Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Thematic (Sector/Industry)

China's Singles Day reaped a record-breaking USD 25.3bn for Alibaba, double of 2016 Black Friday and Cyber Monday sales combined (Source: <a href="https://www.cnbc.com/2017/11/11/singles-day-china-shopping-festival-smashes-record-at-the-halfway-mark.html" target="_blank">CNBC</a>). At a peak moment in the day, customers bought roughly 325,000 items/second. In addition, MSCI China (Information Technology) index crossed the 100% mark last week - it gained 100.6% YTD, while MSCI China (Real Estate) index gained 97.6% YTD. Read further on why our insight provider JL Warren picks <a href="https://www.smartkarma.com/entities/24184" target="_blank" data-smartkarma-citation="entities:24184:1">Baozun Inc. (BZUN US)</a> as a key beneficiary of Singles Day and shifting consumer trends, while Robert Ciemniak dissects the trends in China's real estate. This issue of 'The Week that Was in Greater China@Smartkarma" covers the week of November 13th through November 19th and features a selection of the week's insights on China, Macau, Hong Kong and Taiwan. This is a collaborative report compiled by <a href="https://www.smartkarma.com/profiles/803" target="_blank">Valerie Law, CFA</a>, <a href="https://www.smartkarma.com/profiles/9" target="_blank">Ke Yan, CFA, FRM</a>, <a href="https://www.smartkarma.com/profiles/820" target="_blank">Scott Laprise/ 乐天虎</a>and <a href="https://www.smartkarma.com/profiles/605" target="_blank" data-smartkarma-citation="accounts:605">Daniel Hellberg</a> on a rotating basis. Please let us know if you would like to be included in this collaborative effort.

China's Singles Day reaped a record-breaking USD 25.3bn for Alibaba, double of 2016 Black Friday and Cyber Monday sales combined (Source: CNBC). At a peak moment in the day, customers bought roughly 325,000 items/second. In addition, MSCI China (Information Technology) index crossed the 100% mark last week - it gained 100.6% YTD, while MSCI China (Real Estate) index gained 97.6% YTD. Read further on why our insight provider JL Warren picks Baozun Inc. (BZUN US) as a key beneficiary of Singles Day and shifting consumer trends, while Robert Ciemniak dissects the trends in China's real estate. This issue of 'The Week that Was in Greater China@Smartkarma" covers the week of November 13th through November 19th and features a selection of the week's insights on China, Macau, Hong Kong and Taiwan. This is a collaborative report compiled by Valerie Law, CFA, Ke Yan, CFA, FRM, Scott Laprise/ 乐天虎and Daniel Hellberg on a rotating basis. Please let us know if you would like to be included in this collaborative effort.

The Week That Was in Greater China@ Smartkarma: We like Angang, Magang, Baozun; CEG, Jianpu for IPO

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/24184" target="_blank" data-smartkarma-citation="entities:24184:1">Baozun Inc. (BZUN US)</a> is a B2C e-commerce solutions provider in China mostly to multinational retailers of apparel and consumer electronics companies. BZUN offers a turnkey solution from logistics/warehousing, e-commerce software/IT support, store operations and digital marketing for clients on third party platforms ( <a href="https://www.smartkarma.com/entities/787" target="_blank" data-smartkarma-citation="entities:787:1">Alibaba Group Holding Ltd (BABA US)</a> T-mall, <a href="https://www.smartkarma.com/entities/446" target="_blank" data-smartkarma-citation="entities:446:1">JD.com Inc (ADR) (JD US)</a>) and/or their own website.  The full range of services offer a strong eco-system, where client attrition is extremely low, and up-sell improves margin. We estimate that BZUN will make $1.5 earnings per share in 2019.  Using 30x P/2019E valuation, we reach a target price of $45, 25% upside from today’s share price of $36.

Baozun Inc. (BZUN US) is a B2C e-commerce solutions provider in China mostly to multinational retailers of apparel and consumer electronics companies. BZUN offers a turnkey solution from logistics/warehousing, e-commerce software/IT support, store operations and digital marketing for clients on third party platforms ( Alibaba Group Holding Ltd (BABA US) T-mall, JD.com Inc (ADR) (JD US)) and/or their own website.  The full range of services offer a strong eco-system, where client attrition is extremely low, and up-sell improves margin. We estimate that BZUN will make $1.5 earnings per share in 2019.  Using 30x P/2019E valuation, we reach a target price of $45, 25% upside from today’s share price of $36. 

Baozun: Top Long Idea on Chinese Consumers' Premiumization

United States

PFSweb Inc., is a provider of management services for traditional commerce and electronic commerce companies.  The Company's services include order management, customer care services, billing services, information management and distribution services. PFSweb offers its management services to clients in a range of markets including apparel, electronics, and computer products.

Edgio, Inc. operates content delivery network for internet distribution of video, music, games, and download. The Company offers content delivery network provides digital media and software via the Internet. Edgio serves customers worldwide.

Unisys Corporation is a worldwide information technology services and solutions company.  The Company's services include systems integration, outsourcing, infrastructure, server technology and consulting.  The Company primarily serves the financial services, public sector, communications, transportation, commercial and media markets.

Forrester Research, Inc. is an independent research firm that analyzes the future of technology change and its impact on businesses, consumers, and society. The Company's research products include internet commerce, corporate technology, and technographics data and analysis. Forrester advisory services include partnership programs, web site review, and strategy workshops.

TTEC Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides customer engagement, experience consulting, care, and technology solutions. TTEC Holdings serves customers worldwide.

DHI Group, Inc. is a provider that specialize in career sites and career fairs for high growth vertical sectors. The Company provides services to help recruiters, consultants and businesses hire and train highly qualified professionals.

Travelzoo Inc. provides online marketing solutions to the travel industry.  The Company publishes deals from travel, entertainment, and local companies. Travelzoo researches, evaluates, and tests numerous deals and recommends deals whose accuracy and availability can be confirmed.

Brightcove Inc. provides video hosting and publishing services. The Company operates a video platform whose services include uploading and encoding, content management, players and styling, delivery, and live streaming. Brightcove offers its services globally.

Veritone, Inc. operates as a cloud-based artificial intelligence media technology company. The Company develops a cloud-based ecosystem that enables real-time audio and video processing, audience analytics, search, retrieval, replay, and share capabilities. Veritone offers visual and audio discovery applications.

LivePerson, Inc. provides technology that facilitates real-time sales and customer service for companies doing business on the Internet.  The Company, an application service provider, offers its real-time interaction technology as an outsourced service.  The LivePerson service enables its clients to communicate directly with Internet users via text-based chat.

KGMobilians Co Ltd develops and offers electronic payment solutions. The Company's services include agency business for payment settlement through general phone, cellular phone, and Internet.

CROSS CAT CO., LTD.develops application software for financial companies and government.  The Company also develops network software.  Cross Cat provides various type of services including information technology consulting and support services.

Wins Co Ltd. provides security network services. The Company provides various se curity solutions to protect networks from cyber threats and viruses.

P.T. Multipolar Technology Tbk provides IT solutions. The Company offers services in hardware infrastructure, software solutions, and consulting services.

BrainPad Inc. collects and analyzes large amount of data and provides statistics and insights with data mining technology.  The Company also offers Website-related services.

Hi Sun Technology (China) Limited provides business and technology consulting services and solutions.  The Company delivers a range of specialized services and solutions to its banking, insurance, securities, telecommunications, and utilities clients.  In addition, Hi Sun, through its subsidiaries, provides consulting and information technology outsourcing services and payment solution.

Hearts United Group Co.,Ltd. is a holding company established through reorganization.  The Company manages its subsidiaries which provide software testing services.

Quantum Solutions Co.,Ltd. provides Internet related consulting services.  The Company also provides project management services for system development and develops business application software such as document management tool.

CWT International Limited operates as a holding company. The Company through its subsidiaries engages in digital network operation, Hi-Tech value added services, and energy-saving products manufacturing and services.

Interactive Digital Technologies Inc is focused on the core business of Telecom, IT & Cloud, Media, and geographical information system (GIS) related professional consulting and implementation end-to-end services.

Baozun Inc. provides e-commerce solutions. The Company's services include website design, development and hosting, information technology infrastructure, customer service, warehousing, and logistics services, as well as digital marketing. Baozun serves customers in China.

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Baozun Inc. (BZUN US)

The Week That Was in Greater China@ Smartkarma: We like Angang, Magang, Baozun; CEG, Jianpu for IPO

China's Singles Day reaped a record-breaking USD 25.3bn for Alibaba, double of 2016 Black Friday and Cyber Monday sales combined (Source: CNBC). At...

Valerie Law, CFA

Baozun: Top Long Idea on Chinese Consumers' Premiumization

Baozun Inc. (BZUN US) is a B2C e-commerce solutions provider in China mostly to multinational retailers of apparel and consumer electronics...

JL Warren Capital

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