Pos Malaysia reported stellar earnings of RM30.3m for 2QFY13, up by 9.4% y-o-y and 16.6% YTD, in line our forecast but slightly above consensus. The revenue growth in its retail and courier segment continued to offset the drop in the mailing segment as overall revenue grew 5.6% YTD. Its new management’s focus on cost led to an overall improvement in EBITDA and PBT margins. We are maintaining our earnings projections and leaving our FV unchanged at RM4.14. The stockcontinues to be attractive at a PE of 9.7x on FY13 earnings and a net dividend yield of 6.8%. Maintain BUY.
Exceeding expectations. POS reported stellar earnings of RM30.3m for 2QFY13, up by 9.4% y-o-y and 16.6% YTD on the back of 2.7% y-o-y and 5.6% YTD revenue growth. However, q-o-q earnings dipped 2.1% as revenue fell 3.5% q-o-q during the seasonally slower quarter coinciding with the Hari Raya slowdown. As of 1HFY13, POS’ earnings are in line with our forecast of RM163m but slightly above consensus’ earnings forecast of RM137m as 2H is a typically stronger period for postal service providers. The group has declared a dividend of 6 sen per share.
Decline in mail offset by growing retail and courier business. The revenue growth of 5.6% YTD was attributed to better performance in the retail segment (y-o-y: 19.7%, q-o-q: 6.6%, YTD: 15%) as the number of postal transaction services provided at its postal offices continued to expand. Courier revenue also grew, offsetting the natural decline in mailing revenue.
New management focused on cost efficiency. The entry of a new management team has led to overall margin improvements, notably on the administrative side and the courier segment. This resulted in the overall expansion in 1HFY13 EBITDA and PBT margins by 2.9ppts and 3.1ppts y-o-y respectively.
Outlook still looking favorable. We continue to be optimistic on the company’s outlook as it diversifies its income base away from the declining mailing segment. The group’s retail portion is picking up as the range of transaction services provided at its outlets expands, while its efficiency in providing those services improves.
Maintain BUY. We maintain our earnings projections, and are leaving our FV unchanged at RM4.14, based on a sum-of-parts valuation which incorporates the value of POS’ land bank. Our FV implies a 13x PE multiple, which is at a discount to its peers’ average of 15x. POS is currently trading at an attractive PE of 9.7x on FY13 earnings, further enhanced by its net dividend yield of 6.8%. Maintain BUY.
Exceeding expectations. POS reported stellar earnings of RM30.3m for 2QFY13, up by 9.4% y-o-y and 16.6% YTD on the back of 2.7% y-o-y and 5.6% YTD revenue growth. However, q-o-q earnings dipped 2.1% as revenue fell 3.5% q-o-q during the seasonally slower quarter coinciding with the Hari Raya slowdown. As of 1HFY13, POS’ earnings are in line with our forecast of RM163m but slightly above consensus’ earnings forecast of RM137m as 2H is a typically stronger period for postal service providers. The group has declared a dividend of 6 sen per share.
Decline in mail offset by growing retail and courier business. The revenue growth of 5.6% YTD was attributed to better performance in the retail segment (y-o-y: 19.7%, q-o-q: 6.6%, YTD: 15%) as the number of postal transaction services provided at its postal offices continued to expand. Courier revenue also grew, offsetting the natural decline in mailing revenue.
New management focused on cost efficiency. The entry of a new management team has led to overall margin improvements, notably on the administrative side and the courier segment. This resulted in the overall expansion in 1HFY13 EBITDA and PBT margins by 2.9ppts and 3.1ppts y-o-y respectively.
Outlook still looking favorable. We continue to be optimistic on the company’s outlook as it diversifies its income base away from the declining mailing segment. The group’s retail portion is picking up as the range of transaction services provided at its outlets expands, while its efficiency in providing those services improves.
Maintain BUY. We maintain our earnings projections, and are leaving our FV unchanged at RM4.14, based on a sum-of-parts valuation which incorporates the value of POS’ land bank. Our FV implies a 13x PE multiple, which is at a discount to its peers’ average of 15x. POS is currently trading at an attractive PE of 9.7x on FY13 earnings, further enhanced by its net dividend yield of 6.8%. Maintain BUY.
Source: OSK
No comments:
Post a Comment