Tuesday, March 3, 2015
I Sold SingPost
I finally decided to sell SingPost after holding it for more than 4 years.I bought it at around $1.15 and have collected 6.25 cents annually these 4 years. As it is, the current price of around $1.98 does not commensurate with its earnings of about 7 cents per annum.Despite all the hype surrounding Alibaba injection of capital into SingPost, we must remember that SingPost is actually not doing ecommerce directly but more the grunt work of delivering ecommerce parcels.Alibaba do not even want to do the logistics portion in China as it is high cost and low margin.I have watch SingPost performance over the last few years and it seems that the net EPS is fairly stagnant despite the transformation underway. The net increase in logistics EPS is barely keeping up with the fall in core business EPS.Right now, PE ratio is about 28 is which pretty high with low NAV value.SingPost Mall is outdated and relatively uncompetitive, to upgrade to compete, capital will need to be spent for AEI.All in all, I reckon it is better to redeploy my fund invested into SingPost into areas of higher returns.