The fourth part of my investment portfolio in which objective is to create wealth to retire.
Stock : SingPost
SingPost was listed in May 2003 with an IPO price of $0.60. SingPost is granted exclusive provider of basic mail services with respect to letters and postcards (excluding express letters) in Singapore until 31 March 2007, and a non-exclusive provider of these services until 31 March 2017. SingPost provides mail business, local and international express delivery services, warehousing, fulfilment and distribution services and retail services through its distribution channels. Vested in 2008 and currently holding at an average price of about $1.0093. Due to its constant dividend of 6.25 cents per annual which translates to 6.19% dividend yield with reference to holding price of $1.0093, SingPost is regarded as an "income stock" in my portfolio. The constant dividend is a good hedge to inflation until if there is any changes to the dividend payout.
Potential Upside :
SingPost currently own several properties under its own, namely the SingPost offices like the Paya Lebar HQ and should it decides to sell off those properties in exchange of leasing back, SingPost could realize a hefty sum of profit and that could distribute back to shareholders as part of special dividend. Despite Singapore liberalization of the postal services in 2007 to allow other companies to provide postal services, SingPost still hold the master keys to the letter boxes of public housing and still dominate in the Singapore postal business and that has allowed SingPost to maintain its core business revenue. With the emerging of email and internet, the demand of postal mails has slowed in recent years and that without any doubt has affected SingPost's traditional postal services ( not only SingPost but global postal service providers all facing the same problem ), and to offset that, SingPost has been looking into venturing into other areas in expanding its business. It has a vPost and Clout Shoppe service which allows consumers to do overseas online shopping cum delivery services to door step. It also acquired Quantium Solutions which specializes in logistic and fulfilment services to businesses in Asia Pacific region with its e-Commence solution. Furthermore it also tied up with banks to provide housing loan ( UOB bank ) and basic banking services ( DBS bank ). To diversify more on its business, it has allowed consumers to pay bills and used SingPost as a product deposit/collection service centre ( HP products ). SingPost management is currently looking into more acquisition to leverage on the internet era to expend its business. The constant awareness of business acquisition is to me a potential upside to SingPost business rather than just still relying on the traditional postal mail services.
Potential Downside :
Traditional postal mail services probably is in the sunset era and should SingPost management failed to acquire other business in the longer term SingPost revenue will be slowly declining and that is the potential downside for it.
Personal Expectation :
As an "income stock", personally do not expect SingPost to have a fantastic growth story especially when traditional postal mail business is declining globally due to internet era. However, the ability to sustain its dividend of 6.25 cents per annual is the minimum expectation. In addition, also looking for opportunity to add more when price comes to attractive value.
SingPost
