Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Hellobike, an Alibaba’s investee and traffic source, will go public in 2Q21.</li>
<li>NetEase’s Cloud Music is seeking IPO next year.</li>
<li>The authorities said Tencent and Baidu were fined not because they eliminate competition, but because they forgot to ask for approval.</li>
<li>Tencent invests in Rakuten.</li>
</ul>


Hellobike, an Alibaba’s investee and traffic source, will go public in 2Q21.
NetEase’s Cloud Music is seeking IPO next year.
The authorities said Tencent and Baidu were fined not because they eliminate competition, but because they forgot to ask for approval.
Tencent invests in Rakuten.


China Internet Weekly (Mar 15): BABA & NTES Subsidiaries Seek IPO, Tencent Invests in Rakuten

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.</p></div><div><p>Coupang has increased its IPO price range from $27-30 per share to $32-34 per share. The number of the offer shares remains unchanged at 120 million shares and the primary/secondary split remains unchanged. At the upsized IPO price range of $32-34 per share, Coupang will have a market cap of $55-58 billion vs the previous market cap of $46-51 billion. At the mid-point of the IPO price range, the net proceeds from the primary raise are $3.2 billion ($2.8 billion previously). </p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/coupang-ipo-initiation-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:48125" rel="noopener">Coupang IPO Initiation: Delivering the Goods</a>, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In <a href="https://www.smartkarma.com/insights/coupang-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:48708" rel="noopener">Coupang IPO: Valuation Insights</a> we noted was attractively priced for its growth potential vs global e-commerce peers at the original IPO price range.</p>
<div class="content-highlight"><p>Our valuation analysis suggests that Coupang remains attractive at the upsized IPO price range of $32-34 per share. Our base-case DCF valuation is $39.35 per share and we would participate in the IPO.</p></div>
</div>

Coupang (CPNG US) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.Coupang has increased its IPO price range from $27-30 per share to $32-34 per share. The number of the offer shares remains unchanged at 120 million shares and the primary/secondary split remains unchanged. At the upsized IPO price range of $32-34 per share, Coupang will have a market cap of $55-58 billion vs the previous market cap of $46-51 billion. At the mid-point of the IPO price range, the net proceeds from the primary raise are $3.2 billion ($2.8 billion previously). 
In Coupang IPO Initiation: Delivering the Goods, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In Coupang IPO: Valuation Insights we noted was attractively priced for its growth potential vs global e-commerce peers at the original IPO price range.
Our valuation analysis suggests that Coupang remains attractive at the upsized IPO price range of $32-34 per share. Our base-case DCF valuation is $39.35 per share and we would participate in the IPO.


<div>
<p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.</p>
<p>At the proposed IPO price range of $27-30 per share, Coupang will have a market cap of $46-51 billion. The IPO which comprises of a primary and secondary offering will raise total gross proceeds up to $3.6 billion.  At the mid-point of the IPO price range, the net proceeds from the primary raise are $2.8 million. </p>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/coupang-ipo-initiation-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:48125" rel="noopener">Coupang IPO Initiation: Delivering the Goods</a>, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. Coupang is a new-economy growth story and at the IPO price range, is attractively priced for its growth potential vs global e-commerce peers. Consequently, we would participate in the IPO. </p></div></div></div>


Coupang (CPNG US) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.
At the proposed IPO price range of $27-30 per share, Coupang will have a market cap of $46-51 billion. The IPO which comprises of a primary and secondary offering will raise total gross proceeds up to $3.6 billion.  At the mid-point of the IPO price range, the net proceeds from the primary raise are $2.8 million. 
In Coupang IPO Initiation: Delivering the Goods, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. Coupang is a new-economy growth story and at the IPO price range, is attractively priced for its growth potential vs global e-commerce peers. Consequently, we would participate in the IPO. 

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a> , the delivery arm of China’s second largest e-commerce platform JD.com has filed for an IPO to list its shares on the Hong Kong Exchange. According to news media outlets, JD Logistics (JDL) plans to raise about US$4-5bn through the IPO.</p><p>JDL was spun off from JD.com in 2017, and the company offers a full spectrum of supply chain solutions and high-quality logistics services ranging from warehousing to distribution.</p><p>According to the CIC report, the company was ranked the largest player in China’s integrated supply chain logistics services market in terms of total revenues in 2019.</p><p>This is the <strong>First</strong> of a series of reports on JD Logistics’ IPO, and in this insight, we will be discussing the company’s business model, revenues and gross profit margin.</p>

JD Logistics (JDL HK) , the delivery arm of China’s second largest e-commerce platform JD.com has filed for an IPO to list its shares on the Hong Kong Exchange. According to news media outlets, JD Logistics (JDL) plans to raise about US$4-5bn through the IPO.JDL was spun off from JD.com in 2017, and the company offers a full spectrum of supply chain solutions and high-quality logistics services ranging from warehousing to distribution.According to the CIC report, the company was ranked the largest player in China’s integrated supply chain logistics services market in terms of total revenues in 2019.This is the First of a series of reports on JD Logistics’ IPO, and in this insight, we will be discussing the company’s business model, revenues and gross profit margin.

JD Logistics IPO: Expanding External Customer Base Supports Top Line Growth and GPM Expansion

HK/China Equity Long-Short

Osbert Tang, CFA

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a>, the logistics arm of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, is an interesting potential IPO in Hong Kong. In this Insight, we use a different angle to look at JDL, focusing on the concerns and negative issues on the company based on information in the Application Proof Prospectus. This does not mean that we are bearish on JDL and its IPO, but we think they are important issues that investors need to consider.</p><p>In summary, our key concerns on JDL are: 1.) reliance on JD Group as key customer, 2.) fast-growing other customers may carry lower margin, 3.) numerous connected transactions, 4.) short history of serving external customers, 5.) lack of self-owned warehouses, and 6.) distortion by government grants on bottomline. We will get back in greater depth once more information and details on pricing are available.</p>

JD Logistics (JDL HK), the logistics arm of JD.com Inc. (9618 HK), is an interesting potential IPO in Hong Kong. In this Insight, we use a different angle to look at JDL, focusing on the concerns and negative issues on the company based on information in the Application Proof Prospectus. This does not mean that we are bearish on JDL and its IPO, but we think they are important issues that investors need to consider.In summary, our key concerns on JDL are: 1.) reliance on JD Group as key customer, 2.) fast-growing other customers may carry lower margin, 3.) numerous connected transactions, 4.) short history of serving external customers, 5.) lack of self-owned warehouses, and 6.) distortion by government grants on bottomline. We will get back in greater depth once more information and details on pricing are available.

JD Logistics Pre-IPO: What Are the Concerns and Negatives?

China

Zhongbai Holdings Group Co., Ltd. owns and operates several department stores and supermarkets.  Through it subsidiaries, the Company also operates in pharmaceuticals manufacturing, real estate development, and property management.

Better Life Commercial Chain Share Co., Ltd. operates a chain of supermarkets, general merchandise stores and household electrical appliances stores.

Better Life Comm Chain Share Co (002251 CH)

Shanghai NO. 1 Pharmacy Co., Ltd. trades and markets medical products on a retail basis, chain drug store basis, and a wholesale basis.  The Company, through its subsidiaries, produces drugs, as well as develops, leases, and manages commercial real estate properties.

Luyan Pharma Co Ltd is a medical distributor. The Company wholesales medical equipment, vaccines, and more.

New Huadu Supercenter Co., Ltd. engages in chain operations in marketplaces, sup ermarkets, department stores.

Sanjiang Shopping Club Company Limited operates community budget supermarket franchises. The Company provides customers with retail services.

Renrenle Commercial Group Co.,Ltd. operates shopping outlets, supermarkets and department stores. The Company operates its stores throughout China.

Lianhua Supermarket Holdings Company Limited operates hypermarkets, supermarkets , and convenience stores in China.

Beijing Jingkelong Company Limited mainly engages in retail and wholesale businesses.

Jiahua Stores Holdings Limited operates retail department and supermarket stores in Shenzhen, China.

Qol Co., Ltd. operates direct-run pharmacies.  The Company also provides clinical trial services for drug development.

PT Tigaraksa Satria Tbk is divided into three groups, mainly distribution, own products, and investment. The Company distributes food and beverages, household products, and books and publications. In the own products group, Tigaraksa manufactures garments, air freshener, and milk powder.

INAGEYA CO., LTD. manages retail shops which mainly handle seafood, processed foods, and household products.  The Company mainly operates the business in Tokyo, Saitama, and Kanagawa area.

Village Super Market Inc. owns and operates supermarkets. The Company through its subsidiaries provides prepared food, natural and organic food, seafood products, bakery products, and pharmacy services. Village offers its products and services throughout New Jersey, New York, Connecticut, Pennsylvania, Delaware, and Maryland.

Yokohama Reito Co., Ltd. processes and sells seafood, fish, and livestock products.  The Company also manages cold storage facilities.

Taokaenoi Food & Marketing PCL operates as a food services firm. The Company manufactures edible seaweed snacks.

MINISTOP CO., LTD. operates convenience stores primarily in the Kanto and the Chubu areas of Japan.  The Company sells fast foods, daily dishes, processed foods, home necessities, and magazines.  Ministop is affiliated with Aeon Co., Ltd.

Mammy Mart Corporation operates supermarkets in Saitama Prefecture.  The Company mainly operates small scale stores.

NIHON CHOUZAI Co., Ltd. operates a drug store chain in Japan.  The Company manages drug prescriptions, orders, and inventories of all stores through an online system.

Cawachi Ltd. operates a chain of drug stores in the Tohoku and Chubu regions. The Company's stores sell products such as pharmaceuticals, cosmetics, health products, foodstuffs, and household consumable goods.  Cawachi also operates a chain of pharmacies.

Dada Nexus Limited operates a platform for local on-demand retail and delivery. The Company provides a digital solution leveraging the crowdsourcing model to address the challenge of frequent fluctuations brought forward by the nature of on-demand orders and to match the surging demand for delivery capacity with efficient supply. Dada Nexus serves customers in China.

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Dada Nexus (DADA US)

China Internet Weekly (Mar 15): BABA & NTES Subsidiaries Seek IPO, Tencent Invests in Rakuten

Tencent was fined not because they eliminate competition, but because they forgot to ask for approval. Tencent invests in Rakuten. Hellobike and...

Ming Lu

Coupang IPO: Upsized Deal Size

Coupang has increased its IPO price range from $27-30 per share to $32-34 per share. Our base-case DCF valuation is $39.35 per share and we would...

Arun George

Coupang IPO: Valuation Insights

The $27-30 price range implies gross proceeds up to $3.6 billion and values Coupang at $46-51 billion. At the price range, Coupang is attractively...

Arun George

JD Logistics IPO: Expanding External Customer Base Supports Top Line Growth and GPM Expansion

This is the First of a series of reports on JD Logistics’ IPO, and in this insight, we will be discussing the company’s business model, revenues...

Shifara Samsudeen, ACMA, CGMA

JD Logistics Pre-IPO: What Are the Concerns and Negatives?

This Insight looks into the concerns and negative issues of JD Logistics based on Application Proof Prospectus. We believe they are useful for...

Osbert Tang, CFA

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