SingPost has seen better days, but prospects remain hopeful
SINGAPORE (Nov 8): UOB Kay Hian and OCBC Investment Research have both announced a &ldquo hold&rdquo recommendation on Singapore Post (SingPost) with a lower target price of $1.76 and a higher fair value of $1.47 respectively.
This comes after SingPost reported a 41% decline in 2Q17 earnings last Friday to $31 million. Additionally, as a result of its revised policy, the company declared a significantly lower interim dividend of 1 cent per share compared to 15 cents the year before.
(See also: SingPost&rsquo s 2Q earnings fall 41% fall to $31 mil declares 1 cent dividend with revised policy)
Thai Wei Ying, UOB&rsquo s lead analyst, explains that the research house has downgraded its rating on the stock after SingPost&rsquo s share price increased by 12% since its upgraded call to &ldquo buy&rdquo in October.
&ldquo While we remain positive on SingPost&rsquo s long-term prospects, the recent outperformance appears to have discounted recent positives, including Alibaba&rsquo s recent investments,&rdquo says Thai. The analyst anticipates continued margin pressure until operating leverage kicks in by FY18, as well as an annual dividend payout of 4.7-6 cents based on FY17-19 EPS.
Despite noting an increasingly competitive logistics space, UOB is hoping that SingPost&rsquo s collaboration with Alibaba will muscle its e-commerce logistics capabilities in the region and strengthen its network.
Meanwhile, OCBC has reiterated its &ldquo hold&rdquo call with expectations of expenses being driven up in the near-term as SingPost builds on its e-commerce logistics capabilities.
The research house&rsquo s lead analyst, Low Pei Han, says the new dividend policy based on a payout ratio ranging from 60-80% is &ldquo not a surprise&rdquo as SingTel&rsquo s dividend payout ratio, too, is 60-75% of underlying net profit. Low believes it will take time for SingPost to record productivity gains as it continues to build up scale.
&ldquo Margins in the logistics space are lower than mail, and competition in e-commerce logistics has also been increasing,&rdquo she adds.
Shares of SingPost closed unchanged at $1.54.
Better still, greetings.
baba share price up/down is baba strength. when 11.11 sales number come in then may have reactions.
singpost and qsi benefiting from baba sales is new. ie what they do not have before. baba 11.11.2015 sales was usd14.32b
But last night US there baba price drop leh....
11.11 single sale day. wonder how much alibaba can do this round.how much they can transfer their delivery from other vendors to qsi and singpost.
But last night US there baba price drop leh....
11.11 single sale day. wonder how much alibaba can do this round.how much they can transfer their delivery from other vendors to qsi and singpost.
11.11 single sale day. wonder how much alibaba can do this round.
how much they can transfer their delivery from other vendors to qsi and singpost.
market good --> confidence returns --> more spending --> eCommerce business booster --> SingPost benefits
is it the arrival of the super bull run ? DBS seems to show the way ......
wow ..... SGX also so solid today .....
hopefully a gap tomorrow
gradually but steadily ....
this morning managed to go into the 1.545 territory ..... higher high pattern gradually taking shape ..... likely ready for higher grounds .....immediate 1.59 ?
this morning managed to go into the 1.545 territory ..... higher high pattern gradually taking shape ..... likely ready for higher grounds .....
immediate 1.59 ?
S& P Rating
in good hands ..... guess Alibaba held companies will do particularly well .....
Total no. of shares approx 2164 million.Temasek holds 494 million (approx 22.8%)
Alibaba holds 220 million (approx 10.2%)
For Comparison with Singpost
Temasek holds 21.64% of M1
Keppel holds 19.5% of M1
SPH holds 13.28% of M1
Total no. of shares approx 2164 million.Temasek holds 494 million (approx 22.8%)
Alibaba holds 220 million (approx 10.2%)
Total no. of shares approx 2164 million.
Temasek holds 494 million (approx 22.8%)
Alibaba holds 220 million (approx 10.2%)
