Looking at Cashflow Statement, FY 2016/17 is a better year than FY 2015/2016 as all the CAPEX has been spent already. The total Free Cashflow is improving for this FY 2016/2017. However, I saw a big ticket item on increase in bank loan, increases from 253,113 to 522,031. Nonetheless, Interest coverage ratio remained healthy at 24.7 times, compared to 42.1 times last year, its cash position is relatively good but at the expense of cutting dividend. I still think Singpost’s dividend policy should not be changed. They should reduce their staff cost, pay them with dividend. You can use your dividend model to derive the intrinsic share price of Singpost. This is on my watchlist for now.
Mr Market whacked the share price of Singpost and share price tumbled more than 7 percent in the morning. TradeGlobal, the US ecommerce firm Singpost acquired in 2015 is expected to incur losses for full year. TradeGlobal accounted S$169 million in goodwill and S$43 million in customer relationships in the intangible asset. I am waiting patiently for the big cut in price.
Today the share price hit lowest at 1,32, Let’s see whether it will reach close to 1.25.