SingPost

SingPost: To offset the growth and margin drag from the decline in traditional mail volumes in Singapore (67% of Group revenues), Singpost has embarked on a strategic initiative to change the mix of its business, driven by better growth in logistics (38% of revenues) and retail (11% of revenues) customer segments. Singpost is focussed on the regional logistics business to lead the next leg of growth. Rapid growth in inbound e-commerce volumes into Asia provides a big opportunity for Singpost’s e-commerce fulfilment arm Quantium Solutions. Singpost is also building capacity and competencies in international logistics in the region. With its strategic revamp underway, management targets to improve both margins (higher share of non-mail business) and growth prospects (overseas and non-mail) medium term. Singpost is also open to inorganic opportunities to increase scale and competencies in the logistics business. Singpost currently trades at 15.7x FY14 consensus P/E and offers a 5% dividend yield.