Singapore Post

Singapore Post: OCBC maintains Hold with $1.23 TP. House note that since last report on Singapore Post (SingPost) on 6 May 2013, its share price rose about 8.5% to reach S$1.40 in mid May, but fell by an even greater amount (~10%) subsequently to its current price, which is a level that is supported by fundamentals. With increasing labour-related expenses and administrative expenses, operating costs of the group have been steadily increasing. Along with the changing profile of mail, the group is diversifying its businesses. Even during the midst of its transformation, SingPost is a good stock to hold in the current volatile environment. However, see limited upside potential unless earnings growth from its acquisitions proves to be better than expected.