SingPost

SingPost: Reported FY11 & 4Q11 results which were broadly in-line with expectations. 4Q11 Rev at $141.5m, +5.7% YoY and -4.7% QoQ, while net profit at $37m, -9.6% YoY and -15.6% QoQ. Result brings FY11 rev to $565.8m, +7.7% YoY and Net Profit to $161m, -2.4% YoY. Excluding one-off items, FY11 core net profit was $149.6mn, +1.2% YoY…..

Overall, Mail rev formed 65% of total grp’s rev and +7.1% YoY driven largely by increased domestic mail traffic vol, the bulk of which stemmed from direct mail services, +15.7% YoY, while rental income increased 2.8% YoY on higher occupancy at 99.8% vs 97% in FY10. Margins however eroded on back of Logistics operating profit which fell 5.1% YoY despite strong top line growth, +14% YoY, as the lower margin transshipment featured more prominently …..

Grp has declared a final div of 2.5c/share, bringing FY11 div to 6.25c/share and translating to a 5.4% yield, flat from FY10. Going forward, grp will continue to stand firm on its core Mail business and recent increase of stake in GD Express Carrier to 27%, from 5% underscores commitment to regional expansion and business diversification…..

We note that grp’s balance sheet remains strong, with a cash position of $339m and low gearing of 50%, offering room for expansion/acquisition growth. At current price, grp appears fairly valued, at 14x FY12E P/E vs historical average of 14.3x, with a 5.4% div yield. Goldman Sachs maintains neutral call with $1.10 TP, while CS maintains neutral with $1.17 TP.