KEX: Live Up to Investors’ Expectations?

Is the expectation of having Covid-19 outbreak to boost KEX’s revenue an overestimation?

Kerry Express (Thailand) Public Company Limited (KEX) made a marvelous entrance in the Thai stock market on the first trading day with a trading value of 25.3 billion baht on December 24, 2020. However, the record has been overthrown by the even more stunning entrance of PTT Oil and Retail Business Public Company Limited (OR) with a trading value of 47.4 billion baht on February 11, 2021.


As e-commerce is booming in Thailand, coupled with the limitation of going to the shop or mall due to the coronavirus outbreak, KEX is expected to have robust growth in its delivery business.

However, the earnings announcement for the 2020 performance failed to meet expectations as KEX’s revenue declined by 4.4% YoY to 18,917 million baht, while recording a net profit of 1,405 million baht, representing a slight growth of 5.8%.

Upon taking a deeper look, the data showed that every business segment recorded a decline last year. The business-to-business (B2B) segment dropped 17.4% to 352 million baht. The business-to-customer (B2C) segment declined 4.7% to 8,528 million baht. Meanwhile, the customer-to-customer (C2C) segment decreased 2.2% to 10,011 million baht.


The coronavirus outbreak might boost online marketing activity, which would result in more KEX’s delivery service. However, the prolonged outbreak had caused damage and a halt to the Thai economic sectors, while draining liquidity from SMEs. Corporates began to lay off, resulting in lower consumer’s buying pressures and pressuring KEX’s revenue.

The expectation of having Covid-19 outbreak to boost KEX’s revenue might be an overestimation.


Moreover, the delivery market has a big market share, but it is also highly competitive as well. There are Thailand Post, Lazada Express, SCG Express, DHL eCommerce, NIM Express, Flash Express, Ninjavan, Lalamove, J&T Express and CJ Logistic, etc.

When there are numerous business competitors in the market, price dumping is a common strategy to seek higher market share, which is in line with KEX’s adjustment in delivery price to lower the price for eco-delivery methods.

This might be the reason why KEX’s revenue did not meet the market’s expectations in 2020.


In the meantime, the 5.8% increase in net profit was mainly due to lower costs and administration expenses by 5.1% from 16,704 million baht to 15,850 million baht.


A decline in costs and expenses reflects the company’s well-managed operations. But if the revenue remains flat, net profit will stop and there will be no growth into the next phase. This is why every section must grow at the same pace.