Kerry Express shares soar on day one
Price confounds analysts' forecasts
Shares of Kerry Express (KEX) soared on the first day of trading to 73 baht before closing at 51.25 baht, up 83% from the initial public offering price of 28 baht.
The country's first SET-listed delivery firm plans to allocate 1 billion baht out of the 8.4 billion it raised to expand investments.
KEX shares ended the day at 51.25 baht, in trade worth 25.26 billion baht, breaking all analysts' forecasts projected along the range of 33-35 baht.
However, KEX's share price is quite overvalued, said Thanadech Rungsrithananon, senior vice-president of UOB Kay Hian Securities.
He said the company will not revise its target price right now.
"We will monitor the company's progress from its performance in the fourth quarter this year and then revise the target at the beginning of 2021," said Mr Thanadech.
Capital Nomura Securities (CNS) set a target price of KEX at 33.50 baht per share.
Kerry also plans to boost its delivery capacity up to 3 million parcels a day by 2023, chief executive Alex Ng said after the company's debut on the SET on Thursday.
Chief operating officer Warawut Natpradith said Kerry's maximum delivery capacity is currently 1.9-2 million parcels a day thanks to the spike in demand for express delivery during the outbreak. For the first nine months, Kerry delivered an average of 1.2 million parcels a day.
Mr Warawut said Kerry may not enjoy the same amount of demand for express delivery during a second wave of the pandemic as the second quarter because people are more experienced in coping with the outbreak.
Nevertheless, the company still requires an expansion plan to prepare for the proliferation of e-commerce business which is forecast to grow by double digits, or nearly 20%, over the next three years, according to the market research.
Chief investment officer Issarin Patramai said the company has allocated a budget worth 1 billion baht to investment plans in 2021, including the expansion of delivery centres and service points, IT technology and other projects to enhance the company's efficiency and keep its leading position in the express delivery business.
Kerry also plans to provide more health protection for its employees next year.
"We will also keep an eye on the outbreak and closely monitor whether it will impact the country's economy and demand for express delivery," he said.
Mr Issarin expects the outbreak situation will subside and drive the country's economy to recover by the middle of 2021.
CNS also raised its share price target for SET-listed VGI by 8% to 7.15 baht per share from 6.65 earlier as the company's transit media business is tending to grow faster than expected.
VGI is also expected to gain positive sentiment from trading KEX shares in the short term as the company holds 19.03% of KEX shares.