MCMC's moratorium 'mildly positive' for Pos

KUALA LUMPUR: The Malaysian Communication and Multimedia Commission's (MCMC) two-year moratorium on the issuance of new courier service licences is mildly positive for existing courier service players, including Pos Malaysia, says AmInvestment Bank research.

The research house has a "hold" recommendation on Pos Malaysia and a fair value of 90 sen per share based on its historical price-to-book of 0.51x

It said the MCMC's move will stop the entry of new players although aspiring players could still gain entry via the acquisition of existing players.

"Meanwhile, in the absence of a major consolidation, the playing field remains crowded with 109 courier service licensees in Malaysia," it added.

AmInvestment noted that new norms such as accelerated digitalisation, social distancing and the proliferation of online shopping due to the Covid-19 pandemic are positive to the parcel delivery segment.

However, this is offset by the crowded playing field and cut-throat competition, which results in razor-thin margins.

"Also, postal service providers around the global, Pos Malaysia included, are fighting a losing battle in the dying snail mail business. In order to survive, they need to cut cost and reinvent.

"We believe Pos Malaysia’s hands are tied given its unionised workforce," it said.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

Did you find this article insightful?


Next In Business News

TDM says CEO Zainal Abidin resigned over disagreement with chairman�
Petronas posts RM3.4bil net loss in Q3
Boustead appoints former Telekom boss Shazalli Ramly as new Group MD
Public Bank 3Q net profit higher at RM1.39b
CIMB's 3Q pre-tax profit improves sequentially on higher operating income
Kenanga IB profit up tenfold as brokerage, trading income soar
Palm oil’s stunning rally is set to boost supermarket prices
Alliance Bank posts lower 2Q net profit of RM103.94m on higher reserves
Pandemic and travel curbs hit Datasonic Q2 earnings�
Higher net profit for Hong Leong Bank

Stories You'll Enjoy