Good grief! SingPost share price is expected to encounter plenty of headwinds following the release of a set of disastrous full-year financial results on 7 May 2019. Net profit collapsed by a whopping 86% to reach $18.9 million. In the previous quarter, the management had dropped hints of massive impairment for the latest quarter but nobody would have predicted that the impairment amounted to $98.7 million. No wonder all hell broke loose for SingPost share price.
In the aftermath of the revelation, SingPost share price slumped from $1.05 to the current $0.93. What riled investors is the impairment charges of the U.S businesses – TradeGlobal and Jagged Peak. The last time that SingPost recorded significant impairments was in FY2017 which saw SingPost suffered impairment charges of a massive $208.6 million for TradeGlobal. The huge impairment charges walloped SingPost share price upside down back then. The U.S businesses turned out to be black holes for SingPost, wrecking havocs to its business fundamentals and subsequently led to overhaul of the management and dividend policy.
If investors are intending to buy on the dip, they must be mindful that SingPost share price could be in for a harsh winter for the rest of the year. This is because in the latest financial report, the management revealed that SingPost is exiting the U.S business and that “the Group expects to continue to account for operating losses on the U.S. businesses until it completes its exit”. But on the flip side, the planned disposal of the U.S businesses would finally put on end to the tragic chapter of its overseas e-commerce misadventure.
Is the latest news a silver lining in the making or just another false dawn for SingPost share price, which had endured crisis after crisis in recent years?
SingPost share price in ice and fire
Needless to say, the big boys had decided to punish SingPost for the disappointing financial results. In the week of 6 May 2019, short sellers sold a whopping 5 million shares, sending SingPost share price tumbling off the cliff. The short selling volume in that week was the highest in three months. Since then, SingPost share price never looked back and continued its bearish run for the past month.
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