SINGAPORE (May 19): On May 17, Singapore Post announced a deal with Southeast Asia’s largest online shopping platform Lazada Group.

Lazada Singapore has moved its warehouse operations to the SingPost Regional eCommerce Logistics Hub in Tampines to boost efficiency and turnaround time. The partnership may be just what the 198-year-old postal services company needs to court disillusioned shareholders.

(See also: Lazada Singapore moves entire warehouse operations to SingPost’s ecommerce logistics hub)

(See also: SingPost sinks into the red in 4Q after booking TradeGlobal impairment)

Investors had taken flight after SingPost announced on May 12 a massive write-down associated with an e-commerce subsidiary.

The stock fell about 6% to $1.29 — the lowest point since the start of 2016. For the three months ended March, SingPost reported a 2% y-o-y increase in revenue to $324 million but booked a net loss of $65.2 million, versus earnings of $105.4 million in the same quarter of last year.

For the full year, revenue increased 17.1% to $1.3 billion, but earnings fell 86.6% to $33.4 million.

The culprit: US-based end-to-end e-commerce provider TradeGlobal, which SingPost acquired for US$168.6 million ($236 million at the time) in 2015.

SingPost booked impairment charges of $208.6 million in 4QFY2017 ended March, of which $185 million was attributed to a write-down of TradeGlobal.

“Instead of a projected profit of $9.4 million for FY2017, TradeGlobal incurred a significant loss of $25.8 million… significantly [underperforming] the business case [that] supported the investment,” says SingPost in a statement.

Amid disruption in the US fashion retail industry, TradeGlobal lost two major customers accounting for 30% to 40% of its revenue. The company also faced a surge in labour costs and warehouse automation delays. After factoring in TradeGlobal’s dismal performance, the e-commerce business segment incurred operating losses of $33.8 million in FY2017.

TradeGlobal’s letdown is worrying not only because it has dragged down a business segment that was already weak — in FY2016, SingPost’s operating losses from e-commerce were $7.3 million.

The acquisition of TradeGlobal was the largest SingPost had made since 2011 and represented a foray into the big league.

SingPost had been building a business helping Asian retailers take, pack and ship e-commerce orders. TradeGlobal marked its ambitions to also move into the fast-growing US market.

Now, SingPost has formed an independent committee to review the circumstances surrounding the consideration and approval of the TradeGlobal deal. It has also engaged a consultancy to assess the adequacy of the financial and commercial due diligence performed.

Does the company also need to rethink its e-commerce strategy? Are there more write-downs ahead? And do shareholders need to reassess what their shares in SingPost are worth?

In our cover story this week, we take a look at SingPost’s past, present and its uncertain future. Find out more in The Edge Singapore (Issue 780, week of May 22), available at newsstands today.