Thursday, May 5, 2011

Singapore Post rated 'hold' by DBS

Stock Name: SingPost
Company Name: SINGAPORE POST LIMITED
Research House: DBS Vickers

DBS Vickers Securities in a May 3 research report says: "FY2011 net underlying profit of $149.6 million (+1% y-o-y) was in line with our expectations. Proposed final dividend per share (DPS) of 2.5 cents brings FY2011 DPS to 6.25 cents, same as last year.

"Group revenue was up 7.7% with logistics segment growing 14%, followed by 7.1% growth for mail and a stable retail segment. Expenses, however, grew faster at 10.8% y-o-y due to (i) higher traffic and labour costs and (ii) higher interest costs as Singpost raised $200 million debt in March 2010.

"Singpost would roll out a digital mail solution in 2H11 as an alternative option as physical mail is on the decline. Our target price of $1.17 is based on DDM. We maintain our FY2012F earnings estimates and assumed annual dividend growth of 2% in the long term. MAINTAIN HOLD."

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