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Monday, June 4, 2018

Starhub bottomed out?

30 May 2018, Starhub in a StraitsTimes article mentioned that they will be dropping out 11 TV channels from 30 Jun 2018 onwards.

Starhub's stock drop 4.5%.

Failed negotiation
Starhub's portfolio of educational channels will no longer be available to viewers due to a failed negotiation between Starhub and Discovery because it is not willing to pay a fair value for the programmes.

Types of disruption
Technology and piracy could be a part to play. Internet TV like Netflix and Youtube have disrupted the television business because of the availability of programs. Speed of internet also makes it faster to view the video clips and movies online. Piracy still exist because it markets itself as a cheap alternative to viewing starhub channels. A $45-$60 dollar a month subscription from Starhub could only cost you $8 per month with a pirated TV box, which is able to access most of Starhub's channel.

With multiple disruptions to its TV business, Starhub can no longer command a premium price for its TV subscriptions. Therefore, it is understandable why Starhub is not be willing to pay a premium to keep its educational portfolio.

Moving forward
Starhub can replace these channels with cheaper alternatives or to decide to slowly wind down their TV business and invest in new businesses to be able to sustain shareholders returns.

Source: Maybank Kim Eng - ketrade platform
10 year historical price chart
Starhub trading at close to crisis levels

Source: https://www.businesstimes.com.sg/companies-markets/discoverys-portfolio-of-11-tv-channels-to-be-dropped-from-starhub-after-june-30

Tuesday, March 6, 2018

Raffles Medical could be worth a bet


Raffles medical appeared to be near 3 year low levels.

Increased Healthcare Spending

"Singapore may have to foot a bigger health bill to care for its ageing population.

Government expenditure on healthcare is expected to "rise quite sharply" in the next three to five years, Finance Minister Heng Swee Keat said yesterday.

He expects it to go up by at least $3 billion by 2020 from the current levels."


FY2017 Results

Raffles Medical reported a 5% increase in operating cashflow in FY2017 which enabled the group to support its investments in Raffles Hospital Extension and its China expansion plans. 

Government Partnerships

It also maintained a partnership with the Ministry of Health and Agency for Integrated Care(AIC) to provide accessible and comprehensive family medicine. This partnership enabled Raffles to improve its relationship with government bodies, and thus managed to clinch an Air Border Screening contract by MOH and Civil Aviation Authority of Singapore. 

Conclusion

In the years to come, healthcare spending will continue to increase due to aging population and inflation of healthcare costs. There is only one factor that could affect investor's perception on Raffles Medical. The cash intensive investments towards China namely the Shanghai and Chongqing hospitals. Although they did mention that the progress is on track, whether both this hospitals will contribute positively to raffles or continue to incur losses remains a mystery.