HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

<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?

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.

<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

China

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.

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

Dada Nexus (DADA US)

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

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)