Pos Malaysia continues to struggle against growing competition

KUALA LUMPUR: Pos Malaysia Bhd's recovery prospects remain uncertain amid intense industry competition, as reflected by another loss-making quarter of operations.

The postal service provider reported a core net loss of RM43.5mil in 3QFY22, which brought 9MFY22 net loss to RM73.5mil.

According to Hong Leong Investment Bank (HLIB) Research, the results were below its and market expectations.

"Although PosM has plans to mitigate the impact of falling parcel volumes by improving overall parcel yield, and reducing transport costs via productivity improvements, we remain wary over its recovery prospects as the competition in last mile delivery space continue to remain intense, as evident by Nationwide Express’ recent announcement to gradually cease operations," it said in a research note.

HLIB added that the postal operator and other industry players are also engaging with the regulators in the hope of imposing a floor-pricing for the price per parcel to create a more level playing field for all courier service providers.

The research firm maintained its "hold" call on Pos while lowering. its target price to 60 sen per share from 61 sen previously

Kenanga Research in its own report also saw challenges in the growing competition from new players such as J&T Express and Ninja Van - companies that have been aggressively undercutting rates to grow their market shares.

It added that Pos' conventional mall business is struggling to stay relevant in the digital age while cost-cutting measures to counters its weakening core business revenue remain insufficient.

Kenanga maintained its "underperform" rating on Pos and slashed its target price to 49 sen from 55 sen previously.

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Pos Malaysia , courier , postal , Kenanga , HLIB


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