The worst is over for SingPost's e-commerce business

Its operating losses narrowed down to $3.8m.

Despite a US peak shopping season in 3Q2018, SingPost’s e-commerce segment performed reasonably well with operating loss stable at $3.8m, and in line with its turnaround business plan.

According to a report, the quarter was a litmus test for SingPost’s e-commerce division, as both Jagged Peak (JP) and TradeGlobal (TG) exercised "good cost controls" during the US peak shopping season even after incurring $3.8m loss in Q3.

Jagged Peak benefitted from 43.9% sales growth, on the back of new brands and "sticky" customer relationships.

"Given Q3's litmus test, we think the worst could be over for e-commerce, and a sooner-than-expected reversion to profitability could be a re-rating catalyst for the stock," CIMB Research analyst Ngoh Yi Sin said.

This segment recorded $8.4m operating loss in Q3 of 2017 after TG lost two key customers and suffered from the high cost of seasonal fulfilment labour.

"We expect narrowing losses in the coming quarters as management executes on its business turnaround plans," Ngoh added.

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