Singpost’s tie-up for e-commerce buying platform is a positive: DBS

Singpost Centre at Paya Lebar MRT in SingaporeSingpost Centre at Paya Lebar MRT in Singapore in March 2018

Singapore Post’s tie up with e-commerce retail and distribution player Y Ventures last week is positive, potentially leading to new opportunities for the postal company’s existing businesses, DBS said in a note earlier this week.

Singpost inked a non-binding memorandum of understanding (MOU) with Y Ventures last week to collaborate on an e-commerce buying platform, focused on cross-border purchases for consumers, and consolidated deliveries, the note said. It will also focus on logistics-related technology to enhance efficiency, the note said.

The e-commerce buying platform is “somewhat a natural extension of Singpost’s existing business, as [it] already has existing logistics network and investments in hardware,” while “logistics-related technology can potentially help improve Singpost’s existing operations,” DBS analyst Sachin Mittal said in the note..

DBS maintained a Buy call on Singpost, with a 12-month price target of S$1.61. DBS said it hadn’t incorporated the deal into its forecasts yet as the two companies are still hammering out the details of the partnership.

The stock was trading at S$1.36 at 12:20 P.M. SGT on Friday.

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