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>JD has more exclusive users than Pinduoduo (PDD) and Alibaba (BABA)’s Taobao.</li>
<li>JD runs an asset-light strategy in the fresh food market.</li>
<li>We believe revenue will grow by 22% in 2021, compared to 28% in 2020.</li>
<li>We still believe the stock price is a little bit high.</li>
</ul>


JD has more exclusive users than Pinduoduo (PDD) and Alibaba (BABA)’s Taobao.
JD runs an asset-light strategy in the fresh food market.
We believe revenue will grow by 22% in 2021, compared to 28% in 2020.
We still believe the stock price is a little bit high.


JD.com (JD): Found More Exclusive Advantages, But Need More Reasonable Price

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Kuaishou (1024 HK)’s vice president of community content was arrested for taking bribes.</li>
<li>Alibaba (BABA)’s public relation manager was rumored to jump off the office building in Beijing.</li>
<li>Suning Commerce (002024 CN)’s founder will sell his shareholdings.</li>
</ul>


Kuaishou (1024 HK)’s vice president of community content was arrested for taking bribes.
Alibaba (BABA)’s public relation manager was rumored to jump off the office building in Beijing.
Suning Commerce (002024 CN)’s founder will sell his shareholdings.


China Internet Weekly (Feb 22): Kuaishou VP Arrested, BABA Manager Dead “by Accident”, & Q4 Results

Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo's (PDD US)</a> share price skyrocketed 6x in the last 12 months and 2.2x since the regulators released the anti-monopoly guidelines (AML) and opened an investigation on Alibaba on 10 November 2020. We believe investors flocked to PDD as they interpreted <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group's (BABA US)</a> loss as PDD's gain. The current price level implies a 54% Price to GMV premium to Alibaba.There are five reasons why I would consider cashing in the chips and look for better value in Alibaba: 1) Better operating metrics2) Cheaper valuations3) Greater operating efficiency4) PDD's execution risk5) Is PDD really immune from AML?

Pinduoduo's (PDD US) share price skyrocketed 6x in the last 12 months and 2.2x since the regulators released the anti-monopoly guidelines (AML) and opened an investigation on Alibaba on 10 November 2020. We believe investors flocked to PDD as they interpreted Alibaba Group's (BABA US) loss as PDD's gain. The current price level implies a 54% Price to GMV premium to Alibaba.There are five reasons why I would consider cashing in the chips and look for better value in Alibaba: 1) Better operating metrics2) Cheaper valuations3) Greater operating efficiency4) PDD's execution risk5) Is PDD really immune from AML?  

Pinduoduo (PDD US): Know When to Fold, Know When to Run

Alpha-Centric ESG Research

Kyle Rudden

In <a href="https://www.smartkarma.com/insights/carbon-footprint-of-freight-transportation-and-logistics-and-other-esg-issues" target="_blank" data-smartkarma-citation="insights:48581" rel="noopener">Carbon Footprint of Freight Transportation and Logistics and Other ESG Issues</a>, I addressed the most material aspects of global freight and logistics – specifically, its carbon footprint and future direction thereof. It also conveyed optimism, a silver lining around a mostly negative ESG topic.<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 part of that silver lining, an unequivocal bright spot, and a company that is more "solution" than "problem" in what is otherwise a problematic space from a sustainability/ESG perspective. JDL is a clear leader in the "greening" and decarbonisation of global supply chains.This is especially important given JDL's China-focus, one of the two largest logistics markets worth nearly US$3 trillion (and growing) of the US$10-12 trillion global total. Whilst an economic boon, the yang that goes with that yin is GHG emissions, and China needs companies like JDL.

In Carbon Footprint of Freight Transportation and Logistics and Other ESG Issues, I addressed the most material aspects of global freight and logistics – specifically, its carbon footprint and future direction thereof. It also conveyed optimism, a silver lining around a mostly negative ESG topic.JD Logistics (JDL HK) is part of that silver lining, an unequivocal bright spot, and a company that is more "solution" than "problem" in what is otherwise a problematic space from a sustainability/ESG perspective. JDL is a clear leader in the "greening" and decarbonisation of global supply chains.This is especially important given JDL's China-focus, one of the two largest logistics markets worth nearly US$3 trillion (and growing) of the US$10-12 trillion global total. Whilst an economic boon, the yang that goes with that yin is GHG emissions, and China needs companies like JDL.

JD Logistics: More Solution Than Problem in a Problematic ESG Space

The collective carbon footprint of global freight transportation and logistics is utterly massive, and growing. Freight and logistics accounts for 10-15% of the world's greenhouse gas (GHG) emissions, or 3.4-5.1 billion tonnes of carbon dioxide (CO2) per year of the world's 34 billion-tonne total. Current GHG mitigation and decarbonisation policies will be enough to fully offset GHG emissions from expected growth in freight transportation and logistics. Projections suggest a 60-80% increase in emissions by 2050, when a decrease of 55-80% is needed to meet the Paris Agreement goals.Climate impacts of trade growth are compounded by how it will shift freight movement from North Atlantic to Indian Ocean corridors, increasing average distances 12%. More critical is the local leg; 10% by tonne-kilometres but 30% of GHGs (inland modes like trucking are more GHG-intensive).On a company level, carbon footprint – present and future – depends on several things. Aside from macro issues like regional fuel mix and climate policies, two big factors are: 1) a company's specific function (e.g., freight trains vs. logistics software), and 2) its decarbonisation initiatives.The collective carbon footprint is a major ESG issue but we should not apply a broad-brush. Freight and logistics companies are vital to the economy and deliver life-critical goods like medication and food. Moreover, companies like <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a> – are leading a "greening" of supply chains.This is an important ESG issue to watch, but not an "exclusionary screen" by any means.

The collective carbon footprint of global freight transportation and logistics is utterly massive, and growing. Freight and logistics accounts for 10-15% of the world's greenhouse gas (GHG) emissions, or 3.4-5.1 billion tonnes of carbon dioxide (CO2) per year of the world's 34 billion-tonne total. Current GHG mitigation and decarbonisation policies will be enough to fully offset GHG emissions from expected growth in freight transportation and logistics. Projections suggest a 60-80% increase in emissions by 2050, when a decrease of 55-80% is needed to meet the Paris Agreement goals.Climate impacts of trade growth are compounded by how it will shift freight movement from North Atlantic to Indian Ocean corridors, increasing average distances 12%. More critical is the local leg; 10% by tonne-kilometres but 30% of GHGs (inland modes like trucking are more GHG-intensive).On a company level, carbon footprint – present and future – depends on several things. Aside from macro issues like regional fuel mix and climate policies, two big factors are: 1) a company's specific function (e.g., freight trains vs. logistics software), and 2) its decarbonisation initiatives.The collective carbon footprint is a major ESG issue but we should not apply a broad-brush. Freight and logistics companies are vital to the economy and deliver life-critical goods like medication and food. Moreover, companies like JD Logistics (JDL HK) – are leading a "greening" of supply chains.This is an important ESG issue to watch, but not an "exclusionary screen" by any means.

Carbon Footprint of Freight Transportation and Logistics and Other ESG Issues

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)

JD.com (JD): Found More Exclusive Advantages, But Need More Reasonable Price

JD has more exclusive users than Pinduoduo and Alibaba’s Taobao. JD runs an asset-light strategy in the fresh food market. We still believe the...

Ming Lu

China Internet Weekly (Feb 22): Kuaishou VP Arrested, BABA Manager Dead “by Accident”, & Q4 Results

Kuaishou’s vice president was arrested for taking bribes. Alibaba’s manager was rumored to jump off the office building. Suning Commerce’s founder...

Ming Lu

Pinduoduo (PDD US): Know When to Fold, Know When to Run

Pinduoduo's (PDD US) share price jumped 2.2x since last November. The company will have a tough time meeting lofty consensus expectations. Rotate...

Mitchell Kim

JD Logistics: More Solution Than Problem in a Problematic ESG Space

JD Logistics is more "solution" than "problem" in what is a problematic space for the environment; a clear leader in the "greening" and...

Kyle Rudden

Carbon Footprint of Freight Transportation and Logistics and Other ESG Issues

The carbon footprint of global freight and logistics is large, growing, and a source of ESG risk for investors. Fortunately, firms like JD...

Kyle Rudden

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