Singapore Post (SingPost) has partnered Airbus Helicopters for the Skyways drone delivery project, due to begin trials at the National University of Singapore by early 2018. The MOU follows up on an initial agreement with the Civil Aviation Authority of Singapore, and the initial trial will involve the transport of small packages within NUS, but that could lead to follow-up projects such as shore-to-ship parcel deliveries via drones.

SingPost will bring its expertise in software systems that control and manage delivery networks, customer-interface systems and real-time back-end links to a delivery system that serves the last mile. SingPost will also contribute its understanding of postal and eCommerce logistics trends to ensure the solutions developed will address the future logistics needs of cities around the world.

We are positive on this development over the longer term as SingPost builds on its logistics capabilities, but time will still be needed to see the fruits of its labour. Maintain HOLD with S$1.39 fair value estimate.

Source: OCBC Research - 20 Apr 2017