KUALA LUMPUR (March 23): Shares of Pos Malaysia Bhd (Pos) rose 1.53% in early trade this morning after Hong Leong IB Research has upgraded Pos to “Hold” with a higher target price of RM4.80 (from RM3.36) after it was announced that Malaysia Airport Holdings Bhd and Cainiao Network, logistics arm of Alibaba group, are to develop a regional electronic commerce and logistics hub in Malaysia. In a note today, the research house said the planned hub, DFTZ, would be situated at KLIA Aeropolis, an area with space of 100 square km of KLIA area. “The launch of DFTZ project would give a boost to Pos Aviation revenue as the group would secure additional sources of income. “Raise FY18/19 earnings forecasts by 7/13% to account for higher revenue assumption for Pos Aviation. “Target price is raised to RM4.80 from RM3.36 previously post our earnings upgrade and roll forward valuation pegging to higher target FY19 PER multiple of 25x (from 20x) to price in improvement in prospects for e-commerce business in Malaysia post DFTZ launch,” it said.

Source: The Edge Markets March 23, 2017 01:30 UTC