SPH share price in need of Tongkat Ali

SPH investors must be wondering what the hell is happening to SPH share price. For the last couple of years, SPH share price had an astonishing correction, falling from a mighty high of $4.00 in 2016 to the current $2.45 level. It appears to me that FY2018 had been a watershed year which saw SPH recording revenue that fell below the critical $1 billion. That killer blow sent SPH share price reeling to the rock bottom.

Given that SPH share price is in a state of disarray, will the recent takeover of M1 turn the tide for SPH? Should investors run for their lives or buy on the dip?

SPH share price in coma

Looking back, it is not difficult to determine the reason for the bearish SPH share price as revenue continuously fell from $1.17 billion in FY2015 to $982 million in FY2018. Even the change of CEO in FY2017 did not manage to halt the decline in business fundamentals nor revive the ailing SPH share price performance. The rot continued for SPH share price and apparently, the management has not found a way to get out of the rut.

At times, SPH did look like a lost boy in the jungle as it struggled to fight gravity and find its way out of the maze. Its several attempts to diversify revenue source do smell like borderline desperation as some of its acquisitions had been outright bizarre buys that do not really fit in with their core businesses. Notable strange investments were the UK student housing business, pre-school centre (MindChamps) and an old folk home (Orange Valley).

Understandably, the new businesses are part of SPH’s transformation initiatives and I do not expect them to yield profits in the medium term. But what is puzzling to note is that the acquisitions did not improve revenue at all. Instead, revenue kept falling off the cliff. It seems that the destruction in its core media business has offset the revenue income from its non-core businesses. And this is very worrying indeed for the media conglomerate. No wonder SPH share price had been bearish in recent years. The financial result simply speaks for itself.

Can M1 revive SPH share price?

Apart from its Property segment, the other new businesses hardly change the game for SPH. However, in M1, SPH should see a [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

In a bid to raise financial literacy and reward SG Wealth Builder members, I am pleased to launch the Best SGX stock research campaign. Winner of this contest gets to receive cash prize of $1000!

The rationale for launching this activity is to level the playing field for retail investors, who often lack access to quality SGX stock research, especially homegrown SME stocks. Through this SGX stock research campaign, I hope to raise interest in SGX stocks among local investors, and at the same time, encourage members to share ideas and showcase their analytic skills. The winning entry will be published in this blog for learning purposes.

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