As the stake is now below 5%, Alibaba is no longer obliged to make further public filings if it is to sell down its stake further.
This prompted her to cut her fair value for SingPost for the second time in less than a month. She had just cut her fair value from 59 cents to 49.5 cents on Aug 22. In her Sept 15 note, Lim figures this stock is worth 44 cents.
Alibaba's move, in a way, is not unexpected, given that it had a few months earlier unwound its cross-shareholdings with SingPost in two entities, Quantium Solutions International (QSI) and 4PX.
Singtel, which holds 22% of SingPost, has an active asset monetisation strategy in place where it will look to divest assets deemed non-core to improve shareholder value.
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"While SingPost itself was also looking to divest non-core assets post-strategic review, SingTel might have had a greater impetus to retain its investment in SingPost to benefit from potential special dividends," writes Lim in her Sept 15 note.
"However, at SingPost's most recent business update for its 1QFY2026 ended June, we got a sense that SingPost will no longer be pursuing any sizeable divestments, such as that of SingPost Centre, at least until the company’s strategy has been reset," she adds.
"While the probability of SingTel divesting out of SingPost is low, it is non-zero, and if it happens, (and) will place further pressure on SPOST’s share price," reasons Lim.
Another angle to SingPost is its potential privatisation - a move Lim believes is not on the cards yet "based on our inference, given the ongoing search for a new CEO and continued emphasis on a strategic reset," she says.
"While greater clarity on SingPost’s commercial viability and next engine of growth may provide some reprieve to its share price, the company’s long-term outlook will still be dependent on the nature of the new strategy, as well as the new management’s ability to execute on it," she adds.
Lim is using the same sum-of-the-parts method to value SingPost but she has increased her discount to 25% from 15%, which brings her fair value down from 49.5 cents to 44 cents.
"We reiterate our HOLD rating on the counter given limited sustainable re-rating catalysts on the horizon at the time of writing, and the challenges of justifying the value of the company based on its current earnings potential alone," she adds.
SingPost shares changed hands at 43 cents as at 9.53 am, down 1.15%. It is down 19.44% year to date.
