Singapore Post upgraded to 'buy' from 'hold' on attractive valuation
Kim Eng Securities has upgraded Singapore Post Ltd (SingPost) to “buy” from “hold” in light of the stock’s attractive valuation compared to its target price of 1.38 Singapore dollars a share.
“The stock looks attractive now following the share price correction in the past two weeks,” Kim Eng said in a client note Thursday.
“Furthermore, SingPost provides a safe harbor amid a volatile market, given its quarterly dividend payouts and its attractive policy of paying out 80-90 percent of earnings (or a minimum of 5 cents/share),” it said.
The brokerage expects SingPost’s year to March 2008 net profit to grow to 150.9 million Singapore dollars from a projected 139.7 million dollars this year.
Kim Eng said the postal operator’s growth initiatives overshadow the threat from potential local competitors as Singapore liberalizes its postal services.
SingPost said last month it will continue to grow its core businesses of mail and logistics locally, and extend its regional reach.
At the end of the morning session, SingPost was up 1 cent or 0.9 percent at 1.13 dollars, with 1.9 million shares traded.
(1 US dollar = 1.45 Singapore dollars)
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