SingPost has announced details on its investigation and the rationale behind the decision to terminate three key executives. Management also reiterated its aim to be asset light and continue to monetise non-core assets, with the Australia business sale ongoing as Maybank IB said it had expected. It has also hired former CEO Neo Su Yin as COO to oversee the remaining business. The house said it expects the sale of Famous Holdings to conclude by end-Jan 2025 which should raise another SGD80-100m in proceeds. It also expects a significant special dividend to be distributed after both businesses are sold. Maintain BUY.

SGD400-450m of sales proceeds up for distribution
After paring down its Australia debt and coupled with the potential sale of Famous holdings, Maybank expects around SGD400-450m excess sales proceeds could be distributed as special dividends to shareholders. As of 30 Sepm2024, SingPost still holds about SGD428m of cash hence the house believes it will not need to keep so much cash from the sales proceeds on its balance sheet. This works out to be around SGD0.17-0.20/share for potential special dividends.

Sale, asset monetisation remain in place
The board confirmed that the list of assets and businesses that are noncore to its strategy will be monetised to recycle capital, while the sale of the Australia business is ongoing. Maybank expects more asset sales going forward like Famous Holdings, SingPost centre and its post offices Ignore the noise, focus on fundamentals

Despite the ongoing noise around SingPost, Maybank believes that the roadmap to return shareholder value remains unchanged which has been affirmed by the board and shareholders could potentially receive up to SGD0.86/share if all assets targeted are monetised. The house thinks the downside risk is now limited and maintains a conviction BUY on SingPost for its asset monetisation story. It also thinks investors should focus on the fundamentals and ignore the ongoing noise.