The US’ change in de minimis tax rule for air cargo is a negative development for SATS, but its negative earnings impact should be capped at high single digit in FY26-27 by our estimate and are also likely to have been priced in by the recent decline of SATS's share price.
The US tariff hikes.
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The administration has indicated that similar tariffs on European Union products are under consideration.
Change in de minimis tax rule.
In conjunction with these tariffs, the executive orders also eliminate the de minimis tax exemption rule, which previously allowed small packages valued under US$800 to enter the US without incurring tariffs. This change is expected to significantly impact cross-border e-commerce, particularly affecting Chinese retailers like Shein and Temu that have utilised this exemption to offer lower-priced goods directly to US consumers.
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Expect negative earnings impacts on SATS...
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
