29.5.14

Highlights of the Singpost-Alibaba Collaboration

If you haven't already know, Singpost announced a trading halt yesterday in the afternoon, pertaining to Alibaba's investment in it. The news can be found here.

Instead of boring you with the nitty-gritty details; let's take a look at the main highlights:


  1. Alibaba Investment Limited will invest S$312.5 million to purchase 30 million existing ordinary shares held in treasury by SingPost and 190.096 million new ordinary shares and take a 10.35% stake in SingPost upon completion.
  2. Both parties are forming a joint venture (JV) to leverage on each other's strengths and distribution networks/technology discuss.
  3. Currently, SingPost’s e-commerce and related businesses account for about 26% of its total revenue. The CEO has said that he understands that their core domestic business [mailing biz] continues to be under pressure from rapidly declining domestic traditional mail volumes.
    Thus, he is looking at driving growth through Singpost's regional e-commerce logistics and strengthening it to be a regional revenue stream.
  4. Funds from this investment provide SingPost with financial flexibility to significantly scale up its e-commerce logistics business and build new capabilities as they are poised for growth in the region.

My Opinion

It seems that everything is oiled into place - CEO with the right focus on e-commerce, a strong backing from Alibaba and plenty of ka-ching to expand quickly

While Singpost is selling for a relatively high P/E ratio of 23.08 (from bloomberg as at 28 May); if it can turn its e-commerce biz from 26% of its revenue to 50% - it will mark a very strong growth rate like seen from Raffles Medical (growing at P/E 20+ with strong earnings growth over past years) 

Furthermore, it also offers a 3.79% dividend yield, so it can also provide some decent cash-flow for an investor even if it is a long wait for capital gains.

What do you think about this deal for Singpost? Let me know by leaving a comment under my facebook page @ www.facebook.com/kissinvesting. Thanks & HUAT AH!

4 comments:

  1. Gold headed for a monthly loss as signs that the U.S. economy is improving fueled stock-market gains, while demand for the metal slowed in China, the biggest consumer.
    Bullion Tips

    ReplyDelete
  2. Thanks for the wonderful post. The most important advice I got out of this was to give your readers total honesty. This is what I’m trying to achieve on my own blog, specially when it comes to gluten-free product reviews.
    Share Tips

    ReplyDelete
  3. Shares of Infosys fell as much as 2.55 percent after the India's second largest software services firm saw the exit of its global head of strategic sales, marketing and alliances Prasad Thrikutam.
    Bullion Tips

    ReplyDelete

  4. Copper fell for a fifth session in New York, the longest slump in more than three months, as demand concerns mounted amid slumping imports of the metal into China, the world’s biggest user.
    Bullion Tips

    ReplyDelete