Singpost (CIMB)

Sing Post: CIMB reckons SingPost’s strategic partnership with Alibaba opens doors via access to funds for larger-scale M&As and the opportunity to leverage on Alibaba’s customer base to scale up its regional e-commerce logistics operations. SingPost will benefit from tremendous business volumes originating from Alibaba’s e-commerce businesses, and the enlarged scale of the business will bring cost efficiencies, giving SingPost leverage over its competitors in a price-competitive ASEAN market. While SingPost guided that FY14 EPS would have been 10.4% lower with the equity issuance, CIMB thinks that the dilutive impact will only be in the near term (FY15), as the synergies created and growth from the new JV should outweigh the dilution from FY16 onwards. Latest broker ratings: CIMB maintains its Add rating and TP of $1.86 UOB Kay Hian maintains Buy with $1.73 TP