POS 18.8.2017

POS
18.8.2017

INCOME STATEMENT
Millions
Year T4Q
Revenues 2,278
PBT 135
PAT 90
No of shr (Dil) 783.3
EPS (Dil) 0.1115


PBT Marg 5.94%
NP Marg 3.95%

----------------------------------------------------

POS
18.8.2017

INCOME STATEMENT
Millions
Year …. 2017 …. 2016 …. 2015 …. 2014
Revenues …. 2,082 …. 1,717 …. 1,494 …. 1,427
GrProf …. 397 …. 249 …. 311 …. 339
EBIT …. 111 …. 64 …. 138 …. 203
Int Exp …. 9 …. 4 …. 2 …. 2
PBT …. 134 …. 95 …. 184 …. 226
PAT …. 84 …. 63 …. 127 …. 159
No of shr (Dil) …. 672 …. 537 …. 537 …. 537
EPS (Dil) …. 0.13 …. 0.12 …. 0.24 …. 0.30


GP Marg …. 19.07% …. 14.50% …. 20.82% …. 23.76%
PBT Marg …. 6.44% …. 5.53% …. 12.32% …. 15.84%
NP Marg …. 4.03% …. 3.67% …. 8.50% …. 11.14%
EBIT/Int …. 12.33 …. 16.00 …. 69.00 …. 101.50



BALANCE SHEET
Millions
Year …. 2017 …. 2016 …. 2015 …. 2014
CA …. 1,655 …. 1,168 …. 904 …. 882
NCA …. 1,710 …. 722 …. 797 …. 795
TA …. 3,365 …. 1,890 …. 1,701 …. 1,677

CL …. 1,235 …. 717 …. 512 …. 578
NCL …. 192 …. 57 …. 66 …. 65
TL …. 1,427 …. 774 …. 578 …. 643
Eq …. 1,939 …. 1,116 …. 1,123 …. 1,034
TL+Eq …. 3,365 …. 1,890 …. 1,701 …. 1,677



Cash …. 784 …. 723 …. 524 …. 557
ST Debt …. 224 …. 99 …. 49 …. 49
LT Debt …. 16 …. - …. - …. -
Total Debt …. 240 …. 99 …. 49 …. 49

Inventories …. 15 …. 11 …. 11 …. 14
AR …. 753 …. 413 …. 351 …. 292
AP …. 316 …. 270 …. 169 …. 145

CA-CL …. 420 …. 451 …. 392 …. 304

TD/Eq …. 12.4% …. 8.9% …. 4.4% …. 4.7%
TD/TA …. 7.1% …. 5.2% …. 2.9% …. 2.9%
TL/TA …. 42.4% …. 41.0% …. 34.0% …. 38.3%

CR …. 1.34 …. 1.63 …. 1.77 …. 1.53
QR …. 1.33 …. 1.61 …. 1.74 …. 1.50



CE …. 2,914 …. 1,896 …. 1,713 …. 1,656

Average of 2 years
CE (Avg) …. 2,405 …. 1,805 …. 1,685 …. 1,667
TA (Avg) …. 2,628 …. 1,796 …. 1,689 …. 1,659
Eq (Avg) …. 1,528 …. 1,120 …. 1,079 …. 991






CASH FLOW STATEMENT
(thousand)
Year …. 2017 …. 2016 …. 2015 …. 2014
Net Inc …. 131,379 …. 92,501 …. 181,311 …. 223,390
D&A …. 127,148 …. 102,762 …. 88,818 …. 81,346
FFO …. 205,081 …. 152,029 …. 205,536 …. 253,216
CWC …. 9,154 …. 105,702 …. (82,804) …. (131,772)
NetOCF …. 214,235 …. 257,731 …. 122,732 …. 121,444

Capex …. (120,706) …. (112,017) …. (104,472) …. (121,265)

FCF …. 93,529 …. 145,714 …. 18,260 …. 179
Dividends …. (62,832) …. (70,350) …. (38,130) …. (70,485)
RE …. 68,547 …. 22,151 …. 143,181 …. 152,905


NetOCF/Net Inc …. 163.1% …. 278.6% …. 67.7% …. 54.4%
FCF/Net Inc …. 71.2% …. 157.5% …. 10.1% …. 0.1%
Capex/Net Inc …. 91.9% …. 121.1% …. 57.6% …. 54.3%
Capex/NetOCF …. 56.3% …. 43.5% …. 85.1% …. 99.9%
DPO ratio …. 47.8% …. 76.1% …. 21.0% …. 31.6%
Capex/D&A …. 94.9% …. 109.0% …. 117.6% …. 149.1%



VALUATION
Year …. 2017 …. 2016 …. 2015 …. 2014
Share Price RM …. 4.58 …. 2.7 …. 5.29 …. 4.77
Market cap (m) …. 3077.8 …. 1449.9 …. 2840.7 …. 2561.5

ROCE …. 4.6% …. 3.5% …. 8.2% …. 12.2%
ROA …. 3.2% …. 3.5% …. 7.5% …. 9.6%
ROE …. 5.5% …. 5.6% …. 11.8% …. 16.0%

FCF/Revenues …. 4.5% …. 8.5% …. 1.2% …. 0.0%

FCF/Mkt Cap …. 3.0% …. 10.0% …. 0.6% …. 0.0%
DY …. 2.0% …. 4.9% …. 1.3% …. 2.8%




Today's Price RM …. 5.22
Shares (dil) .... 783.3
Market cap (m) today …. 4089.0

POS Holdings

Market Watch

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
23-Nov-11		31-Dec-11		3	30-Sep-11		292,623		27,102		5.05		-
23-Aug-11		31-Dec-11		2	30-Jun-11		286,854		21,574		4.02		-
24-May-11		31-Dec-11		1	31-Mar-11		304,509		38,260		7.12		-
28-Feb-11		31-Dec-10		4	31-Dec-10		277,333		6,084		1.13		-

Share Price Performance    High   Low Prices 1 Month 2.860   (28-Oct-11) 2.480   (24-Nov-11)   Prices 3 Months 3.050   (24-Aug-11) 2.220   (26-Sep-11) Prices 12 Months 3.740   (07-Apr-11) 2.220   (26-Sep-11) Volume 12 Months 109,885   (10-Mar-11) 93   (04-Aug-11)

Pos Malaysia divestment

Wednesday April 20, 2011

Pos Malaysia divestment



INVEST Malaysia has come and gone, and still there is no winner in the sale by Khazanah Nasional Bhd of its 32.2% stake in Pos Malaysia Bhd.

Perhaps that is apt, since the interests of minorities are very much in focus here, and the sellers need to carefully assess and address what might ultimately be not in line with the spirit of best practises.

Fact: Pos Malaysia's shareholding is highly fragmented about 23,800 shareholders, and ironically, majority owned by minorities.

We can see this from Pos' shareholding at the end of December, where there were 5,478 shareholders who owned a maximum of 100 shares in the postal company. This body of shareholders amounts to 23% of the total number.

A level higher, there are 8,443 shareholders who own between 100 and 1,000 shares, amounting to 35% of the total number of shareholders. And then there are another 8,531 shareholders who own a maximum of 10,000 shares in the company, also comprising about 35% of the total number of shareholders.

This would mean that 93% or a total of 22,452 retail minority shareholders of Pos Malaysia's may not enjoy the potential premium to the current price of RM3.51 as I write this article.

The rest of the shareholders are institutional funds such as the EPF, Socso and other unit trusts which will not enjoy this premium either.

(In a recent media release, Khazanah said it had shortlisted three and recently two bidders from five with offers ranging from RM3.38 to RM4.62 per share.)

Is this right? Should minorities be excluded from the potential upside on offer if the mandatory general offer (MGO) threshold of 33% is not breached?

This debate would be moot if the new owner is merely strategic. But as StarBiz rightly points out, Khazanah is asking bidders for their business plans for Pos Malaysia and rigorously vetting them. This suggests that the new owner could control the company with the 32.2% stake.

On the other hand, we also understand that Khazanah desires a “responsible exit” from Pos Malaysia as its services will impact all Malaysians thus the morally right thing for the seller to do whether control takes place or otherwise.

But the flipside is the possible exclusion of minorities from the premium potentially on offer that goes to only Khazanah because the sales falls short of the threshold level for an MGO by 0.8% .

Pos' book value per share stands at RM1.54 a share and it was reported initially that three shortlisted candidates were bidding between 2.2 times and 3 times, implying an offer range of RM3.38 to RM4.62 per share.

There are convincing arguments for minorities to be unhappy in such a situation where a new owner “slips in” without their consent or participation.

Firstly, there have been occasions in the past where minorities have not benefited from the exercise (such as Tan Sri Tajudin Ramli's 1994 acquisition of a 32% stake in Malaysia Airlines and Primus Pacific Partners' 2008 acquisition of a 20.2% block in EON Capital Bhd at a 55% premium).

Of course, the sellers might cite the possible upside from the stringent due diligence as a mitigating factor. After all, the reported final two shortlisted each bring their own niche expertise to the table, with one possibly looking to inject a bank via DRB, where, Khazanah the seller owns a substantial portion of it.

And Pos itself has been hard at work transforming itself. In June it announced a strategic alliance with UPS and jointly launched PosLaju International Premium, an international express delivery service serving over 215 countries.

And before that in January, Pos Malaysia and Maybank jointly launched a partnership to provide shared banking services at over 400 Pos Malaysia outlets around the country.

Is there a possible resolution to this? It depends.

Existing rules in the Takeover Code deem control as passing only when the 33% threshold has been breached and only then will there be a MGO for the remaining shares at the prevailing price by the offeror. It is essentially a numerical test, the same as in Britain, Hong Kong and Singapore, but the threshold levels are lower at 30%. The reasons cited is that determination of control is subjective.

The reality is that control in many cases can take place way below this threshold levels depending on the shareholding structure.

The more dispersed the shareholding, the easier to wrest control over the company as in this typical case of Pos.

Given the circumstances, it is important for the regulators to go beyond what is contained in the Takeover Code in certain cases, in assessing whether control has passed, and in assessing whether the rights and privileges of minorities might be compromised.

Pos Malaysia could be one such example?

Rita Benoy Bushon is chief executive officer of Minority Shareholder Watchdog Group.

POS Malaysia generates strong Free Cash Flow.

Have taken a brief look at POS.

1.  Cash rich company.  Cash RM 398.033 m, little debt.

2.  Net CFO is strong .. RM 198.451m

3.  Its FCF is strong ... net CFO 198.451 - capex 64.898 = RM 133.553m

4.  Market cap = RM 1670.2 m @ share price of RM 3.11 each.

5.  FCF/Market cap = 8% (very good).

6.  Dividend paid 50.346 m  DY = 50.346/1670.2 = 3%


It is no wonder that so many suitors are lining to acquire this stock from Khazanah.

Latest valuation based on closing price of 7.4.2011

Outstanding shares of POS = 537.03 million.

At the closing price of  MR 3.74 per share on 7.4.2011, its market cap = MR 2,008.5 million.

The FCF generated by POS in the last FY was MR 133.553 million.

Its FCF/Market Cap on 7.4.2011 = 6.65%.

Its Market Cap/FCF = 15 x

The successful company that acquire POS would have bought a company that is generating good net CFO and strong FCF.  

It is on the basis of this FCF that makes the valuation of POS seems reasonable for the moment.

Transformation on track for Pos Malaysia

Transformation on track for Pos Malaysia

Written by Financial Daily
Tuesday, 08 March 2011 11:12


Pos Malaysia Bhd
(March 7, RM3.05)

Maintain buy at RM3.08 with revised target price of RM4.12 (from RM4.45): Pos Malaysia’s analyst briefing was centred on the latest 4Q results and progress made on its transformation master plan, which highlighted the impact to volume following the postal tariff hike, measures to mitigate the impact of declining mail volume as well as its efforts to reduce operating costs through effective delivery beat management. All in, we gather that Pos’ transformation plan remains on track given that all its 2010 key performance indicators had been achieved.

While we expect mailing volume to continue to decline, the retail contribution from its tie-ups with banks will offset the overall impact. Revenue growth is projected to be on an uptrend as the company would see the full effects of the tariff hike in FY11.

Furthermore, we expect overall margins to continue to expand as the impact of the postage will offset the full year effect of the 2010 salary hike.

However, owing to spiralling costs on assumption of higher jet fuel and staff costs, we are trimming our earnings forecasts by 17.1% for FY11 and 13.3% for FY12.

The unveiling of its strategic partner is expected to be announced in the next one to two months as the deadline of March 15 for bidding draws near.

Potential relaxation of the use of its lands bank under the purview of the Postal Bill appears to be progressing well as the draft Bill will be tabled in Parliament this month. We expect the proposed amendments related to relaxation will go through as it would make more economic sense for the government to optimise the potential value of the landbank.

We maintain our “buy” recommendation on Pos, but have downgraded our target price to RM4.12 following the downward revision in earnings (from RM4.45).

We continue to value Pos on a sum-of-parts basis to capture the near-term earnings impact, where we apply a 14-time PER (from 13 times historical forward PE with inclusion of the strategic partnership catalyst premium), and the value of its five pieces of land not under the purview of the Postal Bill and its net cash. Maintain buy. — OSK Research, March 7


This article appeared in The Edge Financial Daily, March 8, 2011.

Pos Malaysia, Maybank partner to offer shared banking services

Pos Malaysia, Maybank partner to offer shared banking services
Written by Surin Murugiah of theedgemalaysia.com
Friday, 14 January 2011 19:16

KUALA LUMPUR: POS MALAYSIA BHD [] and MALAYAN BANKING BHD [] have teamed up to provide shared banking convenience for their customers at more than 400 Pos Malaysia outlets.

In the agreement signed on Friday, Jan 14, they said the alliance would enable the bank to provide banking services to more customers, especially the underserved segment, through the extensive network of Pos Malaysia’s outlets. The partnership would enable Maybank to especially reach the rural areas of Sabah and Sarawak.

Pos Malaysia group managing director and chief executive officer Datuk Syed Faisal Albar said Pos Malaysia was always looking for opportunities to expand the range of products and services offered at its post office counters such as the shared banking services with Maybank.

Maybank president & CEO Datuk Seri Abdul Wahid Omar said the collaboration reaffirmed Maybank’s market leadership and capabilities to offer services to all communities. This would also reinforce its corporate social responsibility and focus on supporting communities especially in the rural areas.

“It is about providing access to financial services and to improve quality of life of the community as well as contribute to the development of the people where we have our presence.

“The initiative is also in line with Maybank’s spirit in humanising financial services from the heart of Asean by providing easy access to financial service for the people, as well as providing them with a fair term and pricing and for us to be the heart of the community,” he added.

The three phase implementation programme will see selected Pos Malaysia outlets offer Maybank customers to undertake over the counter bank transactions such as cash deposit and withdrawal for savings account holders and loan repayments in the initial stage.

An automated teller machine would be provided at selected Pos Malaysia outlets to offer banking convenience beyond banking hours as well as additional services such as fund transfer, top-up of mobile credits or 'Touch 'n Go’ card.

"By end June 2011, Pos Malaysia services will expand to cover remittance service and opening of savings account," Abdul Wahid said.

A Brief Look at POS MALAYSIA BHD.

POS Malaysia BHD

Business Description:
Pos Malaysia Berhad (Pos Malaysia) is a Malaysia-based company engaged in the provision of postal and its related services, which include receiving and dispatching of postal articles, postal financials, dealing in philatelic products and sale of postage stamps. The Company operates in three segments:

1. Mail, which includes the provision of basic mail services for corporate and individual customers and customized solutions; 
2. Courier and logistic, which includes logistics and courier solutions by sea, air and land to both national and international destinations, and 
3. Retail, which includes over-the-counter services for payment of bills and certain financial products and services. 

Pos Malaysia operates its courier business through its two business units, namely PosLaju and PSH Express Sdn Bhd. The Company is also engaged in the business of Internet security products, solutions and services and rental income from investment properties.

Current Price (7/1/2011): 3.43
2009 Sales 902,561,000
Employees: 15,780
Market Cap: 1,841,999,180
Shares Outstanding: 537,026,000
Closely Held Shares: 269,900,099

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
29-Nov-10		31-Dec-10		3	30-Sep-10		227,441		31,301		5.83		-
24-Aug-10		31-Dec-10		2	30-Jun-10		229,122		28,101		5.23		-
31-May-10		31-Dec-10		1	31-Mar-10		231,079		1,625		0.30		-
25-Feb-10		31-Dec-09		4	31-Dec-09		224,581		16,499		2.78		-

Estimated EPS for 2011 =  2*(5.83 + 5.23) = 22.12 sen
At the price of 3.43, it is trading at a forward PE of = 3.43/0.2212 = 15.5 x

Historical 
5 Yr
PE range 12.8 - 18.9
DY range 4.6% - 3.0%

10 Yr
PE range 14.8 - 23.7
DY range 3.1% - 2.0%

Year      DPS     EPS
2003      1.9       7.8
2004      2.4       8.9
2005      3.6     21.3
2006      7.2     16.5
2007    10.8     20.0
2008    11.1     17.2
2009      7.5     13.3
9M10    0.0      11.36      NTA 1.5300

Capital Changes

2007   Capital Distribution of RM 1.50 per share

OSK maintains its ''buy'' call on Pos Malaysia, target price of RM4.33

Pos earnings forecasts revised upward
Published: 2010/12/08

OSK Research has revised upwards Pos Malaysia Bhd's earnings forecast by eight per cent for financial year 2010 (FY10) and two per cent for FY12 while keeping FY11's intact.

In a research note today, OSK said the revision was prompted by Pos Malaysia's better-than-expected volume for the first nine months of this financial year following postal rate increase.

"It recorded a decline of only 5.4 per cent as opposed to our full-year expectations of a fall of 10.7 per cent," it said.

OSK said Pos Malaysia Bhd's transformation plan remained intact though impact to earnings would be marginal for next year.

It said the excitement over the unlocking of Pos Malaysia's land bank value remained in place as the Postal Land Act was scheduled to be tabled in Parliament this month.

"We foresee the relaxation on land bank usage will go through as it would make economic sense for the government to maximise the potential value of these land bank scattered nationwide.

"Currently, the land bank (of over 600 outlets) is restricted to offering postal-related services," it said.

The research firm said the relaxation on the usage would act as a key catalyst for Pos Malaysia.

"This will unlock the value potential of its land bank noting that other national postal service providers overseas have already leveraged on their postal branches by combining other forms of commercial activities such as supermarkets, banks and restaurants," it said.

It said other possible amendment of the Postal Land Act could also see Pos Malaysia expanding its foray into franchising its post offices to boost entrepreneurial activities among its employees and the unemployed.

OSK said it would maintain its ''buy'' call on Pos Malaysia with unchanged target price of RM4.33. -- Bernama

Read more: Pos earnings forecasts revised upward http://www.btimes.com.my/Current_News/BTIMES/articles/20101208145455/Article/index_html#ixzz17VMcAILo

Pos Malaysia set for dream collaboration with global giants

Pos Malaysia set for dream collaboration with global giants
Tags: AmResearch Sdn Bhd | Brokers Call | Pos Malaysia Bhd

Written by Financial Daily
Wednesday, 23 June 2010 10:20

Pos Malaysia Bhd
(June 22, RM3.02)
Maintain buy at RM3.08 with a fair value of RM3.80: The Edge weekly in its report said that a total of 11 parties have expressed interest in picking up Khazanah Nasional Bhd’s RM563 million (at current prices) stake in Pos Malaysia, including two global express and courier players — DHL Express and TNT NV. Local players said to be eyeing the 32% equity interest include Nationwide Express Courier Services, Konsortium Logistik, the Employees Provident Fund (EPF), DRB-Hicom and Tune Group.

Our channel checks reveal that Khazanah had opened the initial stages of the bidding in May, with bidding parties teaming up — led by government-linked entities (GLEs). We believe Pos Malaysia’s existing GLE shareholders — Permodalan Nasional (8.5%), Skim Amanah Saham Bumiputera (8.2%), Valuecap (1.9%) and EPF (5.8%) — will lead a consortium, with select industry players, for Khazanah’s stake — much in line with its efforts to find “a fit and proper” Pos Malaysia.

Asia remains the growth driver even in times of crisis for international express providers. DHL’s Asia-Pacific operations saw a three-year CAGR of 8% (2005-2008), which contributed 25% (15% in FY05) of total FY09 revenue. TNT Asia-Pacific contributes 8% of total group revenue and has a 7% share of the Asia-Pacific express market.

Both companies are not fresh in expanding in Malaysia, however DHL’s 38% dominance in the Asia Pacific express market together with a leaner balance sheet will help Pos Malaysia better expand its courier and logistic segment. Last year, DHL Malaysia handled over 4.8 million global shipments while Pos Malaysia had only a meagre 1% share of overseas courier and logistic volume. Our view is that a strategic tie-up with DHL would give Pos Malaysia a boost internationally.



Furthermore, Malaysia’s inexpensive aircraft landing rights make it a potential regional hub for DHL’s Southeast Asian inbound cargo. For DHL, having a partner with enough bureaucratic leverage would be a priority, and a collaboration with Pos Malaysia would create land redistribution synergies. DHL would be able to pass its volume throughput to Pos Malaysia’s wide infrastructure network.

With current trade at six times FY11F PER and a conservative assumption of 40% payout (three-year average of 60%), Pos Malaysia represents an excellent opportunity to own a 6.3% yielding stock, backed by revenue growth potential from synergies with Khazanah’s preferred partner. This will be sweetened by the regazetting of usage on its RM200 million KL Sentral land. We maintain our buy rating with a fair value of RM3.80 per share. — AmResearch Sdn Bhd, June 22


This article appeared in The Edge Financial Daily, June 23, 2010.

HLG Research positive on Pos Malaysia's postal rate revision

KUALA LUMPUR: HLG Research is positive on POS MALAYSIA BHD []'s announcement that it would increase its domestic postal rates for standard mails, effective 1 July, for the first time in 18 years.

The research house said the rate revision would enhance the value of Pos and returns of seller Khazanah; and that the new rates will arrest the declining margins and declining postal volume.

HLG Research also views Pos Malaysia's partnership agreement with Green Packet's subsidiary P1, whereby P1 subscribers are able to pay, top up or register a new account via its 1,047 outlets nationwide.

Previously, P1 users are only able to pay their bills via PosOnline.

"We are positive on the developments as a sign that the company is actively diversifying their services beyond the traditional postal services to seek new revenue growth.

"Pos Malaysia is currently trading at FY11 P/E of 17 times and P/B of 1.3 times," it said.

Pos Malaysia added 14 sen to RM3 at 10am Wednesday, April 7 and was among the most actively traded stocks with 4.64 million shares done


http://www.theedgemalaysia.com/business-news/163310-hlg-research-positive-on-pos-malaysias-postal-rate-revision.html

Also read:
A quick look at POS 2009

POS Malaysia recommends 12.5c per share dividend

POS Malaysia recommends 12.5c per share dividend
Written by Joseph Chin
Wednesday, 31 March 2010 18:16

KUALA LUMPUR: POS MALAYSIA BHD [] has recommended a first and final dividend of 12.5 sen per ordinary share less tax.

It said on Wednesday, March 31 the dividend was subject to shareholders' approval at its forthcoming AGM.

"The entitlement date and payment date in respect of the proposed first and final dividend will be determined and announced in due course," it said.

Khazanah Nasional Bhd has proposed to divest its 32% stake in POS Malaysia under the New Economic Model.

AmResearch, had in its morning outlook report, said it was maintaining a Hold on Pos Malaysia with an unchanged fair value of RM2.30 a share.

"Khazanah's entry price into Pos Malaysia has been kept sketchy, with bulk of the deals done off-market," it said.

The research house said Pos Malaysia was expecting its new Mail Processing Hub (MPC) to be up in 4Q10. More importantly, it felt the MPC will now allow Pos Malaysia to position itself as a mail outsourcing distribution centre for the Asia-Pacific region.

"Pos Malaysia's well-due tariff review will certainly be hastened in order to tempt takers for Khazanah's shares in the company. A 10 sen (+20%) hike will swell Pos Malaysia 's FY11F's EPS by 61%. Pos Malaysia is currently trading at a slight 2% discount to DCF valuation of RM2.30/share.

"While there is meagre room for upside at this point - possibilities of a more meaningful upside could emerge should its plan to expand its presence regionally, in hand with the tariff hike, materialise," it said.

http://www.theedgemalaysia.com/business-news/162814-pos-malaysia-recommends-125c-per-share-dividend.html

"While there is meagre room for upside at this point - possibilities of a more meaningful upside could emerge should its plan to expand its presence regionally, in hand with the tariff hike, materialise," it said.