Pos Malaysia and the fund managers

 An example of how being right is not necessarily wrong:

"The fund manager said the stock continued to be relatively cheap, trading at 18 times earnings compared to international peers trading at the range of 25 to 30 times earnings."

later on the same article article, another manager says:

 “We peg Pos Malaysia to an 18 times 2014 price-to-earnings ratio, which is at a 13% premium over Singapore Post Ltd (SingPost).

“We think this is justifiable, as we believe Pos Malaysia has larger growth potential compared to SingPost, whose current business model is approaching maturity stage,” it said.

No one is wrong, it is all a matter perspective, I guess...

The article from the STAR is reproduced below:

Pos Malaysia shares soar to all-time high on possibly dividend

by choong en han

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PETALING JAYA: Pos Malaysia Bhd’s future growth prospects and possible special dividend could be the reasons behind the counter hitting an all-time high last week and registering an almost 57% jump in share price year-to-date.
The national postal company closed one sen higher at RM5.46, just four sen shy of its all-time high of RM5.50 on Oct 3.
A fund manager said the company’s five-year strategic plan remained on track and that the special dividend due to the tax credit expiring at the end of the year made investing in the company all the more sweeter.
“The special dividend speculated by many could be lower, as management has indicated that it would allocate some money for capital expenditure. Nevertheless, it is still a bonus. Liquidity is what concerns me the most, as shares floated are already held very tightly,” he said.
The fund manager said the stock continued to be relatively cheap, trading at 18 times earnings compared to international peers trading at the range of 25 to 30 times earnings.
In a report dated Sept 6, HwangDBS Vickers Research said the group’s Section 108 tax credits amounted to RM215mil or 40 sen per share as at March 2013, and would expire by end-2013.
“We believe a special payout is possible, given its net cash of RM1.23 per share as at end-June 2013, and strong recurring cashflow from its core businesses,” it said.
An analyst believes the company is primed for future merger and acquisition activities as it looks for opportunities to expand its operations.
“Discussions with the Middle Eastern potential target could bear fruit soon while closer to home, it might also be looking at regional expansion with opportunities arising from the intra-regional courier business,” he said.
RHB Research, meanwhile, is also bullish on the stock, with a target price of RM6.10 based on the company’s growth potential. It pointed out that the company had taken steps to further improve its earnings power by offering new initiatives.
Besides the expansion of its Islamic pawn-broking business, RHB Research also mentioned that Pos Malaysia was venturing into the logistics business very cautiously due to the competitive nature of the industry.
“It has been leveraging on sister company Proton Holdings Bhd to kick-start its logistics business. Since January 2013, Pos Malaysia has been transporting auto parts between Proton’s vendors and its manufacturing plants. Proton is currently its sole client in the business,” the research outfit said.
It added that Pos Malaysia’s prized asset was its landbank, notably, the plot of land located in KL Sentral measuring 117,563 sq ft worth an estimated RM176mil. However, while management intended to develop the company’s landbank, it was in no hurry to do so now, it said.
“We peg Pos Malaysia to an 18 times 2014 price-to-earnings ratio, which is at a 13% premium over Singapore Post Ltd (SingPost).
“We think this is justifiable, as we believe Pos Malaysia has larger growth potential compared to SingPost, whose current business model is approaching maturity stage,” it said.