SingPost: Deutsche initiating with Buy and TP of $1.85
-Net profit to grow at 20% CAGR FY17-19; FY19 NP forecast is 14% above consensus
- bolstered by widening margins of its logistics and e-commerce businesses that could be driven by:
a)increasing scale of e-commerce business
b)deeper horizontal integration between various regional logistics units
c) closer collaboration between logistics & e-commerce business
-meanwhile, average revenue growth for next three years is expected to be 20% p.a. underpin by
1)rising logistics and e-commerce flows between US & Asia Pac
2)Alibaba’s upcoming increase in stake from 10.3% to 14.5%, despite 4 delays
3)penetration into new markets, eg: FMCG e-commerce
-Recent concerns about leadership changes should be viewed positively, amid appointment of strong chairman, and departure of legacy management.
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