SINGAPORE (June 22): Supply chain disruption has seen Singpost suffer from an international postal backlog as borders remain closed as a result of Covid-19. Yet with the upcoming General Election in Singapore promising a surge in postage, UOB Kay Hian analyst Lucas Teng has maintained his “hold” call on the counter with a target price of 80 cents, representing a 2.6% upside on the stock

According to the Universal Postal Union (UPU), cross-border mail (including letters, parcel and express) experienced a 21% y-o-y decline between 23 January and 14 May due to disrupted flights. An unhindered supply of mail -- for instance, through flight resumption -- and continued reliance on international goods is necessary for international mail volumes to recover to pre-Covid levels. While mail disruption continues to be a challenge for Singpost, adequate mail flow from China has been crucial in maintaining stable demand. 

Singpost’s focus on developing its e-commerce presence could pay off following growing demand for online purchases in Singapore. Online proportion of sales for computer and telecommunication equipment in Singapore rose to 70% in April from 41% in March, while online share of sales for furniture and household equipment rose to 50% from 17% in March. 

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