Monday, 8 May 2017

(NST) Lazada partnership a 'major positive' for Pos Malaysia: HLIB Research

KUALA LUMPUR: HLIB Research has issued a ‘hold’ call on Pos Malaysia Bhd, with a raised target price of RM6.08, following the company's Memorandum of Collaboration with Lazada Malaysia, which is wholly-owned by the Alibaba Group.

Under the agreement, the two parties will collaborate and develop an e-Commerce Regional Distribution Centre (e-RDC) to be sited at the former low-cost carrier terminal (LCCT) in Sepang, Selangor.

"This is a big positive for Pos Malaysia, as Lazada is the biggest e-commerce marketplace player in the Asean region. The successful execution of this collaboration will propel strong growth for the group’s courier, transhipment, logistics (KLAS) and warehousing divisions in the long-term.

"Investment in infrastructure of the warehouse at LCCT will be borne by Pos Malaysia, amounting to RM60 million, while Lazada will (provide) support with its e-commerce expertise, handling of items and training," HLIB Research said in its report.

Renovation works on the former LCCT site are expected to start soon, and operations are scheduled to commence on Aug 31, with positive earnings impact being realised earliest in FY19, HLIB Research added.