FY14 PE (x): 23.0
FY15F PE (x): 24.1
Hot on the tail of our e-commerce piece, Alibaba puts a stamp of approval on SingPost’s initiatives with a proposed investment and collaboration for an ecommerce logistics platform in Southeast Asia. This will accelerate SingPost’s growth and offset the potential dilution. We see more upside to S$2.00 assuming 30-50% e-commerce contribution to the bottom-line in FY17. Maintain BUY. Target price: S$1.73.
Maintain BUY and target price of S$1.73, based on a 3-stage DCF model. The implied FY16F PE is 24x. While we may see some light profit-taking in reaction to the discount on Alibaba’s subscription price and a potential dilution, we take a medium- to longer term view on the stock and remain buyers. As more traditional postal operators venture into ecommerce logistics, we think the valuation gap with e-commerce-related players will narrow.
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