SingPost - Corporate restructuring may unlock further value

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By Gerald Wong, CFA • 12 May 2025

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Following a strategic review completed in March 2024, SingPost is executing a multi-pronged plan to unlock value.

SingPost
In this article

Integrated logistics player

Singapore Post (SingPost) is a fully integrated postal and logistics company with operations organised into three distinct units—Singapore, International, and Australia (divested in March 2025). 

In Singapore, it provides end-to-end services including warehousing, fulfilment, last-mile delivery, and derives recurring rental income from SingPost Centre. Its international business focuses on cross-border eCommerce logistics.

Singapore represents the bulk of operating profit following sale of Australia business
Source: Company data

Restructuring to unlock value and sharpen focus

Following a strategic review completed in March 2024, SingPost is executing a multi-pronged plan focused on forging strategic partnerships, monetising non-core assets, reducing debt, and returning capital to shareholders. 

The completed sale of its Australia operations for S$664.2 million and the upcoming divestment of its 4PX stake with estimated proceeds of S$55.9 million may lead to potential dividend upside.

singpost strategic review
Source: Company data

Further divestments may unlock more upside

The company is in discussions with IMDA to review its operating model, including rationalisation of its post office network. 

We estimate savings of about S$18 million a year if SingPost discontinue loss-making post offices. 

Further upside may come from the planned divestment of sea freight business Famous Holdings and unlocking value from its property portfolio, which currently contributes nearly half of group operating profit in FY 2024. 

Strong Singapore core with e-commerce growth momentum

Following the divestment of its Australian arm, SingPost’s Singapore operations now contribute 64% of group operating profit. 

In 1H FY2025, segment revenue rose 13% YoY, led by postal and logistics strength. SingPost is investing S$30 million to expand capacity at its Regional eCommerce Logistics Hub, positioning itself to ride the secular growth of e-commerce in Singapore.

Singapore reported revenue growth of 13% in FY 1H 2025 due to postal and logistics business
Source: Company data

Global business still challenging but refocused for profitability

International operations remain under pressure from weak volumes and intense competition, with logistics revenue falling 24.5% YoY in 1H FY2025. However, margins have held steady at 4.8% as SingPost pivots towards profitability. 

With 100% ownership of Quantium Solutions and a focus on scalable markets such as the Greater Bay Area, the company is doubling down on its core e-commerce logistics while preparing to exit legacy businesses.

International business remains challenged
Source: Company data

Initiate with Buy

We expect the successful execution of its restructuring initiatives will unlock further upside potential. 

Our target price of S$0.72 is derived from a sum-of-the-parts (SOTP) valuation, incorporating a 15% discount to reflect execution risks. 

Key risks to earnings are higher trade tariffs and protectionist measures that inhibit global trades and cross-border movements of goods. 

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