POS - There's Good News in The Mail (OSK)

We met the management recently and came away with the feeling that the group is likely to announce improved numbers for its 12MFY11 results due for release this evening. This is based on the better showing at its courier and retail business as well as prudent cost controls. Management also indicated that mail volume had held up better than expected. We like POSM’s potential synergy with DRB-HICOM, which is likely to announce their collaboration next month. Maintain BUY, with our FV unchanged at RM4.12, based on SOP valuation. We will not rule out another generous dividend payout for FY11 considering the group’s huge cash pile of RM369m as at Sept 2011.