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Pos Malaysia Bhd
Current Price: 1.95

Overview

Malaysia’s e-commerce industry is targeted to achieve an annual growth rate of 20% till 2020 from a 14.3% growth posted in 2017, via its various initiatives.
Deputy International Trade and Industry Minister Dr Ong Kian Ming said e-commerce registered a continuous increase for the period of seven years to RM85.8 billion in 2017. 
Pos Malaysia Berhad’s courier services segment has been experiencing double digit growths since 2014. As of 2017, Pos Malaysia commands about 40% of the courier market share (Theedge, 2017)  In 2018, the courier services segment revenue surpassed its core traditional postal delivery services segment revenue for the first time in history

Financials
Revenue has been experiencing double digit growths year on year since 2015 -2019 which signifies growth in the industry. However, margins have eroded due to higher operating expenses and cost of sales.

Financials should remain low key at the moment to compete against delivery services start-ups backed by venture capitalists / other competitors. This is important to maintain market share in the industry.

F.A Score 7/10




Technical Analysis
It has crossed above the sma of 50 and 20.
It is within the oversold region as it has dropped more than 64% within a year.
T.A Score 9/10









Featured Structured Warrant
POS- C33

Days till maturity – 261 days
Exercise ratio – 2.00

Exercise price -2.00
Assuming Pos rebounds back up to 3.00
Pos C33 should be worth 0.65 assuming a premium of 10% which is a 419.35% gain from current price of 0.155


Catalysts

1) Growth of E Commerce.  Pos Malaysia Bhd achieved a record breaking 4.42 million parcels from e-commerce purchases during the biggest online mega-sale on 11.11 (2018) and 1.91 million deliveries recorded as part of the “10.10” sale in October (2018). This may translate to higher earnings in its courier services segment for Q3 FYE 2019 that will be released by the end of Feb 2019. Malaysia’s Digital Free Trade Zone (DFTZ) is still at its start up phase and is expected to contribute positively to Pos from 2020 onwards.


2) Possible tariff rate hike. The postal tariffs were last raised in 2010 for its domestic segment. The Ministry of Communications and Multimedia (MCMC) controls postal tariffs. Al-Ishsal Ishak who was the ex-CEO of Pos Malaysia resigned to be new chairman of MCMC. Tariff talks have been rumoured since 2017.


3) Expansion of Integrated Parcel Centre (IPC 1) to sort up to 300,000 parcels per day (from 112,000). IPC 2, located near the Kuala Lumpur International Airport, is expected to be completed by August 2019. This centre will increase the group’s courier parcel sorting capacity up to 500,000 parcels per day.


Disclaimer
Trade at your own risk. This is not an investment recommendation. The author will not be responsible for any losses or decisions made.
 
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https://klse.i3investor.com/blogs/greentrade/193127.jsp

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