"The post office network continued to post an operating loss," says Lim, adding that higher postal rates have taken effect on Jan 1, including a 10 Singapore cent increase for regular domestic mail.
"While SingPost is not expecting a sharp, immediate decline in volumes as a direct result of the rate hike, this remains a tail risk given that key customers like financial institutions are also more digitally ready," she adds.
With the divestment of its key Australia business and other non-core assets, SingPost's management is confident about the company's balance sheet, and appears to be looking for avenues to drive both organic and inorganic growth.
Meanwhile, SingPost is still in talks with the industry regulator, the Infocomm Media Development Authority, to ensure the long-term sustainability of its postal network.
See also: Mixed sentiments on Genting Singapore
"We await further clarity on its next engine of growth," says Lim.
Following some "minor" adjustments to her forecast, Lim's fair value for the counter has been lowered to 40 cents.
SingPost shares changed hands at 39 cents as at 1.33 pm.
