Broker: Maybank Research Pte Ltd
Date of Report: May 6, 2025

Singapore Post Ltd: Special Dividends, Asset Monetisation, and a New Business Model in the Spotlight

Executive Summary: Major Dividends and Asset Sales Ahead for SingPost

Singapore Post Ltd (SingPost) is approaching a transformative period, highlighted by anticipated special dividends, significant asset monetisation, and a strategic pivot in its business model following the sale of its Australian operations. With the recent conclusion of Singapore’s election and the unwinding of QSI minority cross-shareholdings, SingPost is poised to reward shareholders – and potentially reshape its future direction.

Special Dividends and Asset Monetisation: Immediate Value for Shareholders

– SingPost is set to announce its FY25 results on 15 May, with expectations of special dividends following the sale of its Australia business and the QSI cross-holdings unwind, bringing cash inflows of SGD55.9 million. – At least SGD0.10 per share in special dividends is expected. – Additional asset sales, such as post office properties and the SingPost Centre, are likely post-election to further unlock shareholder value. – The ongoing sale of the freight-forwarding business is another source of potential proceeds.

Election Over: Asset Sale Acceleration and Postal Network Downsizing

– The end of Singapore’s election is expected to accelerate efforts to reduce the postal branch network, which currently serves only 20% of total mail volume but is expensive to maintain. – SingPost is likely to sell selected properties as part of this downsizing. – SingPost Centre, a key asset, is earmarked for sale to further unlock value. – The sale process for the freight-forwarding business is underway and will add to divestment proceeds.

Forging a New Business Model: Digitalisation and Leadership Transition

– The postal network’s high maintenance costs and declining relevance due to digitalisation have made traditional post offices financially unsustainable. – SingPost is in discussions with the government to develop a new business model that addresses these challenges. – With new directors joining, the search for a new Group CEO is ongoing; no new business investments or appointments have been finalized.

FY25 Outlook: Weak Core Results, but Strong Focus on Asset Monetisation

– FY25 results are expected to be weak, mainly due to international business challenges and high costs in the local postal network amid declining demand. – The primary value proposition in the near term lies in asset monetisation and dividends, rather than core earnings.

Financial Snapshot and Key Metrics

• Share Price: SGD 0.60 (as of report date)
• 12-month Target Price: SGD 0.77 (+28%)
• 52-week High/Low: SGD 0.62 / 0.42
• Market Capitalisation: SGD 1.3B
• Issued Shares: 2,250 million
• Major Shareholders: Singapore Telecommunications Ltd. (21.7%), Alibaba Group (14.4%), The Vanguard Group (2.3%)

Value Proposition and Price Drivers

– SingPost is the 4th-largest logistics player in Australia, with net assets estimated at SGD 0.90/share. – Profitability and dividends are projected to surge over the next few years, underpinned by asset sales. – Asset monetisation remains a core value unlock for shareholders. – The company stands to benefit from rising e-commerce volumes in Asia Pacific.

Financial and Operating Metrics

– Operating cash flow remains robust, supporting ongoing dividends and debt reduction. – Interest expense stands at approximately SGD49 million annually, but is expected to decrease as debt is pared down. – Free cash flow yield is projected to normalize after a dip in FY25 due to one-off items.

Risks and Swing Factors

Upside:

• Monetisation of assets at or above book value.
• Improved financial performance as the core business stabilizes.
• Increased dividend payouts in tandem with asset sales.
• Potential turnaround in the Singapore postal segment.

Downside:

• Lower consumer spending reducing postal and logistics volumes.
• High fixed interest expense.
• Assets sold below expected valuations.

ESG Analysis: Sustainability, Governance, and Social Responsibility

Environmental Initiatives:

• Targeting net-zero carbon emissions by 2030 in Singapore, 2050 globally.
• 37% of the delivery fleet converted to electric vehicles.
• Solar panels at SingPost Centre supply 3.7% of its energy needs.
• Major reductions in electricity use and carbon emissions between 2022 and 2023.
• Adoption of recycled packaging, climate risk assessments, and waste reduction programs.

Governance Highlights:

• Strengthened internal controls and due diligence following a high-profile fraud case in 2021.
• Enhanced employee credential verification and increased audit frequency.

Social Initiatives:

• Promotes gender diversity, achieving 49.1% female workforce, though only 36% in senior management.
• Volunteering programs and support for inclusivity, such as stamps with the Purple Parade.
• Commitment to fair employment practices and anti-discrimination hiring policies.

ESG Performance:

• Sustainalytics ESG score: 16.4 (47th out of 407 in sector)
• Overall ESG score: 51 (above average); qualitative score: 83; quantitative score: 28; target score: 67

Quantitative ESG Metrics

Comprehensive Financial Statements

Conclusion: SingPost’s Transformation Offers Compelling Value

SingPost is at a pivotal moment. While core earnings may remain subdued in the near term, the combination of special dividends, aggressive asset monetisation, and a reimagined business model promises substantial value creation for investors. The company’s proactive approach to ESG, strong cash flows, and commitment to unlocking asset value reinforces its status as a compelling play in the logistics and e-commerce sector.

Contact Information

For further insights, readers can contact the lead analyst, Jarick Seet at Maybank Research Pte Ltd.

Key Takeaways for Investors

• Special dividends and asset sales to drive near-term shareholder returns.
• Post-election environment accelerates transformation and network rationalisation.
• ESG leadership, especially in environmental initiatives and gender diversity, sets SingPost apart.
• Long-term value remains underpinned by strong assets and strategic flexibility.