Key drivers for Pos Malaysia include courier growth, e-commerce

KUALA LUMPUR: Pos Malaysia Bhd's results came in within Kenanga Research's expectations, due to stronger courier earnings and a new logistics segment. 

It upgraded the stock to market perform with a new target price of RM5.10, from RM4 previously.

"1H18 core net profit (CNP) of RM55.6m came in within our expectation, making up 46% of our full-year earnings forecast. 

"However, it fell short of market’s expectations at only 41% of consensus. We reckon the disparity between us and consensus may possibly be due to the over-optimism from the market towards courier volume growth," it said.

1H18 core net profit jumped 53% from RM36.2mil in 1H17, in line with its 48% revenue surge to RM1.2bil. Kenanga Research said the stronger results can be attributed to the inclusion of logistics and aviation segments as well as a slight improvement in the courier segment.

It said the main growth driver for Pos is argely expected to be from its growing courier volumes and expansive growth of e-commerce.  Pos is also one of the more direct beneficiaries of the Digital Free Trade Zone.