Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Capital Markets

To match service levels offered by <a href="https://www.smartkarma.com/entities/446" target="_blank" data-smartkarma-citation="entities:446:1">JD.com Inc (ADR) (JD US)</a> and leading express carrier <a href="https://www.smartkarma.com/entities/4128" target="_blank" data-smartkarma-citation="entities:4128:1">S.F. Holding Co Ltd (002352 CH)</a>, <a href="https://www.smartkarma.com/entities/787" target="_blank" data-smartkarma-citation="entities:787:1">Alibaba Group Holding Ltd (BABA US)</a> and its logistics partners are making a belated push to invest in first- and last-mile parcel delivery capacity. BABA and its partners have so far avoided making the large investments needed to control 100% of their parcel delivery networks. Instead of direct ownership of first- and last-mile assets, BABA has tried to rely upon the 'transparency' provided by its technologically sophisticated logistics subsidiary, CaiNiao Network (CN). But five years after BABA set up CN, JD.com's continued lead in logistics quality and logistics speed -- confirmed in private surveys of Chinese consumers -- seems to have convinced BABA and its partners that they must finally take the plunge.Battle lines in this coming logistics war have been drawn over the past year or so. JD.com established JD Logistics in April 2017, and the private company recently raised US$2.5 bn at a valuation of US$13.4 bn. SF Express -- China's largest express carrier by revenue -- already offers first- and last-mile delivery, and has shown a willingness to butt heads with BABA. The five smaller express companies aligned with BABA have recently announced moves that will bring them even closer to the e-commerce giant; there are also indications these express companies are stepping up their own first- and last-mile investments at the behest of BABA.For the five carriers aligned with BABA, a belated push into ownership of first- and last-mile service will require an enormous increase in capital expenditures. The five carriers had combined capex of about 8.3 bn RMB in 2017; we estimate the push to acquire control of first- and last-mile capacity could require additional annual capex of 25 bn RMB or more over the next few years (BABA itself had CapEx of 29.8 bn RMB in its latest fiscal year). Such a dramatic increase in capital spending -- assuming it is mainly shouldered by the express companies -- will require significant, dilutive fundraising by these five express carriers over the next few years; we also anticipate initial returns on these investments will be very low.Alternatively, if it is BABA's private logistics subsidiary CN that does the heavy lifting, this would likely bring forward the timing of that company's IPO (it was valued at US$20 bn in a September 2017 funding round). We do not believe the expansion of first- and last-mile capacity is part of CN's projected total CapEx of 100 bn RMB between 2017-2021. The ultimate beneficiary of this costly expansion of express networks? Alibaba, of course. As a result of the expected push into first- and last-mile delivery, the e-commerce giant will likely end up with deeper reach and faster, more reliable delivery service. These improvements should allow it to retain its position as China's pre-eminent e-commerce company. The apparent asymmetry of expected capex and expected benefits from first- and last-mile investments -- express companies invest, BABA reaps the benefits -- suggests a pair trade: Long BABA against Short positions in China's express companies.

To match service levels offered by JD.com Inc (ADR) (JD US) and leading express carrier S.F. Holding Co Ltd (002352 CH), Alibaba Group Holding Ltd (BABA US) and its logistics partners are making a belated push to invest in first- and last-mile parcel delivery capacity. BABA and its partners have so far avoided making the large investments needed to control 100% of their parcel delivery networks. Instead of direct ownership of first- and last-mile assets, BABA has tried to rely upon the 'transparency' provided by its technologically sophisticated logistics subsidiary, CaiNiao Network (CN). But five years after BABA set up CN, JD.com's continued lead in logistics quality and logistics speed -- confirmed in private surveys of Chinese consumers -- seems to have convinced BABA and its partners that they must finally take the plunge.Battle lines in this coming logistics war have been drawn over the past year or so. JD.com established JD Logistics in April 2017, and the private company recently raised US$2.5 bn at a valuation of US$13.4 bn. SF Express -- China's largest express carrier by revenue -- already offers first- and last-mile delivery, and has shown a willingness to butt heads with BABA. The five smaller express companies aligned with BABA have recently announced moves that will bring them even closer to the e-commerce giant; there are also indications these express companies are stepping up their own first- and last-mile investments at the behest of BABA.For the five carriers aligned with BABA, a belated push into ownership of first- and last-mile service will require an enormous increase in capital expenditures. The five carriers had combined capex of about 8.3 bn RMB in 2017; we estimate the push to acquire control of first- and last-mile capacity could require additional annual capex of 25 bn RMB or more over the next few years (BABA itself had CapEx of 29.8 bn RMB in its latest fiscal year). Such a dramatic increase in capital spending -- assuming it is mainly shouldered by the express companies -- will require significant, dilutive fundraising by these five express carriers over the next few years; we also anticipate initial returns on these investments will be very low.Alternatively, if it is BABA's private logistics subsidiary CN that does the heavy lifting, this would likely bring forward the timing of that company's IPO (it was valued at US$20 bn in a September 2017 funding round). We do not believe the expansion of first- and last-mile capacity is part of CN's projected total CapEx of 100 bn RMB between 2017-2021. The ultimate beneficiary of this costly expansion of express networks? Alibaba, of course. As a result of the expected push into first- and last-mile delivery, the e-commerce giant will likely end up with deeper reach and faster, more reliable delivery service. These improvements should allow it to retain its position as China's pre-eminent e-commerce company. The apparent asymmetry of expected capex and expected benefits from first- and last-mile investments -- express companies invest, BABA reaps the benefits -- suggests a pair trade: Long BABA against Short positions in China's express companies.

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Hive Box Holdings / Equity Capital Markets

<ul>
<li>In this insight we provide an overview of Hive Box's business and its history</li>
<li>We then go into detail on key relationships &amp; investors, focusing on SF Holding</li>
<li>We end with some initial questions and what's up next in the IPO process</li>
</ul>


In this insight we provide an overview of Hive Box's business and its history
We then go into detail on key relationships &amp; investors, focusing on SF Holding
We end with some initial questions and what's up next in the IPO process


Hive Box Holdings Pre-IPO, Part 1: What They Do, History, Relationships, & What's Next

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Lalatech Holdings Co Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lalatech-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:36848:1" rel="noopener">Lalatech Holdings</a> is looking to raise about US$1bn in its upcoming HK IPO.</li>
<li>Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.</li>
<li>We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.</li>
</ul>



Lalatech Holdings is looking to raise about US$1bn in its upcoming HK IPO.
Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.


Lalatech Holdings Limited Pre-IPO - Refiling Updates - Continues to Improve, Valuation Gap Narrowing

<ul>
<li>In this note, we will look at the Asia Pacific IPO pipeline for 2024, following up with US ADRs, after having looked at HK, India, Japan and Korea earlier.</li>
<li>This list has been compiled on a best effort basis from tracking the company filings and through various other sources</li>
<li>The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.</li>
</ul>


In this note, we will look at the Asia Pacific IPO pipeline for 2024, following up with US ADRs, after having looked at HK, India, Japan and Korea earlier.
This list has been compiled on a best effort basis from tracking the company filings and through various other sources
The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.


Aequitas 2024 Asia IPO Pipeline - US ADRs

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lalatech-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:36848:1" rel="noopener">Lalatech Holdings Co Ltd (LALA HK)</a> is looking to raise about US$1bn in its upcoming HK IPO.</li>
<li>Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.</li>
<li>We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.</li>
</ul>



Lalatech Holdings Co Ltd (LALA HK) is looking to raise about US$1bn in its upcoming HK IPO.
Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.


Lalatech Holdings Pre-IPO - Refiling Updates - Growth and Profit Pickup but Valuation Gap Remains

Singapore

Global Logistic Properties Limited develops, owns and leases modern logistics facilities across China and Japan.  The Company's customers include global retailers and third party logistics companies. GLP offers various solutions to customers to help improve their supply chain efficiency and fulfill their strategic expansion goals.

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Global Logistic Properties (GLP SP)

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

As China's largest smart locker company Hive Box prepares for a potential IPO in Hong Kong, we are resurfacing this old insight to help readers...

Daniel Hellberg

Hive Box Holdings Pre-IPO, Part 1: What They Do, History, Relationships, & What's Next

Chinese smart locker operator Hive Box has filed to go public in Hong Kong. In this insight we offer an overview of its business, a corporate...

Tracking Traffic

Lalatech Holdings Limited Pre-IPO - Refiling Updates - Continues to Improve, Valuation Gap Narrowing

Lalatech Holdings is looking to raise about US$1bn in its upcoming HK IPO. In this note, we look at the updates from its most recent refiling.

Sumeet Singh

Aequitas 2024 Asia IPO Pipeline - US ADRs

In this note, we will look at the Asia Pacific IPO pipeline for 2024, following up with US ADRs, after having looked at HK, India, Japan and Korea...

Sumeet Singh

Lalatech Holdings Pre-IPO - Refiling Updates - Growth and Profit Pickup but Valuation Gap Remains

Lalatech Holdings Co Ltd (LALA HK) is looking to raise about US$1bn in its upcoming HK IPO. In this note we talk about the refiling updates.

Sumeet Singh

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52-week Range

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