Singapore Press Holdings (SPH)

[violinist]

It's a Monopoly. How do we value that?

[Temperament]

Ya lol, all Singaporean knows more or less it's the mouth piece of the YAMEN. No matter what i think it will be kept alive. The "top brains" there will see that it can make money too. Anyway they have been benefitting all these years more than us ikan billis.

[Some-one]

It's a Monopoly. How do we value that?

Do you mean how to value the business? It is a monopoly in Singapore because there is only one newspaper company in Singapore. They can raise the price as and when they want and people would still have to suck thumb and buy their newspaper for their daily dosage of news.

While some may argue that the online world is taking the print business by storm but do not forget there are still a lot of uncles and aunties who buy Lianhe Wanbao, Sin Ming Ri Bao to read the news. Even for me, I still prefer the print version instead of the online version. I read Business Times, Straits Times and I use shareinvestor as well.

As somebody rightly points out, they are also involved in the the OpenNet Fibre Broadband and they develop the Straits Times Index and most of the major indices with other companies. They are also part owner of MediaCorp and some radio stations. How would such a business disappears in 20 years time?

[shanrui_91]

media company earns much more in advertising than in selling newspaper or doing tv programme.

and while they are part of the STI team, I believe FTSE group earns more since they are the one that compute as well as review the index components quarterly and semi-annually.

going concern is not of a concern to sph but the more impt issue is whether 20 years later will their earnings stagnate, go up or go down? and of course how much dividend will shareholder get in the period

[Some-one]

Well, that's what I mean. They can raise the price of their newspaper and they can also raise the price of their advertisement rates in both print and TV and people would still have to suck thumb to buy or advertise their companies. With the earnings from these businesses, they could use it to plough into other businesses just like when they start their MICE and property business. I do not know about you but I would rather invest into a company that would still be around in 20 years time, instead of companies whom I have no idea what is going to happen in 20 years time.

[CityFarmer]

media company earns much more in advertising than in selling newspaper or doing tv programme.

To give more support on Shanrui_91 statement

Out of the total revenue of ~1 Bil for media biz, ~774 Mils come from advertising, while circulation bring in only ~207 Mils

---

Well, that's what I mean. They can raise the price of their newspaper and they can also raise the price of their advertisement rates in both print and TV and people would still have to suck thumb to buy or advertise their companies. With the earnings from these businesses, they could use it to plough into other businesses just like when they start their MICE and property business. I do not know about you but I would rather invest into a company that would still be around in 20 years time, instead of companies whom I have no idea what is going to happen in 20 years time.

I had attended several AGM, and talked to some of the investors, although all of them feel optimistic on SPH media biz (it should be, otherwise they will not be investor ), but almost all of them stay caution and be alert on the progress.

If SPH management is paying "insurance preminum" of ~40 Mils loses to keep a present on the internet biz market. I believe they also stay alert.

It is good to be optimistic on SPH media biz, but at the same time we should aware that the "risk" involved

Just IMHO

[shanrui_91]

Advertising is not as simple as it seemed to be. To be a successful media, readership and viewership are extremely important.

Newspaper advertising is pretty straight forward as the rate is spelled out out-front regardless of the readership. Rates differ from “Mon-Wed”, “Thurs-Fri”, Saturday and Sunday as well as the page that shows the advertising. However, should readership decline, demand for advertising in newspaper will drop as the ROI from advertisement will have drop. For e.g. rate from straits times is around 80% higher than zaobao and 6 times that of the newspaper due to the difference in readership. This is how Today can operate as a free newspaper as they try to force-feed people to take the paper to boost the readership. That say, there will still be a loyal pool of print readers.

For online advertising, the rates charged by sph are in terms of cpm instead of a fixed charge. cpm means cost per thousand impression. For e.g. if the cpm charged is $50, 1 million view will generate $50000 in revenue. A lesser use form will be those that are charged on a daily or weekly basis regardless of the number of impression. However, it can be more competitive here as they are also fighting with the like of Google and others for a piece of the online advertising pie, though the appeal of SPH lies in the target audience. Profit margin might be higher here as if you observed the online subscription is of around the same price as the print, but they get to save up on the paper and the printing cost.

For tv advertising it will be slightly more complicated. The rate card is usually in the form of a 30 seconds advert though you are free to choose from 10 seconds to 180 seconds are allowed. The rate differs not only by day but also by the period it is being shown. Night time rate is often the more expensive and for premium event where a lot of viewers are expected like maybe a world cup final, then the rate will go even higher. In USA, the super bowl will have the highest rate where a 30 seconds ad will cost millions as a result of a 90m audience base.

20 years later, sph will definitely be around as I do understand the importance of reading news everyday. Whether it can maintain its readership will then be another issue as well as how efficient a return can they generate from this cash cow through investing in property, MICE or any other new business that they can thought of. Clementi Mall is a great success as I do know how dead the area is before it is being built. Whether its other mall or property will end up being as successful is something unpredictable, but paying too high a price will only mean that their ROI will suffer. % Readership has been on a downward trend since 2000 buoyed only by the growth in population in Singapore (from FT and not from Singaporean).

Many invest in smrt for the same reason that public transport will be around 20 years later (unless it is privatised). However, smrt has been depending heavily on advertising and retail space to generate its high ROE and not because that there are more people going on board the train. If the government were to take over the retail rent and advertising revenue, smrt is really just an average or even below average company.

The main point I am trying to drive across is not about SPH being not worth investing but that the cited reason for investing in SPH seemed a bit flawed. If you got your reason for investing in a stock wrong, you will not be able to adapt to any future changes in situation effectively.

(not vested)

[Jared Seah]

Why do we buy a stock?

To make money or make a bet that it will be around for 20 years? (I can't even be sure I'll be around next year...)

The business is profitable and stable. Your investing motive can be more important - wealth preservation or accumulation.

From the March 2009 lows, many stocks have doubled or tripled. SPH... For wealth accumulation, there are better horses to ride; for wealth preservation, it wins hands down.

P.S. Glad to see there are still buy and hold (for 20 years?) investors around. I am pleasantly surprised

(Not vested)

[KopiKat]

Hey! I'd be eternally grateful if any of you could share your SGX stocks, those which'll continue to grow (am interested in bottom line growth ie. EPS, not Revenue) for the next 20 years. (No need to be 100% certain, 90% is ok for me - I take the 10% risk). Thx!

In my case, I must be very unlucky (most likely lousy) as I can only find one that may fit the above criteria once in a blue moon. But, when that happens, someone will surely come around (within 5-10 years) to force it off my hand with a delisting offer. As for others, they may seem to satisfy the above criteria for a few years but they'll either hit a plateau or do something silly (like diworsifiaction) and go on a decline after that.

I continue to search high and low for the 'holy grail' of stocks, but in the meantime, no growth stocks like SPH provides me with the comfort of some Yield certainty plus a tiny degree of Price certainty, which allows me the freedom to choose what I want to do with the Yield eg. Plow back for my own 'Growth' or the Stock eg. Sell Hi - Buy Lo (since it's no growth or many here says will decline, there's a high degree of certainty that if you sell Hi, you can buy back again at a Lo).

[brattzz]

it's a good question, to find growth stocks,
If u can't find one at the moment, have to be patient. Just relax and continue to look out.



SPH is like a "trading" bluechip to me... sell 3.9X, buy 3.6X...