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What Investors May Not Know About Singapore Post And Pos Malaysia – Part 1

There are lots in common between Singapore and Malaysia. Other than our food and culture, we share similar business activities.

In this article, we will look at the two postal companies that have been vital to their respective economies. But first, a quick introduction to the two companies:

Singapore Post Limited (SGX: S08) is a mail and logistics company in Singapore, organised into 3 major segments of Mail, Logistics, and Retail & eCommerce.

Pos Malaysia Bhd (KLSE: POS) is a Malaysia postal delivery service company listed on the Kuala Lumpur Stock Exchange. The company operates in three main segments – mail, courier and retail.

Given that both companies operate within the mail and logistics business, there should be many things in common between them.

Business segments:

Given that both companies are in the same business, we might expect to see some commonality in their business activities. The charts below illustrates the point.

1

Source SingPost 2016 Annual Report                               

2

Source Pos Malaysia 2016 Annual Report

As you can see, both have the same business segments. The slight difference is that Pos Malaysia uses the word “courier” as oppose to logistic in its courier segment.

Growing Logistics Businesses

With the growing importance of e-commerce, the logistic business is ever more critical for both companies. Both companies have been riding of this trend, which can be evident by the growing of the logistics/courier business segments.

For SingPost, logistic segment’s revenue grew by 34.7% in 2016 due to increase in e-commerce activities and acquisition.

As for Pos Malaysia, the courier department’s revenue grew by 16% in 2016. In the absence of acquisition, Pos Malaysia’s performance is noticeably “weaker”.

Consistent dividend payer:

For income investors, it is important that a company has a good history of continuous dividend payments.

Here, both companies have been consistent dividend payers for the last 5 years.

As price of S$1.47 and RM3.85, SingPost and Pos Malaysia are trading at yields of 4.7% and 3% respectively.

Conclusion:

Above are just three of the similarities between the two companies.

In part 2, we will look at the differences between the two companies.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.