RHB: Look at the long-term prospects

PETALING JAYA: Pos Malaysia Bhd is expected to post losses for this year due to disruptions in its services caused by the movement control order (MCO), according to RHB Research.

The research house said it has projected Pos Malaysia to record Rm64mil losses for the financial year 2020 (FY20), mainly due to extended Mco-led revenue loss.

Nonetheless, RHB suggested investors to look at Pos Malaysia’s long-term prospects stemming from its enhanced courier deliveries and digital services, which was spurred by the MCO.

“We raise FY21 and FY22 earnings forecast by 2% and 12, respectively, after factoring in higher expected courier volumes while partially offset by a quicker decline in mail volumes due to the underlying shift in industry trends,” it said in a report yesterday.

RHB said Pos Malaysia’ operations were affected during the MCO including over-thecounter postal and retail services, international shipments due to flight restrictions impacting and business closures for its end customers.

“We foresee negative earnings surprise in the first quarter, relative to street’s estimates, due to the revenue miss.

“We similarly expect second-quarter results to be weak, owing to the extended MCO period until mid-may, albeit partially offset by a 30% to 40% fall in fuel prices – transportation costs constitute about 25% of Pos Malaysia total cost base,” it said.

However, the MCO has seen a surge in demand for Pos Laju deliveries and a spike in the usage of the company’s digital services.

RHB said Pos Malaysia is well-positioned to capture greater market share due to its extensive network and sorting capacity.

Pos Malaysia closed 3.6% higher to 98 sen a share yesterday.

On a year to date basis, its share price has plunged almost 35%.