Singapore Post - OCBC Investment 2016-10-28: IDA approval obtained for Alibaba’s 2nd tranche of investment

Singapore Post - OCBC Investment 2016-10-28: IDA approval obtained for Alibaba’s 2nd tranche of investment SINGAPORE POST LIMITED S08.SI

Singapore Post - IDA approval obtained for Alibaba’s 2nd tranche of investment

  • Singapore Post (SingPost) announced that it has completed the joint venture with Alibaba in which Alibaba has invested S$86.2m for new Quantium Solutions shares (SingPost’s logistics subsidiary) making up 34% of the company.
  • Regulatory approval from IDA has also been obtained for Alibaba’s second investment in SingPost (S$187.1m investment to increase Alibaba’s stake from 10.2% to 14.4%), and this is likely to be completed by 28 Feb 2017, in light of the timeline required to obtain the remaining approvals from SingPost’s shareholders at an EGM and from the SGX for the listing of the new shares. 
  • This is a positive development for SingPost, as one of the uncertainties for the stock is now put to rest, and this could result in a positive knee-jerk reaction on the share price.
  • Looking ahead, the group’s dividend policy is likely to be revised downwards, but more importantly time is still needed for integration and synergies for substantial earnings growth following the group’s earlier acquisitions.
  • Maintain HOLD over the longer term with S$1.42 fair value estimate.




Low Pei Han OCBC Investment | http://www.ocbcresearch.com/ 2016-10-28
OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 1.420 Same 1.420




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