Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August</li>
<li>A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and <em>de minimus</em> imports; tighter enforcement or new legislation could soon follow</li>
<li>It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model</li>
</ul>


Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August
A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and de minimus imports; tighter enforcement or new legislation could soon follow
It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model


New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

<ul>
<li>The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers</li>
<li>The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers</li>
<li>It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models </li>
</ul>


The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers
The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers
It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models 


The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

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.

Equity Capital Markets

Weilong Delicious Global Holdi / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weilong-delicious-global-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33378:1" rel="noopener">Weilong Delicious Global (9985 HK)</a>, a spicy snack food company in China, raised around US$130m in its Hong Kong IPO in Dec 2022.</li>
<li>According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



Weilong Delicious Global (9985 HK), a spicy snack food company in China, raised around US$130m in its Hong Kong IPO in Dec 2022.
According to F&amp;S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories
In this note, we will talk about the lock-up dynamics and updates since our last note.


Weilong Delicious Global IPO Lock-Up - Now for the Re-IPO with 10x Increase in Free Float

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Positive surprises in profitability during Q1 2023 failed to reverse the long-term decline of Chinese e-commerce, possibly due to market recognition of the temporary impact of cost-cutting and monetization efforts.</li>
<li>In our opinion, robust growth in GMV is fundamentally essential to reverse the long-term downward trend of the Chinese e-commerce sector.</li>
<li>Chinese e-commerce sector no longer discloses GMV, but Express delivery volume indicates a 20% decline in parcel volumes compared to 2021, potentially reflecting a decrease in GMV.</li>
</ul>


Positive surprises in profitability during Q1 2023 failed to reverse the long-term decline of Chinese e-commerce, possibly due to market recognition of the temporary impact of cost-cutting and monetization efforts.
In our opinion, robust growth in GMV is fundamentally essential to reverse the long-term downward trend of the Chinese e-commerce sector.
Chinese e-commerce sector no longer discloses GMV, but Express delivery volume indicates a 20% decline in parcel volumes compared to 2021, potentially reflecting a decrease in GMV.


Event-Driven

<ul>
<li>Tencent has been busy distributing shares in some of its investments over the past two years, with JD.com’s distribution announced in 2021 and Meituan’s in 2022.</li>
<li>In our earlier note in 2022, <a href="https://www.smartkarma.com/insights/tencent-investee-selldown-the-us-120bn-global-overhang" target="_blank" data-smartkarma-citation="insights:81153" rel="noopener">Tencent Investee Selldown - The US$120bn Global Overhang</a>, we had looked at its overall investment portfolio.</li>
<li>With two of its large investments spun-out, we now re-look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how. </li>
</ul>


Tencent has been busy distributing shares in some of its investments over the past two years, with JD.com’s distribution announced in 2021 and Meituan’s in 2022.
In our earlier note in 2022, Tencent Investee Selldown - The US$120bn Global Overhang, we had looked at its overall investment portfolio.
With two of its large investments spun-out, we now re-look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how. 


Tencent Investee Selldown - JD.com Done, Meituan Done, Two More Still Left

China

JD.com, Inc. is an online direct sales company in China. The Company offers a wide selection of products through its website and mobile applications. JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (9618 HK)

New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

We offer an update on a fascinating criminal case set to go to trial next month, plus we outline big risks posed by criticisms of Temu and SHEIN by...

Tracking Traffic

The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

Thie story of fake US postage being used to distribute Chinese goods to US consumers isn't just a fascinating story -- it could potentially have...

Tracking Traffic

Weilong Delicious Global IPO Lock-Up - Now for the Re-IPO with 10x Increase in Free Float

Weilong Delicious Global (9985 HK), a spicy snack food company in China, raised around US$130m in its Hong Kong IPO in Dec 2022. In this note, we...

Sumeet Singh

China E-Commerce: Is Still a Dead Cat

Positive surprises in profitability in Q1 failed to reverse the long-term decline of Chinese e-commerce, possibly due to market recognition of the...

Oshadhi Kumarasiri

Tencent Investee Selldown - JD.com Done, Meituan Done, Two More Still Left

Tencent has been distributing shares in some of its investments over the past two years. In this note, we look at which of its remaining investee...

Sumeet Singh

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