SATS - UOB Kay Hian 2025-02-04: The US De Minimis Tax Change A Negative Event But Impacts Likely Priced In

• 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.

• - Read this at SGinvestors.io -
• 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.
• - Read this at SGinvestors.io -

Expect negative earnings impacts on SATS...

• Read more at SGinvestors.io.

Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-02-04 SGinvestors.io

---