Alibaba, SingPost tie-up may see further extension, say analysts

SingPost’s latest acquisitions complements Alibaba’s expansion plans.

Alibaba and Singapore Post’s (SingPost) partnership is going the extra mile, according to a report UOB Kay Hian.

The partnership between Alibaba and SingPost continues to play a pivotal role in propelling SingPost’s cross-border e-commerce volumes and scale.

Following executive chairman Jack Ma’s objective to boost overseas e-commerce revenue by a whopping 50%, Alibaba has been aggressively pursuing businesses outside of mainland China. More recently, the firm inked an alliance with US Postal Service in efforts to beef up presence in US e-commerce markets.

The report notes SingPost’s latest acquisitions in US TradeGlobal and Jagged Peak could therefore further complement Alibaba’s overseas expansion goals.

Meanwhile, in terms of Alibaba’s second tranche of investment in SingPost, the report views Alibaba as committed to the agreement. The long-stop date has thus far been extended twice, and both times, Alibaba committed to an extended date. This reflects the upside value of an Alibaba-SingPost team-up.

The long-stop date for Alibaba’s second tranche of investment agreement has been extended to 31 May this year, though given the uncertainties over the timing of regulatory approvals, UOB KH believes it would not be surprising if there is a further extension.

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