effect and bringing down cost per unit of good handled, though it is hard to quantify the near term impact given the lack of details so far. We assume a higher terminal growth rate in our FCFE valuation (2.5% vs 2% previously), but after taking into account the dilutive effect of the placement, our fair value estimate drops from S$1.42 to S$1.38. Maintain HOLD, though we note that sentiment on the stock may be strong in the near term due to factors such as the “Alibaba effect”.

=====
Click to expand...
 
netbookcraze

netbookcraze

Banned
Joined
Apr 26, 2009
Messages
24,866
Reaction score
599
Alibaba's jewel is taobao and alipay.

Taobao can grow in South East Asia if they can lower or ship to this region for free..

Do also note that Singtel holds a percentage of Singpost...
 
L

lawtjw1985

Member
Joined
May 20, 2005
Messages
141
Reaction score
0
I have divest my Singpost just to lock down the profit first sticking to my investment strategy/principles. I think the price is a little overpriced at the moment due to the hype of AliBaba for the short term. Long term wise I believe i can scoop some again when prices stabilise or dip.
 
A

athulican

Master Member
Joined
Mar 23, 2009
Messages
2,645
Reaction score
98
The deal is subjected to regulatory approvals, including MAS and IDA, on 28 June 2014. Shouldn't be a show stopper though. I think sell on news may happen after that, but at what price?

Another thing is the other boring businesses may look at this deal and say "You know, maybe we could do similar things" and who knows, we may start seeing more capital injections into other TLCs? :s13:
 
You must log in or register to reply here.
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ Forums. Forum members and moderators are responsible for their own posts. Please refer to our Community Guidelines and Standards and Terms and Conditions for more information.
Top