
Singapore Post: Alibaba to up investment in SingPost
- Alibaba invests in Quantium Solutions
- Also buys 5% more of SingPost
- Look forward to greater collaboration
Alibaba to invest up to S$92m in Quantium Solutions
- Singapore Post (SingPost) announced that Alibaba Group Holding will invest up to ~S$92m in Quantium Solutions International (QSI) for a 34% stake, with SingPost holding the remaining 66%.
- QSI is currently a wholly owned subsidiary of SingPost providing leading end-to-end ecommerce logistics and fulfilment services across the Asia Pacific region. Its network spans more than 10 countries and it offers e-commerce logistics solutions and warehousing across Asia Pacific.
- However, with the investment by Alibaba, it will become a JV and it will ramp up the development of e-commerce logistics infrastructure and services.
Will also purchase another 5% stake in SingPost
- At the same time, Alibaba will purchase 107.6m new shares amounting to a 5% stake in SingPost for S$187.1m such that its deemed interest on a fully diluted basis in SingPost will rise from 10.23% to 14.51%.
- The subscription price is S$1.74, which is at an 8% discount to Tuesday’s closing price.
- This acquisition of additional equity is subject to IDA and SingPost’s shareholder approvals.
Rationale for the moves
- According to SingPost, the initiatives will allow QSI to accelerate the build-up of ecommerce logistics infrastructure and services, and will also provide a platform for both parties to strengthen the collaboration and realize synergies.
- This includes ecommerce warehousing, last mile delivery and other end-to-end ecommerce solutions.
- A joint strategic business development framework has also been set up.
More details on collaboration with Alibaba
- When asked for more details, SingPost revealed that it will be the preferred partner for Alibaba’s foray in Indonesia and Brazil, as well as electronics products in Alibaba’s platform.
- Amongst the various initiatives they are pursuing, both parties are also looking to build warehouses in and outside of China.
- In SE Asia, though SingPost is not the only logistics partner with Alibaba, it aims to be a leading partner.
- Meanwhile we look forward to greater collaboration between SingPost and Alibaba for mutual benefit.
- Maintain BUY with S$2.19 fair value estimate on SingPost.
(Carmen Lee)
Source: http://www.ocbcresearch.com/
Source: http://www.ocbcresearch.com/