The mail segment recorded decent growth but the courier and retail segments were hit by higher staff costs.
Its 2013 core net earnings of RM144.9mil, while increasing 24.1% from last years, werestill below RHB's estimates, although its revenue was in line.
On a quarterly basis, the mail segment recorded a decent 63.7% year-on-year growth in gross profit, due mainly to higher contribution from Pos Malaysia's new product, direct mail.
However, its courier division reported a gross loss of RM200,000 despite a 5.3% year-on-year revenue growth.
"This cause us by surprise. the loss was mainly attributed to higher staff and transfer cost, which had surged by 40.6% and more than 100% respectively during the period. " Lee syas in a research note.
The retail segment (7.3% year-on-year) was also hit by higher operating costs. Which was partly due to the steeper start-up costs for the Ar-Rahnu (Islamic mortgage/pawning) outlets in the rural / suburban areas.
"Pegging our valuation to 15 time price-earnings, which is still about 15% discount tomits regional peer Singapore Post, we derive a higher fair valuation of RM5.20 and maintain a "buy", says the research house.
Group Cheif Executive Office Datuk Kahlid Abdol Rahman says he foresees opportunities in courier and logistics and plan to capitalise on the e-commerce boom in Malaysia that is seeing growth in online purchase.
Pos Malaysia Berhad has increased its international postage on 15 May 2013 to cover it RM200,000 loss cause by higher staff cost. E-commerce operator have wrote to The Star's letter to editor column to express their dissatisfaction. One even claim Pos Malaysia has kill the golder goose.
Netizen Wan Syazwan write on his facebook page claiming the rate is much higher than sending a parcel via USPS from US and via Royal Mail from UK.
Pos Malaysia Bhd has been downgraded to ‘hold’ at a higher target price of RM4.65 despite the fact that its 4Q13 core net profits came within expectations, said a report by Hong Leong Investment Bank (HLIB).
HLIB said that while the postal company surpassed the research outfit’s profits forecast for 2013 and met 95.5 percent of consensus estimates, the company was still facing many risks going forward.
A key factor affecting the company’s prospects is the fact that there has been a bigger than anticipated fall in mail volume and new products, and that services which have been introduced to stem the decline have failed to produce results.
The matter is compounded by Pos Malaysia’s struggle to raise postal tariffs in the face of criticism from customers.
Furthermore, the report highlighted that Pos Malaysia’s earnings are closely tied to the price of crude oil, meaning that the current high prices being seen are likely to have a negative impact on the company’s future earnings.
The national postal service also has to contend with the challenges that come with being in a highly regulated industry.
In-house too, the company is faced with the challenge of a tightening ship, especially with regards to its huge number of staff, said HLIB.
Pos Malaysia (POS (4634)). did some minor adjustment on 21 May 2013 after all the above complaint but E-commerce operator still claim it rate higher than Singapore Post and Hong Kong Post.
Further, Cyper Trooper from ruling party said E-commerce operator can used alternative UPS, Fedex, DHL etc. Failing to see the fact that Pos Malaysia has set up Post Laju to compete with UPS, Fedex and DHL and Pos Malaysia (POS (4634)). suppose to compare with Singpore Post, Hong Kong Post, USPS and Royal Mail. this made E-Commerce operator angry.
With the close proximity of Malaysia and Singapore. a large portion of parcel has been send via Singapore Post Limited (SGX: S08) . Just within few weeks, parcel from whole West Malaysia able to go through Singapore Post (SGX: S08) if the postage for that parcel higher than RM10.00 while people from East Malaysia still unable to enjoy such services. People from East Malaysia hope that Tony Fernandes able to setup AsiaAsiaCourier.com to route their parcel to Singpore or Hong Kong at a lower rate one day.
Singapore Post (SingPost) emerged as the top postal agency in the world, according to a study by global management consulting company Accenture.
It heads the list in the study “Achieving High Performance in the Postal Industry: Accenture Research and Insights 2013″, which covered postal agencies in 24 countries.
United Parcel Service (UPS) takes the second spot on the list, followed by Austria Post, Poste Italiane (Italy), Australia Post and FedEx (USA).
SingPost successfully diversified, with profitable new businesses that are vastly different from its traditional business to increase revenues. It launched new products, expanded its financial services offerings, and took advantage of maturing eCommerce trends, according to the study.
At a time when the majority of the world’s postal agencies are facing decline in global mail volume and rising employee pension costs, SingPost is thriving, Accenture said.
SingPost have also acquired portions of logistics companies to take advantage of cross-border delivery and found a way to provide a viable digital mail service, it added.
Singapore Post have a more condusive services for E-commerce operator. It has speed post, ezy2ship, vPost., which not available via Post Malaysia. even Royal mail in UK have Parcel force. Singapore Post (SGX: S08) original joint venture with Royal Mail and TNT(ticker: TNTE),Quantium Solutions have office in Malaysia, Thailand, Philippines.India, Taiwan, Hong Kong, Japan , Australia and New Zealand and should be protect by Competition act 2010 and Malaysia Competition Commision. further, it is those cyper Trooper that requested E-commerce operator to used alternative services like DHL, Fedex and UPS in the first place.
Other than, Singpore Post. TNT (ticker: TNTE) also appear benefited from the price hike base on the above fact. People from Northern Malaysia already used thailand Post since 2010.
While it is not sure the quantum of it benefit. The benefit is expected to grow over time.
As it impact on Post Malaysia (POS (4634)). . There is at least 4 category of E-commerce operator.
a) Close down business (Pos Malaysia has close the golden Goose.)
b) those still profit, despite lower and continue to used Pos Malaysia.
c) Those who used alternative services like Singapore Post
d) Those with parcel less than RM10 and more than RM10.00.
Usually, Ecommerce operator spend many years to build up their business, It is unlikely many will take a) above unless there is no alternative or tthey unable to make profit under the new rate.
Generally, Singpore Post would gain from C)
Post Malaysia might have higher margin from d) but there is no revenue growth.
Thus, Pos Malaysia able to gain only if B) is higher than a), c),d). As the rate increase can be up to 400%. . Post Malaysia can remain status-quo if there is equal partion of a), b),c)d). However, there is no guarantee that b) would move to c) unless postage rate for the parcel below RM10.00.
It is nearly half month of Jun 2013. It is interesting to see Post Malaysia Quarterly result ended Jun 2013.
Update : SingPost bags World Mail Award 2013
