[SINGAPORE] OCBC Investment Research and Maybank Securities analysts have downgraded their calls on local postal service provider Singapore Post (SingPost) to “hold”, mainly due to a lack of recent catalysts and justification of valuation.
Jarick Seet, analyst at Maybank Securities, said in his Sunday (Aug 24) report that most of the group’s asset monetisation has already taken place, and its next big asset, Singpost Centre, may not be sold.
“With a big portion of its non-core assets already monetised and management unlikely to sell SingPost Centre until a new strategy is in place, we believe the monetisation phase is likely over,” he wrote in the note.
Seet cut the rating on the stock from buy to hold, and lowered his target price on the counter to S$0.51 from S$0.63. He also cut his FY2026/FY2027E earnings on SingPost by 36 per cent and 35 per cent, respectively.
“SingPost’s local core business continues to endure a structural decline in volumes and margin pressure along with tight competition. Even with a potential rise in postal rates, we think it will be difficult for SingPost to generate the earnings needed to justify its valuations,” he said.
With a lack of catalysts in the monetisation of current non-core assets, the Maybank Securities analyst believes share price performance of SingPost may be muted.
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The national postal service provider divested its Australia business in March 2025 for an enterprise value of A$1.02 billion, or about S$897.6 million at the time.
“Given that its Australia business had been a significant growth driver for the company in recent years, we await further clarity on its next engine of growth, backed by a stronger balance sheet and greater financial flexibility,” wrote equity research analyst at OCBC Ada Lim in her Aug 22 note. She cut the target price on the counter to S$0.495 from S$0.59.
For SingPost’s first quarter results for FY2026, the group reported a 23.6 per cent year-on-year drop in revenue to S$162.3 million, while its operating profit sank 60 per cent to S$3.4 million from the same period a year before on lower volumes and intense competition.
Moreover, the company has undergone a board reset and is currently devising a new asset monetisation strategy after selling a big portion of its non-core assets and the divestment of its Australian operations.
The group is also looking for a new chief executive officer who will then be involved in charting its new strategy, a process which Seet from MayBank Securities expects will take at least three to six months. Over this period, the analyst believes SingPost’s net cash of S$378.5 million will remain intact.
“We get a sense that SingPost will no longer be pursuing any sizeable divestments, at least until the company’s strategy has been reset – in which case it would be challenging to justify the value of the company based on its earnings potential alone, in our view,” said OCBC’s Lim. She noted that no updates were provided on the timeline for a new strategy to be shared with the market.
