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/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007. JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-initiation-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:48279" rel="noopener">JD Logistics IPO Initiation: The Flow of Things</a>, we opined that JD Logistics' fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. In this note, we take a first look at JD Logistics' valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>

JD Logistics (JDL HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007. JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. In JD Logistics IPO Initiation: The Flow of Things, we opined that JD Logistics' fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. In this note, we take a first look at JD Logistics' valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.

<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 is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. </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. In this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.</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.Coupang is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. 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 this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.

<p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG KS)</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. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>, has filed for an NYSE IPO to raise up to $2 billion, according to press reports.</p><div class="content-highlight"><p>Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.</p></div>

Coupang (CPNG KS) 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. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by Softbank Group (9984 JP), has filed for an NYSE IPO to raise up to $2 billion, according to press reports.Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.

Coupang IPO Initiation: Delivering the Goods

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.

<p><a href="https://www.smartkarma.com/entities/youdao-inc" target="_blank" data-smartkarma-citation="entities:28315:1" rel="noopener">Youdao (DAO US)</a> is looking to raise about US$240m in its follow-on offering. In this note, we will briefly look at Q3 2020 results, share our thoughts on deal dynamics.</p><div><p>We have previously covered the IPO in:</p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/youdao-inc-pre-ipo-weak-conversion-rate-is-a-worry" target="_blank" data-smartkarma-citation="insights:32823" rel="noopener">Youdao, Inc (有道) Pre-IPO - Weak Conversion Rate Is a Worry</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/youdao-inc-ipo-review-expensive-valuation-but-tiny-float-good-sentiment-could-mean-a-pop" target="_blank" data-smartkarma-citation="insights:33194" rel="noopener">Youdao, Inc (有道) IPO Review - Expensive Valuation but Tiny Float + Good Sentiment Could Mean a Pop</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/youdao-inc-trading-tiny-float-but-limited-upside" target="_blank" data-smartkarma-citation="insights:33885" rel="noopener">Youdao, Inc (有道) Trading - Tiny Float but Limited Upside</a> </li>
</ul></div>

Youdao (DAO US) is looking to raise about US$240m in its follow-on offering. In this note, we will briefly look at Q3 2020 results, share our thoughts on deal dynamics.We have previously covered the IPO in:

Youdao, Inc (有道) Pre-IPO - Weak Conversion Rate Is a Worry 

Youdao, Inc (有道) IPO Review - Expensive Valuation but Tiny Float + Good Sentiment Could Mean a Pop 

Youdao, Inc (有道) Trading - Tiny Float but Limited Upside 


Youdao (有道) Placement - Reasonable Valuation with Strong Growth Momentum

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

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<p>Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel <em>volume</em> growth remained strong in December, up 37% YoY. </p>
<p>Unfortunately, <em>pricing</em> remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. </p>
<p>Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021. </p>




Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel volume growth remained strong in December, up 37% YoY. 
Unfortunately, pricing remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. 
Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021. 

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation

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)

JD Logistics IPO: Valuation First Look

JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. We think that the rumoured IPO valuation...

Arun George

Coupang IPO: Valuation First Look

Coupang is seeking a $50 billion valuation, according to Reuters. Overall, based on our valuation analysis, we think that the rumoured IPO...

Arun George

Coupang IPO Initiation: Delivering the Goods

Coupang, which is backed by Softbank, has filed for an NYSE IPO to raise up to $2 billion, according to press reports. Coupang's fundamentals tick...

Arun George

Youdao (有道) Placement - Reasonable Valuation with Strong Growth Momentum

Youdao (DAO US) is looking to raise about US$240m in its follow-on offering. In this note, we will briefly look at Q3 2020 results, share our...

Zhen Zhou, Toh

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation

Although express parcel volume growth remained strong in December, unit pricing was still weak, and we expect more companies to report losses in Q4...

Tracking Traffic

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