Kerry Express Thailand (KEX), a leading delivery service provider, formed a joint venture company with food supplying titan Betagro to run a cold delivery platform, it said on Monday.
The name of the JV is “Kerry Betagro,” Kerry’s chief executive Kin Hang Ng said in a statement published on the Stock Exchange of Thailand, with Kerry holding a 60-per-cent stake and Betagro holding the rest.
Since 2020, the Covid-19 pandemic has shifted consumer behavior, causing them to shun face-to-face interactions and prioritize at-home deliveries.
The JV’s main business goal is to develop a “cold delivery platform” nationwide driven by world-class technology. It is expected to begin service as early as the fourth quarter of 2021.
“The initial registered capital will be 1 million baht, with a plan to further increase to 50 million baht during the first phase,” the statement said.
According to Kerry, Thailand’s cold chain market is anticipated to have strong demand due to food safety concerns and rising demand for cold product delivery.
As of Monday, Kerry’s share price was trading at 39.50 baht, down 1.25 per cent from its prior closing. Analysts at Tisco Securities rated ‘Buy” on KEX at the target price of 45 baht.
Despite pressures from Covid-19 restrictions during August, Tisco predicted a growing parcel number for Kerry in the second half of 2021, compared to the first half and low base levels of last year.
Revenue from its new business such as Kerry Cool and Kerry Wallet is expected to be included in 2022 results, said analyst Rasmiman Sermprasert. “We expect the company to maintain a net profit margin of 6 – 7 per cent per annum.”
Kerry now operates around 16,000 service stations throughout Thailand, covering all provinces.