On SingPost’s first trading day post the release of its 3QFY17 results, the stock opened about 7% lower at S$1.365, but promptly recovered some losses, closing the day at S$1.405 or - 4.4% lower on heavy volume. We believe this was largely due to disappointing results, as well as the declaration of a lower interim dividend (YoY as well as QoQ in absolute per share terms).

We find this very similar to what happened post its 2QFY17 results – the stock then had closed 6.97% lower at S$1.535 on 7 Nov 2016 following the release of results on 4 Nov 2016 – and the reasons behind the share price movement were pretty much the same, in our view.

Looking back at 4 Nov 2016, there were 8 BUYs and 2 HOLDs on the stock but this has changed to 5 BUYs, 4 HOLDs and 1 SELL since then.

At current price level, SingPost has a forecasted ~2.8% dividend yield, which is probably acceptable for a company well-positioned to benefit from logistics and e-commerce growth, although time will be needed for an earnings boost.

Maintain HOLD with S$1.42 fair value estimate.

Source: OCBC Research - 14 Feb 2017