Dividend policy revision sends SingPost share price plummeting

It has dropped 12% since the release of Q2 results.

The investors were not happy with the way Singapore Post is handling itself right now. After it posted a 41.2% slump in net profit to $31.4m, share price went down at about 12% and underperformed the index by a significant margin.

According to OCBC Investment Research Low Pei Han, more than the profit drop, the decline in share prices was due to the revision in the divident policy.

"As mentioned in our earlier reports, as SingPost builds up its eCommerce logistics capabilities, investments will be required, driving up expenses in the near term," Low mentioned.

To recall, it was reported that the group eyes 3.5-6.3 cents annual dividend after its deal with Alibaba.

"Time will also be required for productivity gains as SingPost builds up scale. Margins in the logistics space are lower than mail, and competition in eCommerce logistics has also been increasing," the analyst noted.