A company analysis on Singapore Post Limited.

1. Company Analysis:
Presented by:
Ng Wen Ying
Wang Si Jie (Jessie)
Wu Shan
Cao Ya Jie

2. Singapore Post Limited
An Introduction and Analysis Approach
ABOUT
•Commonly abbreviated as SingPost
•Associate company of Singapore Telecommunications Limited
•Singapore’s designated Public Postal Licensee
•Provides 1) Mail 2) Logistic 3) Retail services
APPROACH
1: Economic analysis for Postal industry
2: Postal industrial analysis
3: SingPost Business analysis
4: SingPost Financial analysis

3. Economic Analysis
Macroeconomic Environment and its implications
Indicators Trends Implications
GDP per
Capita
•Risen 20% over the last 5 years
Economy is growing and is
generally healthy  macro
environment factors unlikely to
have adverse effects on
company’s financial health
Inflation %
•Stable and within the range of 2% - 3%
Tamed inflation level 
operation cost wouldn’t be
expected to surge if all else is
kept constant.

4. Economic Analysis
Macroeconomic Environment and its implications
Indicators Trends Implications
Interest Rate
• Currently 0.17% and on a upwards rising trend
Rising interest rates and the
impending high interest rate
environment  cost of capital
might increase
Labour Cost
• Labour cost has rise moderately in past 5 years
Rising labour cost implies that
businesses like SingPost that
are labour intensive will be
expecting higher labour cost 
higher operating expenses

5. Economic Analysis
Macroeconomic Environment and its implications
Indicators Trends Implications
Population
• Increased from around 4 million to 5.4 million
Growing population=
 Bigger market & demand
 Better business
OR
 More delivery points and
collection points
 Higher operating cost
Housing
Stock
• Total housing stock increased from 700k to 1.2mil
Increasing number of housing
stock  Increasing number of
delivery points  higher
operating cost

6. Economic Analysis
Trends in the Postal Economy – GLOBAL PERFORMANCE
Source: UPU Postal Statistics
- Total traffic: 368.4 billion
- 2011 declined 3.7%
Letter Business
- Total traffic: 6401 million
- 2011 rose 2.1%
Parcel Business
Global Postal Consumption vs GDP
growth

7. Economic Analysis
Trends Number of letter-po inst t ihtee mPoss ptaol sEtceodn omy – REGIONAL PERFORMANCE
per capita, 2012
No. of LETTER posted/capita 2012
18.3
2.1
294.9
2.9
31.4
11.7
World average in 2012: 49.3
Letter-post traffic performance
LETTER - Traffic Performance
UPU, Bern, October 2013 6
140
130
120
110
100
90
Source: UPU, Bern, Oct 2013
UPU, Bern, October 2013
Best
performers
Base 100 = 1991
Volume index
80
Global domestic
Asia-Pacific domestic
IC domestic
Number of postal parcel posted per 1’000
inhabitants, 2012
No. of PARCEL posted/capita 2012
78.8
4.6
6522.0
1.7
150.0
84.7
World average in 2012: 922
UPU, Bern, October 2013 7 Parcel-post traffic performance
220
200
180
160
140
120
100
80
60
40
UPU, Bern, October 2013
Average
performers
Base 100 = 1991
Volume index
20
Global domestic
Arab domestic
Asia-Pacific domestic
PARCEL - Traffic Performance

8. Economic Analysis
Conclusion on Postal Economy
Sources of Financial income for Postal Operators 2011
• Letter-post volume has been on the decline bringing global postal consumption down
despite a growing GDP
• Letter-post only contributes 20% of total income for operators
• Postal network is increasingly used to transport goods (parcels)
• We expect postal operators to make changes to their business model by taping on
their network and the development in e-commerce to remain competitive
• It is also worth noting that the Asia Pacific region has been the least affected by the
decline in letter business and is also one of the better performer in parcel business

9. Industrial Analysis
Porter’s 5 forces model

10. Industrial Analysis
SingPost Business Overview
SingPost has three main business areas:
1. Mail Business
2. Logistics Business
3. Retail and e-Commerce Business
SingPost monopolizes the mail business in
Singapore (only Public Postal Licensee)
Revenue By Business

11. Industrial Analysis
Suppliers’ Power and Buyers’ Power
The below analysis (+ / -) will be done from the Industry Player’s point of view:
Suppliers’ Power (-)
e.g. Freight service providers
- Large number of suppliers (+)
- Low Switching cost for suppliers (-)
- Limited choices in different suppliers (-)
- Low supplier service differentiation (+) [differs only in destination & duration & capacity]
- Suppliers have high impact on cost (-) [traffic cost of postal industry is high]
Buyers’ Power (+)
e.g. Users of Postal services (Online shop owners etc.)
- Large volume of buyers (+)
- Little substitute services available (+) [service differentiation low]
- Low switching cost (-) [no binding obligation]
- High buyer information availability (-) [transparent fee structure]
- Low price sensitivity (+) [price inelastic, rigid demand]

12. Industrial Analysis
New Entrants and Substitute products
The below analysis (+ / -) will be done from the Industry Player’s point of view:
New Entrants (+++)
- High capital requirements (+)
- Economies of scale in the industry (+)
- Extensive delivery network (+)
- License needed for mail postage business (+)
- Low technology protection (-)
Substitute Products (+)
- Few substitute service (+)
- New IT (email)
- Change in supply chain structure (less reliance on logistics)
- Insourcing (in-house logistics)

13. Industrial Analysis
Competitive rivalry
The below analysis (+ / -) will be done from the Industry Player’s point of view:
Competitive Rivalry (-)
- Relatively large numbers of competitors (-) [7000 logistics companies in Spore 2010]
- Low switching costs between firms
- Monopoly in mail postage (+)
- Distribution of market share (DHL, FedEx, TNT, UPS, SingPost)
- High exit cost (-)

14. Business Analysis
Objective: Visions, Value
Objective
Vision
• To be a regional leader in e-commerce logistics and trusted
communications
Values
• A SingPost culture that embodies the 5Ts - Trust, Total Customer,
One Team, Top Execution and Transformation.

15. Business Analysis
History Development
Historical Timeline
• In 1819, foundation of SingPost in Singapore by Sir Stamford Raffles.
• In October 1858, became a separate department from the Marine Office.
• In 1949, linked with the Postal Department of the Federation of Malaya under a
Malayan Postal Union Agreement.
• On 8 January 1966, admitted to the Universal Postal Union.
• 1 January 1967, became a fully autonomous body.
• In 1982, merged with the then Telecommunication Authority of Singapore.
• In 1992, became the first Public Postal Licensee, and a subsidiary of Singapore
Telecommunications.
• On 13 May 2003, listed on the mainboard of the Singapore Exchange.
Awards
• Earned the honour of being the only company to have won the EMS Cooperative
Certification Award by the Universal Postal Union (UPU) for our Speedpost Worldwide
Service every year since 2001.

16. Business Analysis
Recent Acquisitions
• In 2009, it acquired the remaining 50% stake in G3 Worldwide Aspac
(G3AP),thereby giving the company presence in 10 countries (including Singapore).
• In May 2009, it wholly acquired Quantium Solutions
• In 2011, It raised its stake in Malaysian Logistics player GDEX to 27%.
• In July 2014, It’s subsidiary, Famous Holdings Pte Ltd, acquired Of F.S. Mackenzie.
• In July 2014, It’s wholly-owned subsidiary, General Storage Company Pte Ltd,
acquired the Store House Limited in Hong Kong.
• In August 2014, Shares (10.32% stake) were transferred to Alibaba Investment
Limited(strategic alliance)

17. Business Analysis
Business Segments
Mail
Business
Pillars
Retail &
Financial
Services
E-Commerc
e
Logistics
Digital
Services
SingPost provides an integrated suite of mail,
logistics and retail solutions in Singapore and the
Asia Pacific region. It has three main business
areas: Mail Business, Logistics Business, Retail
Business.
Mail Digital Services
• Domestic & International
Mail
• Philately & Stamps
• Hybrid Mail
• Digital Services
Logistics
• Speedpost
• E-Fulfilment
•Warehousing, Fulfilment &
Distribution Freight
• Self-Storage
Retail & Financial Services e-
Commerce
• Agency Services
• Financial Services
• E-Commerce

18. Business Analysis
Revenue Breakdown

19. Business Analysis
Strategy
Strategic Direction: To diversify its Postal business throughout the 5 pillars
through…
 Mail: continue to deliver quality services & improve efficiency
•Invest $100m in letter mail service enhancement.(sorting machinery, eg. mechanised rate increase from 85%
to 95%; 3 wheels fleet, increase 25% mail carrying capacity for higher productivity )
 Retail & Financial: Enhance customers experience to cater for growing trend in online shopping
•More touchpoints (eg. new post office & automated services)
•Mobile app
•More services(Saturday delivery, 24/7 call center)
 Logistics: focus on development international e-commerce, logistic platform
•Scale up investment in logistic infrastructure
•Strategic acquisition to strengthen end to end ecommerce logistic value chain (Alibaba. F.S Mackenzie)
•Focus on customer services operation excellence (innovation on self-help web booking tool, eg. ezy2ship)

20. Business Analysis
Outlook
• Domestic mail volume expected to remain on downtrend with
operating cost rising
• Continued growth on e-commerce in Asia Pacific is expected
leading to growing parcel volume
• Total development expenses will continue to rise as SingPost
invest in developing e-commerce related capacities
• Non-postal business and revenue from both domestic and
regional market is expected to continue growing for SingPost

21. Business Analysis
Competitors
Mail Business
• Monopoly in Singapore
Logistics Business
• DHL, FedExpress, TNT ,UPS
Retail & Financial Services e-Commerce
• eBay, Taobao, Amazon

22. Business Analysis
Structure
Strategic Alliances Subsidiaries
• Datapost
• Quantium Solution
• Famous Holdings
• Lock+ Store
• Novation
• Samplestore.com
• SP eCommerce
• 4px World Express Co. Limited
• 7-Eleven,Inc. (Food Retail)
• Co-operative Bank Ltd.
• DBS bank Ltd. (Diversified Banks)
• eBay Inc. (Internet Software and Services)
• HDFC Bank Ltd. (Diversified Banks)
• Japan Post Holdings Co, Ltd. (Air Freight and Logistics)
• Lucasfilm Ltd.LLC (Movies and Entertainment)
• Marvel World,Inc
• MasterCard Incorporated. (Data Processing and
Outsourced Services)
• New Zealand Post Limiter (Air Freight and Logistics)
• PayPal,Inc. (Data Processing and Outsourced Services)
• Prudential Singapore Holding Pte. Limited
• Standard Chartered Bank Singapore. (Diversified Banks)
• Standard Chartered PLC. (Diversified Banks)
• State Bank of India. (Diversified Banks)
• Tun Foundation Bank
• United States Postal Service. (Air Freight and Logistics)

23. Financial Analysis
Horizontal Analysis for Income Statement

24. Financial Analysis
Horizontal Analysis for Income Statement
Reasons for decrease in profit
• industry challenges
• weaker business
environment
• increased cost pressures
(labor and rent)
• investment in its operating
capabilities, people, IT and
operations.

25. Financial Analysis
Horizontal Analysis for Cash Flow Statement
• Steady increase in operating cash flow
• Increase in cash outflow in financing activities was mainly due to the repayments of
the S$300 million bond and S$15.5 million

26. Financial Analysis
Vertical Analysis fir Balance Sheet

27. Financial Analysis
Dividend Policy
Dividend Policy
• Singapore Post has a stable dividend policy of paying fixed dividend per
share for past 7 years.
• Barring unforeseen circumstances, the Group will endeavor to pay a
minimum annual dividend of 5 cents per share.

28. Financial Analysis
Ratio Analysis

29. The End
Presented by:
Ng Wen Ying
Wang Si Jie (Jessie)
Wu Shan
Cao Ya Jie