Monday, December 6, 2010

Singapore Press Holdings (SPH) Stock Review (Part 2)

I had a great dinner with my family at Sakae Sushi, Suntec City on Saturday. Did a little Christmas gift shopping at ION Orchard. This is the first time I visit ION Orchard. Can you believe it? Lol :) Luxury, luxury and more luxury goods. I did not even dare to enter some of the shops.


Find out more about ION Orchard and all its Festive Promotions. < Click Click!




As promised, this is the second part to the SPH stock review. Some readers commented that SPH's core print business is declining while others commented that SPH's fundamentals still looks strong.


Well, I am definitely not an overly-optimistic, look-at-world-with-rose-tinted-glass kind of person. In fact, I am actually quite pessimistic in nature. But I am trying to be optimistic whenever possible because really, ladies do not want to hang out with a pessimistic guy :P


On a more serious note, I am going to "flip the coin" and focus on SPH's weaknesses in this post. Here goes......


Weaknesses of SPH:


1. New media and property business might be insufficient to offset revenue decline from Core Print Business
SPH is reaping profits from its various newspaper websites and other social news websites such as STOMP and Razor TV. However, the revenue generated from the new media business is still relatively small compared to the core print business. I consider this a major weakness. Therefore, I don't see the new media business replacing SPH's core print business anytime soon.


Newspaper circulation is declining rapidly around the world except Asia. SPH might end up like companies such as New York Times, Los Angles Times and News Corp. 


Find out more about declining newspaper circulation here < Click Click


2. Inexperience in alternative businesses
Everyone knows that SPH overbid for the Clementi Mall project by a huge amount. This shows the inexperience of SPH in alternative businesses. This particular weakness can be remedied by setting up a subsidiary and employing staff with the required knowledge and skills in a particular industry.


Read about SPH's strengths here < Click Click!


Please share your thoughts by commenting below. Do you know of any other weaknesses of SPH? 


Peace Out,
Dividend Warrior

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