KEX shares down 8% as analysts downgrade earnings forecasts amid rising fuel costs

Shares of Thailand’s leading parcel delivery company Kerry Express dropped as much as 8% on Monday as recovery remained slow and uneven amid rising fuel costs and intense competition in the delivery market.

As of 12.00 hrs. local time in Thailand, the share price of Kerry Express (Thailand) Pcl. (SET: KEX) fell THB1.95/share, or 7.57%, to THB23.80/share, with a trading value of THB458 million. 

Globlex Securities rates KEX as “Neutral,” noting that, while KEX’s earnings in 2022 are expected to be positive, the company is still facing market competition and the impact of rising oil prices. Consequently, the road to recovery for earnings may be slow and uncertain.

The Bloomberg Consensus Forecast anticipates a loss of approximately THB786 million baht in 2022, compared to a loss of THB47 million in 2021. Globlex recommends Neutral Bloomberg Consensus at THB19.75.

However, the KEX management team anticipates that earnings will become profitable in 2022, with a revenue target of 20% YoY growth and a parcel volume target of 30% YoY growth, as the Company adopts a Smart pricing lower pressure strategy, which is to raise service fees. In addition, the company collaborates with various new partners to introduce new services, such as Kerry Cool, Kerry XL, etc.