Maybank Securities analyst Jarick Seet has maintained his positive view on SingPost following news of the firing of its three top executives including the CEO Vincent Phang and CFO Vincent Yik over mishandling of whistle-blowing investigations.
A third executive, Li Yu, who heads up the company's international operations, was fired as well. Phang and Yik plan to "vigorously contest" their termination.
The sacking of these three executives took place while SingPost is in the midst of its asset monetisation moves, including most recently, the proposed sale of its Australian unit FMH for an enterprise value of A$1.02 billion.
The proposed sale, according to Seet in his Dec 23 note, is part of a list of non-core assets that SingPost plans to monetise as part of its strategic review, so as to recycle its capital and enhance shareholders' returns.
Proceeds from the sale of FMH will be used to pay down debt and may also be released back to shareholders in the form of special dividends.
Seet expects SingPost to undertake further asset sales, including SingPost Centre and various post offices and potentially return up to 86 cents per share in dividends in the next two years.
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"Despite the termination of key management, we believe that the roadmap to return shareholder value remains unchanged as it is board-driven," says Seet.
"We think the downside risk is now limited and maintain a conviction 'buy' on SingPost for its asset monetisation story," says Seet, who has kept his 77 cents target price on the counter.
Seet's positive stance is in contrast to OCBC Investment Research's Ada Lim, who trimmed her fair value for SingPost from 58 cents to 54 cents, to take into account higher equity risk premium assumption.
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SingPost shares traded at 51 cents as at 9.58 am, up 1% thus far today, recovering slightly following the drop of more than 10% on Dec 23 after news of the firings were out.
