Stock Name: POS
Company Name: POS MALAYSIA BHD
Research House: INTER PACIFIC
Pos Malaysia Bhd
(June 1, RM2.62)
Reiterate outperform at RM2.67 with target price of RM3.28: The target price is based on FY10 EPS (earnings per share) of 23.4 sen and PER (price-earnings ratio) of 14 times. We expect Pos Malaysia's both top and botton line to benefit from the tariff hike which will come into effect from July 1.
Pos Malaysia's 1QFY10 revenue of RM231.08 million was lower than our forecast accounting for 21.5% of our FY10 projection. We expect its revenue to pick up in 2HFY10 benefiting from the tariff hike which is expected to raise its revenue by about 40%-50%.
1QFY10 revenue rose by 2.9% quarter-on-quarter (q-o-q) benefiting from all its business segments with the exception of its courier and logistic posted a negative growth of 0.8% q-o-q.
Retail business revenue was up 18.6% q-o-q to RM38.7 million which could be attributed to the refurbishment of post offices as well as the management's increasing concentration to develop this segment.
Pos Malaysia's profit margin fell due to higher expenses ' 1QFY10 operating profit fell by 14% year-on-year (y-o-y) to RM23.1 million in view of higher expenses, which were up 1.9% y-o-y to RM208 million following an increase in maintenance and supplies costs, transportation cost as well as promotional expenses.
Revenue, which gained by 0.1% y-o-y, failed to yield any major impact. Thus, the postal services provider's operating profit margin fell by 1.6 percentage points y-o-y to 10%.
Pos Malaysia's 1QFY10 profit before tax (PBT) fell by 69.8% y-o-y and 67.1% q-o-q to RM9.4 million due to impairment losses provided for non-current investments of RM19.4 million. Excluding all impairment charges, its 1QFY10 PBT would have contracted by 10.6% y-o-y, while on a quarterly basis, it rose 8.1%.
With Transmile's turnaround plan still unclear, this could put a lid on Pos Malaysia's interest into Transmile for its future growth plan. ' Inter-Pacific Research, June 1 ''
This article appeared in The Edge Financial Daily, June 2, 2010.
Company Name: POS MALAYSIA BHD
Research House: INTER PACIFIC
Pos Malaysia Bhd
(June 1, RM2.62)
Reiterate outperform at RM2.67 with target price of RM3.28: The target price is based on FY10 EPS (earnings per share) of 23.4 sen and PER (price-earnings ratio) of 14 times. We expect Pos Malaysia's both top and botton line to benefit from the tariff hike which will come into effect from July 1.
Pos Malaysia's 1QFY10 revenue of RM231.08 million was lower than our forecast accounting for 21.5% of our FY10 projection. We expect its revenue to pick up in 2HFY10 benefiting from the tariff hike which is expected to raise its revenue by about 40%-50%.
1QFY10 revenue rose by 2.9% quarter-on-quarter (q-o-q) benefiting from all its business segments with the exception of its courier and logistic posted a negative growth of 0.8% q-o-q.
Retail business revenue was up 18.6% q-o-q to RM38.7 million which could be attributed to the refurbishment of post offices as well as the management's increasing concentration to develop this segment.
Pos Malaysia's profit margin fell due to higher expenses ' 1QFY10 operating profit fell by 14% year-on-year (y-o-y) to RM23.1 million in view of higher expenses, which were up 1.9% y-o-y to RM208 million following an increase in maintenance and supplies costs, transportation cost as well as promotional expenses.
Revenue, which gained by 0.1% y-o-y, failed to yield any major impact. Thus, the postal services provider's operating profit margin fell by 1.6 percentage points y-o-y to 10%.
Pos Malaysia's 1QFY10 profit before tax (PBT) fell by 69.8% y-o-y and 67.1% q-o-q to RM9.4 million due to impairment losses provided for non-current investments of RM19.4 million. Excluding all impairment charges, its 1QFY10 PBT would have contracted by 10.6% y-o-y, while on a quarterly basis, it rose 8.1%.
With Transmile's turnaround plan still unclear, this could put a lid on Pos Malaysia's interest into Transmile for its future growth plan. ' Inter-Pacific Research, June 1 ''
This article appeared in The Edge Financial Daily, June 2, 2010.
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