SingPost    Last:0.57   -

SingPost vs SMRT

Today BT.

Mr. Leong Sze Hian Singapore , posted the below article today. I am a real supporter for Mr. Leong for the past years, he commented in a lot of area and gain my support as he always view in a angle for those unfairness such as the public transport hikes etc. But here in this tiny island, what can we do, just endure and tak-han as this is the kind of government all have chosen.

Hikes in postage rates unjustified





I REFER to media reports that Singapore Post (SingPost) will increase postage rates from Dec 18.





I REFER to media reports that Singapore Post (SingPost) will increase postage rates from Dec 18.



The increase is from 23 cents to 25 cents, 70 cents to $1.10, and $2 to $2.20, for domestic mail weighing 20g or less, international airmail zone 3 and registered mail, respectively.

The increase is therefore 9, 57 and 10 per cent respectively for the three categories.

SingPost has cited increasing costs and declining volume of postings as the reasons.

However, according to its website, net profit rose by 19.9 per cent to $36.1 million for Q2FY07 from $30.1 million for Q2FY06; 11 per cent ($110.5 million to $123 million) for FY06; and 6 per cent ($104.3 million to $110.5 million) for FY05.

So, the above shows that the pace of profit growth was 83 per cent (from 6 per cent to 11 per cent) from 2005 to 2006.

What then is the justification for now raising postage rates by as much as 57 per cent?

SingPost is a former statutory board, and now a publicly listed company, which operates as a monopoly for postal services.



Is there any authority to check on its arbitrary price increases?

Its press release assertion that 'domestic mail postage rates were last revised 11 years ago' is incorrect as, according to its press release dated Dec 22, 2003, on its website, 'it will revise its domestic postage rates for standard mail for the first two weight steps of 20g and 40g with effect from Feb 3, 2004 to account for the revised 5 per cent GST which will take effect from Jan 1, 2004 . . . the postage rate for standard mail up to 20g will be revised from $0.22 to $0.23'.

 

Well done jackjames, you probably sold it at a high today! Congrats!

 

Yeah, throw all my 10 lots of singpost today at 1.04... small gain (bought at 1.02, but it dropped to 0.975 last week!! ), but good enough to get them away..

 

Both these companes are for long term 'play' of which I'll go for SMRT 'cos of better dividend payout. Frankly, not much of a risk, though; but the ride is rather slow. You'll reach your destination safe&sound if you can afford to wait! Cheers!

 

Morgan Stanley said it has upgraded its rating to "overweight" from "equal-weight" and raised its target price for the stock to $1.19 from $1.15 previously as it believes the market has already factored in the negative implications of the impending liberalization of the basic mail delivery business in Singapore.



"We think the recent sharp decline in the share price is excessive and (believe that) the market has fully factored in the potential earnings downside should a strong competitor arrive on the scene upon postal liberalization," Morgan Stanley said in a note.



"In fact, we think its unlikely that a strong global operator will emerge and successfully challenge the efficient incumbent postal operator in such a small market," it added.



"Moreover, we think high infrastructure set-up costs, license fees and banker's guarantees are likely to deter strong global operators from entering the liberalized market post March 2007," it said.

 

SINGAPORE (XFN-ASIA) - DBS Vickers said it has cut its target price for Singapore Post to 1.12 sgd from 1.24 previously on the view that the company could lose up to 30 mln sgd or 15 pct of market share in the domestic basic mail service (BMS) by the year to March 2011 if Singapore fully liberalises its BMS market from April next year.

But the brokerage expects limited competition with the liberalisation, saying security concerns over the sharing of the masterdoor key for Housing Development Board letterboxes could dissuade the entry of new players in downstream mail delivery.

"We believe that new players would (only) enter the upstream activity of mail collection, and (that they will) target business customers in a selected coverage," DBS Vickers said in a note.

Competition from global players is also likely to be limited as these players are expected to focus on the multi-billion-dollar European market rather than the smaller Singapore market of about 200 mln sgd, it added.

Hence, DBS Vickers said it is keeping its "buy" call on the stock.

At 10.21 am, Singapore Post was up 0.010 sgd or 1.03 pct at 0.985, on volume of 437,000 shares.

 

definitely on a downtrend.

 

Go for SMRT if it is below 1.10. (On monday, pick up 50 lots at below 1.10!)   There are good opportunities.

 

With their monopoly being jeopadize next year, I'll say stay out of this counter. I think it will drop further.

 

THe CapitalGroup sold 3m of Singpost shares and have cut its stake to 10.88% from 11.04%.

 

Could see resistance broken to below $1 due to loss of monopoly next year.

 

Hi Sporeguy,

This is what I read from the charts.

SingPost - Volume traded is ok. But the stock is downtrending now.

SMRT - Volume traded not too good. But I believe there should be some sharp price movement soon. Also, this price movement could be an upward one.

 

Hi TA and FA experts,

Any idea, which is better ? Singpost and SMRT ?

Singpost seems to be able come out with good business idea whenever their business is threaten. Also higher dividend than SMRT. Looks like SMRT will have higher expenses to carry out their business.

 

Buy on weakness, sell on strength!

 

The news say all fare hikes go to drive pocket. Look like comfort will be benefit from this hike!

 

thanks for the info and the tips!

 

Hi tanglinboy, both are part of my stock portfolio. Think SMRT still have space to appreciate. Today closed @ $1.13. Note that volumn has decrease recently but there are sign of accumulation @ current price. Might be top volumn tomorrow especially Comfort Taxi are allowed for fare hike. Watch this counter.....    

 

SMRT will have much better prospect than Singpost. With future expansion of the mrt line, SMRT will benefit anf earning should continue to grow.

 

Good point... Sept11, are you vested in both?

 

Scotty, both counter worth a look, given their sustainable business & generous dividend policy. They are GLC (government link companies) & monopoly in their business. Remember the SWOT strategy? How about this: SMRT= Singaporean Must Ride Train?