Singapore Post’s (SPOST) share price rose ~8% MTD in April as investors viewed it as a potential restructuring play following Singapore Press Holdings and CapitaLand Limited’s strategic review and proposed restructuring. We are currently not aware of any material change in SPOST’s operations and guidance.

We note that SPOST had undertaken a series of restructuring exercises to step up its transformation and growth in the digital age in recent years. However, we believe more time is needed for SPOST’s initiatives to bear fruit.

SPOST is likely to continue to face headwinds from declining volumes of letters and printed papers in Singapore, and higher conveyance costs for its international post and parcel business.

On the other hand, we expect SPOST to continue its efforts to strengthen its e-commerce logistics capabilities which contributed ~65% of revenue in 1HFY21. After adjustments, our fair value estimate increases from SGD0.71 to SGD0.74.

Source: OCBC Research - 15 Apr 2021