Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/645/original/BANNER-TTOtherDec20_GreyOrange.png?1610234135" class="editor-image img-responsive" data-smartkarma-image-id="181645"></figure>
</section>
<p>In this note, we explain how authorities in China measure the development of the country's express parcel delivery industry using the China Express Development Index, or CEDI. </p>
<p>We believe CEDI is worth watching. Its December 2020 performance suggests sector growth is moderating, and that express companies must continue to invest aggressively to lift service levels. </p>
<p>CEDI's recent trends support our investment thesis for the sector, which is that pressure to consolidate is rising here in 2021. We believe <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a> may become an attractive acquisition target over the next 12 months; we rate its shares Buy. </p>




In this note, we explain how authorities in China measure the development of the country's express parcel delivery industry using the China Express Development Index, or CEDI. 
We believe CEDI is worth watching. Its December 2020 performance suggests sector growth is moderating, and that express companies must continue to invest aggressively to lift service levels. 
CEDI's recent trends support our investment thesis for the sector, which is that pressure to consolidate is rising here in 2021. We believe BEST Inc (BEST US) may become an attractive acquisition target over the next 12 months; we rate its shares Buy. 

How Chinese Authorities Measure the Development of the Express Sector, & Why It Matters to Investors

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div>
<p>In this note, we aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings and through various media and other sources.</p>
</div>
<div>
<p>For readers who are not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea and A-shares), including China ADRs. Hence, our pipeline will only include companies that fit these criterion.</p>
</div>
<div>
<p><strong>Feel free to drop us a message for additional information (bookrunners and coverage) on these IPOs</strong></p>
</div>


In this note, we aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings and through various media and other sources.


For readers who are not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea and A-shares), including China ADRs. Hence, our pipeline will only include companies that fit these criterion.


Feel free to drop us a message for additional information (bookrunners and coverage) on these IPOs


Aequitas 2021 Asia IPO Pipeline - More Mega IPOs to Come

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Pinduoduo (PDD)’s employee died a sudden death on the way home at a frozen deep night.</li>
<li>Donald Trump banned transactions with 8 Chinese apps.</li>
<li>Chinese developers’ global income increased by 45% yoy, higher than 28% yoy of the global market size.</li>
</ul>


Pinduoduo (PDD)’s employee died a sudden death on the way home at a frozen deep night.
Donald Trump banned transactions with 8 Chinese apps.
Chinese developers’ global income increased by 45% yoy, higher than 28% yoy of the global market size.


China Internet Weekly (11Jan2021): PDD Employee Died at Frozen Deep Night, US Banned 8 Chinese Apps.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

RLX Technology Inc / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. </p></div><div><p>RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.</p></div><div>
<p>Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.</p>
<p>However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings leaving one to wonder where these operations are housed and who exactly owns them.</p>
<p>In my earlier insight, <a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-the-positives-fast-growth-low-penetration" target="_blank" rel="noopener">RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration</a>, I spoke about the positive aspects of the company. In this insight, I'll highlight some of the not so flattering aspects. </p>
</div>

RLX Technology Inc (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.
Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.
However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings leaving one to wonder where these operations are housed and who exactly owns them.
In my earlier insight, RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration, I spoke about the positive aspects of the company. In this insight, I'll highlight some of the not so flattering aspects. 


RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul>
<li>Hong Kong opposition wiped out</li>
<li>Where is Jack Ma?</li>
<li>Delaying tactics and fading hope for clues</li>
<li>EU hopes China deal levels the playing field</li>
<li>Trump administration attempts more China bans</li>
</ul><div class="content-remarks"><p>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</p></div>

China News That Matters
Hong Kong opposition wiped out
Where is Jack Ma?
Delaying tactics and fading hope for clues
EU hopes China deal levels the playing field
Trump administration attempts more China bans
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

Hong Kong/ Jack Ma/ Covid-19/ EU-China/ US-China

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Alibaba Group Holding (BABA US)

How Chinese Authorities Measure the Development of the Express Sector, & Why It Matters to Investors

Understanding how Chinese authorities measure the development of China's express industry can help investors better evaluate the segment and the...

Tracking Traffic

Aequitas 2021 Asia IPO Pipeline - More Mega IPOs to Come

We aim to highlight the Asia Pacific IPO pipeline for 2021. This list has been compiled on a best effort basis from tracking the company filings...

Zhen Zhou, Toh

China Internet Weekly (11Jan2021): PDD Employee Died at Frozen Deep Night, US Banned 8 Chinese Apps.

Pinduoduo (PDD)’s employee died a sudden death on the way home at a frozen deep night. Donald Trump banned 8 Chinese apps. Chinese developers’...

Ming Lu

RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops

RLX Technology (RLX US) aims to raise around US$1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of...

Sumeet Singh

Hong Kong/ Jack Ma/ Covid-19/ EU-China/ US-China

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)