Which are 2 NZX supply-chain stocks to consider in 2022?

Highlights

• The pandemic has had a substantial effect on the global supply chain market.
• The supply chain sector has started accepting blockchain technology to increase corporate transparency and efficiency.
• NZ logistics companies Mainfreight and Move Logistics have a positive outlook ahead.

The COVID-19 pandemic has had a substantial effect on the global supply chain market. Various governments implemented strict lockdowns to combat the virus spread, and these lockdowns have impacted normal operations of manufacturers, distributors, and retail industries.

Logistics and supply chain management industries witness a lot of transactions and data flow daily. Subsequently, they also face many challenges of low pricing, increasing speed with the need to persistently monitor product flow and quality.

The supply chain sector has started accepting blockchain technology to enhance corporate openness and productivity.

Let’s have a look at 2 NZX supply chain stocks that can be considered this year.

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MOVE Logistics Group Limited (NZX:MOV) 

Move reported a strong contribution from its warehousing business, good support from its international businesses, and expected aid from the fuels business in FY21. However, the Group made a loss-making contribution from its depot Freight brands in the financial year.

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The Group expects the H2 of FY22 will continue to be a drag on the business with the current year likely to generate a flat result. Move is overhauling the freight division and expects it to make a remarkable improvement in next 12 months.

On 14 January, at the time of writing, MOV was trading at $1.68, down 1.18%.

Mainfreight Limited (NZX:MFT)

Mainfreight delivered a near-80% rise in NPAT on pcp to $130.81 million for the 6 months ended 30 September 2021. The Group’s Air & Ocean revenue performance across regions stayed strong.

MFT’s NZ business saw a disturbance in the first half of FY22 but volumes are seeing recovery as restrictions ease. While the Group’s Australian business experienced increased growth and profitability.

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Mainfreight’s network escalation continues to enhance its regional experience in most countries. However, unparalleled supply chain congestion and demand require delivery hopes to be increased.

On 14 January, at the time of writing, MFT was trading flat at $91.9.

Bottom Line

It remains to be seen how companies will keep their supply chain resilient amid the constantly changing environment and challenges given by the pandemic.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)