SPH Profits Up but Circulations Down

The Singapore Press Holdings (SPH) group announced its results last Friday, 12 October 2007. Nothing really eye-popping in the results. Not for a company that dominates Singapore’s news and print media. But here’re some salient nuggets that caught my eye:

1. The Property Side of the Business

• This is not new, but for those who still don’t know, SPH wholly owns The Paragon shopping mall in Orchard Road.
• The maiden booking (accounting) of the revenue/profit of their new Sky@eleven condominium has started.

2. Circulation Falls for Most of SPH’s Print Media.

See the below chart from the news release. The circulation of most of their newsprint media slid year-on-year – around 1 to 3% for six out of eight of their (non-free) newspapers. The two newspapers to buck the trend were Berita Harian (7.4%) and Business Times (4.9%). I can understand BT (economy’s booming remember ? , but BH ? Hmmmm. At the other end, the 3 worst performers were LianHe WanBao (-3.7%), LianHe ZaoBao (-3.1%) and The NewPaper (-2.9%).

3. Out with the Old, In with the New ?

Just a week before, on 4 October, a low-key announcement was made about a new SGD 25 million joint venture, 701Sou (Hong Kong) Pte Ltd, that has been set up with the Fung Choi Group.

The official partner roster :

1. SPH Interactive International – 60%
2. Fung Choi Printing Limited – 15%
3. Rainbowchina Image Company Limited – 15%
4. 701Search Pte Ltd* – 10%

* 50% SPH-owned subsidiary.

That gives SPH a deemed 65% interest.

I’ve never heard of Rainbowchina Image and couldn’t get much info out of the web either. As for Fung Choi Printing, it is a Hong-Kong-based subsidiary of the Fung Choi Media Group Limited which is mainly involved in the printing business in China. The group is listed on the Singapore stock exchange (SGX) main board.

You might also like to note that one of the shareholders (33%) of Fung Choi Media Group is Fraser & Neave (F&N); and that the then F&N rep., ex-group-CEO Dr Han Cheng Fong, the man who made news last week, sits on its board. Will he continue to be there ? I suppose not for long.

Back to the JV. Its announced purpose is :
“to provide digital media services in the PRC market, including the provision of online and mobile search services”

This is interesting, considering that SPH has only just recently announced its foray into online search with a Singapore focus – sphsearch.sg (which I think will only officially launch in Jan 2008). They’ve also been toying with the ZAP Code mobile advertising gimmick (a kind of handphone-readable 2D barcode) for less than a year without much traction.

So even before they’ve established themselves here in Singapore, it looks like a new urgency has emerged within SPH to expand into alternative media search and to do it overseas – in this case, China.

Now if you relook at point 2 above, you’ll realize why.

It seems SPH, the behemoth of Singapore print media, is getting nervous about the future of its traditional newsprint – particularly the Chinese segment.

Will the new venture succeed ?

I’ll leave you to ponder over that question by looking at the history and current state of two other major SPH Internet assets – AsiaOne.com and zaobao.com. The popularity rankings (from Alexa) of both sites over the last 6 years are shown in the below logarithmic-scale charts.

According to the charts, zaobao.com was once among the top 100-ranked websites in the world.

Asia1/AsiaOne.com

Blue: Asia1.com; Red: AsiaOne.com

Zaobao.com

Source : Alexa.com.