Hidden Value in Singapore Post’s Asset Monetization

Maybank Research Pte Ltd, March 17, 2025

Singapore Post Ltd (SPOST SP): Maintain BUY with unchanged TP of SGD0.77

SingPost shareholders have approved the sale of Freight Management Holdings (FMH) to Australia’s Pacific Equity Partners for SGD867m in enterprise value. With all conditions met, the completion is expected by the end of March. Additionally, the sale of Famous Holdings could be sealed, and special dividends could be declared ahead of SingPost’s full-year results in May. SingPost plans to invest SGD30m to boost capacity at its Tampines logistics hub and intends to move all operations there from SingPost Centre (SPC), which is also up for sale or lease. The company believes asset monetization and returning value to shareholders remain the way forward.

Moving out of SPC creates significant potential

Management expects the eCommerce logistics hub in Tampines will consolidate all its operations under one roof and improve efficiency. By mid-2026, this will free up about 83,000 square feet of industrial space at SPC, opening up more leasing opportunities. If all operations are shifted there, about 376,000+ square feet of industrial space could be freed up, representing an estimated SGD 9m leasing opportunity annually based on SGD2 per square foot. SingPost could also potentially apply for a conversion of land use from industrial to office/retail, which would significantly lift SPC’s valuation, subject to regulatory approvals. Currently, out of SPC’s 1.47m square feet of GFA, 37% is classified as industrial, 45% as office, and the rest as retail.

New business model needed for mail business

Within its mail business, the postal network is expensive to maintain but serves only 20% of total mail volume. With growing digitalization of its services, post offices have become less relevant and financially unsustainable. SingPost is in talks with the government to come up with a new business model to address this issue.

Value lies in asset monetization

While SingPost’s international and Singapore businesses will continue to face challenges, the key focus remains the asset monetization angle with potential for special dividends.

Recommendation: BUY

The research report maintains a BUY recommendation on Singapore Post Ltd with an unchanged price target of SGD0.77, representing a potential upside of 39% from the current share price of SGD0.56.