01-11-2011, 12:05 AM
(31-10-2011, 07:09 AM)weijian Wrote: [ -> ]1) i think it is pretty obvious that there is limited growth prospects in the vehicular inspection biz at VICOM, no matter how many ways you look at the data.Statement 2)
2) This limited growth is offset by the Spore gov's explict grant of monopolisation - you wouldn't grow in exchange for stable cash flow generation..
3) I think if one wants to look for growth, they should focus on dissecting the non-vehicular part of the inspection biz, where the gov intervention is not so tight.
I find this to be a very bold statement. I did not not know that the Sg govt had actually made an explicit statement of intent to grant monopolisation to Vicom--- in exchange for stable cashflow generation.
This, if true is a gamechanger!!
Could you cite an official pronouncement from LTA or the Transport Ministry?
I was actually concerned that the monopoly is subject to the vagaries of policies ---- in other words this lack of certainty aka gift-nature, explains the lack of new entrants. Becos they think that if legislation for this is not iron clad, it is not a sustainable & durable core biz and hence for STA and for Vicom there is need and hurry to find alternatives such as the testing services biz.
Statement 1)
Ironically, for me, the "lure" for me to investigate and research the Vicom biz model , as a prelude to actual investment, was the high growth in operating margins which I traced to the high growth vehicle inspections which came from the high growth in the number of Cars on th roads in the last decade.
So I crunched the historical data to investigate the root cause for the growth in the vehicle inspections which vaildated my "feel' that the growth was due to the huge % increase in Car popn , in the past decade.
I had hoped that this trend will continue.
The 14/10/2011 LTA Press release was the stumbling block, that made me wonder about grwoth in future years.
Statement 3)
For the Testing Services biz, is it true that the testing services are not driven by legislation?
I know zero about this biz.
Perhaps, some others can throw some light.