Singapore Post Limited, or SingPost (SG:S08), is the official postal service provider in Singapore, responsible for the delivery of mail, parcels, and express postal items. The company is currently under pressure from falling share prices, lower profits, and declining mail volumes.
During the past five years, the company’s stock has experienced a 60% decline in value, with a 30% decrease occurring in the last year alone.
What Lies Ahead?
Despite having a strong presence in Singapore’s postal industry, the company’s revenues have been impacted by structural shifts. Nonetheless, investors are looking forward to the company’s endeavor to shift towards logistics and expand into overseas markets.
SingPost reported that its transformation strategy is generating positive outcomes. The growing contributions from the Australian business segment have helped offset the weaknesses observed in the core post and parcel business. In January 2023, the company also increased its investment in the FMH Group in Australia by acquiring a majority stake of 51%.
SingPost Financial Results
In May, the company reported its earnings for the fiscal year 2023. The company’s revenues grew by 12.4% to S$1.87 billion. However, operating profits were down by 17% due to higher costs. The net profit for the year declined by a huge 70.3% to S$24.7 million as compared to the previous year.
The Post & Parcel division of the company reported a full-year operating loss of S$15.9 million for the first time, which contributed to the overall weak performance of the company.
Is SingPost a Good Stock to Buy?
S08 stock has a Hold rating on TipRanks based on two Hold recommendations. The average target price is S$0.50, which is 8.4% higher than the current price.
SingPost is in the process of turning around its operations, which is expected to result in a gradual recovery over the next few quarters.
Investors will have to wait a little longer in order to see a rebound in the share price.