Malaysia’s new courier framework to lead to player consolidation

KUALA LUMPUR: The Malaysian Communications and Multimedia Commission’s (MCMC) new courier licencing framework will pave the way for consolidation in future and eventually reduce the number of players in the industry, Hong Leong Investment Bank Bhd (HLIB) said.

The firm said at the same time, industry players would gear up to keep abreast with the new structure and strive to provide better service for consumers.

“We are positive on the new licencing frameworks as we believe it will pave the way for more players’ consolidation in future,” HLIB said in a note today.

For Pos Malaysia Bhd, HLIB does not foresee much changes on the new licence structure for the company’s licence, as it is the only one that holds the status of universal service licence with widest coverage and invested capital in Malaysia.

“However, we believe its courier business segments will potentially see additional income under these new initiatives from potentially lesser competition as well as better margin from a better pricing power in future.

“Pos Malaysia’s near-term outlook remains challenging dragged by its conventional mail and aviation business,” it said.

HLIB has maintained its “hold” call on Pos Malaysia with an unchanged target price of 86 sen.

Meanwhile, it said the new licencing framework would strengthen GDEX Bhd’s current core business and provide the company with opportunities to expand its business portfolio to accelerate growth.

GDEX is not rated under HLIB’s coverage.

Source: NST