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Author: DoggieInvestor   |   Latest post: Thu, 29 Aug 2019, 6:37 PM

 

POS Malaysia - Tariff Hike in the Making???

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POS Malaysia, being a household brand in Malaysia for the longest time, has suffered from declining mail volume as almost everything is going digital. Today, we no longer open our mailbox everyday since our banks will send us the monthly statements all in digital format. 

With the rise of internet, we live our everyday life pretty much on internet. We go into office desk, we open our email, we extract work documents from our office PC, and we conduct our work on internet for the next 8 hours. Tell me if you know any jobs today doesn't need to use internet for the good 8 hours. 

Declining mail volume is an inevitable trend. Just like how fixed line telephone has been going through since the rise of SMS some 20 years ago and now the cheap 4G mobile data that propels our daily communications all on internet. 

That being said, do you know that POS Malaysia has over 700 postal offices across Malaysia? Yes, it's over 700 of them. Some of them are too small in a small town and it is operated by the villager. If you want to deliver a courier, you may not choose POS Malaysia, as there are a few alternative out there such as GDEX, City-Link, TNT Malaysia and many other smaller players. 

However, none of the courier service providers has an as extensive network as POS Malaysia. 

e-Commerce penetration in Malaysia currently stands at 5% in 2018, according to various estimates. Do bear in mind that there is no way to track the "REAL e-Commerce" penetration rate as you simply can't track C2C transaction on Facebook and other platforms. 5% penetration is a very low number if you compare that to South Korea and China, which have above 20% of e-commerce penetration in total retail sales. On top of that, the 20% e-commerce penetration also does not take into account of various business activities conducting online such as Uber, Grab, Grab Food and etc. 

The potential of 3rd Party Logistics industry in Malaysia is humongous. Just take a quick look at China. SF Express it the largest delivery company in China with a market value of RMB 160bn (US$23bn). And SF Express is not the only big player in China. There are JD Logistics, YuanTong, ShenTong, ZhongTong and YunDa logistics. If you add up the combined market value, it's in the hundreds of Billions in RMB. 

Yes, China's GDP is about 40x of Malaysia. Theoretically, the logistics industry should also be much more smaller as compared with China. Remeber Malaysia e-Commerce penetration is only 5% while China is already well above 20%. A quick and dirty calculation would lead one to conclude that China logistics industry, right now, is at least 160x larger than Malaysia. 

Today, POS Malaysia's market value is a mere RM 1.35bn, or RMB 2.25bn, a fraction of the China 3rd Party Logistics Companies combined market value. 

If history is any good guide towards the future of 3rd Party Logistics industry in Malaysia, it's not hard to imagine that logistc service indsutry in Malaysia is set to grow many folds over the next 5-10 years. As long as consumer continues to go to e-commerce platforms like Lazada, Shopee to buy products. 

If rising e-commerce penetration is an inevitable trend, i believe POS Malaysia will eventually be the biggest player in Malaysia. Simply because the company already owns the widest coverage of Point of Distribution. Its unit cost is going to be the lowest in the country, once the business is managed diligently. 

Tariff hike or not, to me, is not an important factor. For sure, a tariff hike would give POS Malaysia more profits to fund the growth of new logistic services in Malaysia. In the long run, i firmly believe that it is very difficult for its competitors to build up an extensive logistics network like POS Malaysia. The intangible assets POS Malaysia has, is simply too expensive to replicate. 

We shall see...........

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Labels: POS

Related Stocks

Chart Stock Name Last Change Volume 
POS 1.03 0.00 (0.00%) 2,493,500 

  Be the first to like this.
 
speakup nobody sends letters anymore. sunset industry
30/07/2019 10:09 PM
shareinvestor88 Land bank , postal bank , e commerce
30/07/2019 11:18 PM
DoggieInvestor POS Laju is one of the biggest e-commerce logistics providers in Malaysia !
31/07/2019 1:28 AM


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