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.
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