4 Key Points for Singapore Post Limited’s Outlook

Singapore Post Limited (SGX: S08) had hosted a presentation for its fiscal fourth-quarter earnings release recently. The logistics and mail services provider had covered a fair bit of ground in its earnings presentation, including those of its outlook.

Here are four key points to take away regarding the views of Singapore Post’s management on the company’s outlook:

  1. The acquisitions of TradeGlobal and Jagged Peak enabled Singapore Post to expand its eCommerce reach globally. The former is a US-based end-to-end eCommerce provider to premier fashion, beauty, and lifestyle brands. The latter is an eCommerce software and services provider for single channel, multi-channel, and omni-channel businesses.
  2. Traditional letter mail volumes are likely to come down while eCommerce-related volumes are going up. The nett effect is a shift in business mix that could lead to lower margins overall for Singapore Post.
  3. Ties with Chinese eCommerce giant Alibaba are expected to deepen. Singapore Post has entered into a joint venture agreement with Alibaba Investment Limited where the latter will acquire a 34% stake in the former’s subsidiary, Quantium Solutions. AliBaba is also expected to take up a new 5% stake in Singapore Post as well. Both agreements are expected to conclude by October this year.
  4. Last but not least, the redevelopment of SPC Retail Mall is expected to be completed by mid-2017. Meanwhile, the Regional eCommerce Logistics Hub is expected to be operational by July 2016.

At the moment, Singapore Post has not completed its search for a new Group Chief Executive Officer. The logistics provider has a new chairman at the helm in Simon Israel. Investors should be watching if Singapore Post is able to deliver on its promise to be a global eCommerce player.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.