SingPost could review dividend policy after Alibaba deal

A 3.5-6.3 cents annual dividend is projected.

With the Alibaba deal almost completed, UOBKayHian expects market's attention to be on SingPost's dividend policy review.

"The review is currently underway to ensure sustainability as well as linking it to underlying earnings," it said.

A 3.5-6.3 cents annual dividend is projected.

With the Alibaba deal almost completed, UOBKayHian expects market's attention to be on SingPost's dividend policy review.

"The review is currently underway to ensure sustainability as well as linking it to underlying earnings," it said.

While SingPost maintained its absolute dividend in 1QFY17, the research house believes a payout based on underlying net profit would be beneficial to SingPost's transformation and integration journey as it allows sustainability and reinvestment on business for growth.

"Assuming an earnings-linked dividend policy, our sensitivity analysis indicates that a payout of 50-90% would indicate an annual dividend of 3.5-6.3 S cents, based on FY17F EPS of 7.0 cents," it said.