RHB research said the February hike in commercial postal rate would provide Pos Malaysia with much-need operating cash lows to undertake its business transformation initiatives, which entail the expansion of its courier operations footprint and investments in digitalisation and automated systems.
"We are positive on these endeavours, given their necessity for the group to stay on top of e-commerce’s rapid expansion, while the digital migration would serve to unlock value in its superior distribution network nationwide and enhance its operating efficiency," said the research house.
It added that the Covid-19 outbreak has not materially impacted Pos Malaysia due to its businesses' scale and diversification.
RHB expects business as usual across the operating segments, barring any exacerbation of the pandemic.
The research house has a buy call on the stock with a target price of RM1.70.
To recap, Pos Malaysia incurred a wider-than-expected core net loss of RM97.5mil in 9MFY19 due to an isolated malware attack incident in the last quarter.
"This led to the loss of two months of parcel and bulk mail volumes – thereby resulting in a normalised courier segment loss of MYR4.6m," said RHB.
The postal operator also incurred a RM93.9mil impairment charge on its logistics and aviatio assets as well as a RM28.6mil provision in aircraft delivery costs.