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

JD Health International  / Equity Bottom-Up

<ul>
<li>The YoY growth rate of product revenue accelerated in 2H21, compared to 1H21.</li>
<li>In China, many cities are locked down; therefore, we believe people need online medical shopping.</li>
<li>However, the stock is overvalued compared with other online and offline medical stores.</li>
</ul>


The YoY growth rate of product revenue accelerated in 2H21, compared to 1H21.
In China, many cities are locked down; therefore, we believe people need online medical shopping.
However, the stock is overvalued compared with other online and offline medical stores.


JD Health (6618 HK): Revenue Accelerated in 2H21, Demand from Lockdown, But Overvalued

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> reported results on Monday. Revenue grew 60.7% YoY to RMB17.0bn (vs consensus RMB14.9bn) while OP losses expanded to RMB808m from RMB48m a year ago.</li>
<li>Similar to 1H2021, huge share-based payment expenses were the reason for increase in Operating losses, excl. these, JDH made a healthy OP of RMB1.8bn, an OPM of 10.4%.</li>
<li>JDH’s online healthcare business is still at an early stage and the company has taken several initiatives to explore more opportunities and capitalise on digital transformation in the healthcare sector.</li>
</ul>



JD Health (6618 HK) reported results on Monday. Revenue grew 60.7% YoY to RMB17.0bn (vs consensus RMB14.9bn) while OP losses expanded to RMB808m from RMB48m a year ago.
Similar to 1H2021, huge share-based payment expenses were the reason for increase in Operating losses, excl. these, JDH made a healthy OP of RMB1.8bn, an OPM of 10.4%.
JDH’s online healthcare business is still at an early stage and the company has taken several initiatives to explore more opportunities and capitalise on digital transformation in the healthcare sector.


JD Health 2H2021: Healthy Results with More Than 60% Top Line Growth

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>
<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> has been able to sustain its relative market share gains, in Chinese online retail sales, over the past two years, despite increased competitive pressure.</li>
<li>Recent weakness in its margin progression trajectory has cast doubts on its ability to realise its potential for long-term margin expansion.</li>
<li>With net cash at 31% of its market cap, relative valuation levels seem attractive.</li>
</ul>



JD.com Inc. (9618 HK) has been able to sustain its relative market share gains, in Chinese online retail sales, over the past two years, despite increased competitive pressure.
Recent weakness in its margin progression trajectory has cast doubts on its ability to realise its potential for long-term margin expansion.
With net cash at 31% of its market cap, relative valuation levels seem attractive.


JD.com: Can Sustained Market Share Gains Be Transferred into Sustained Margin Progression?

Ping An Healthcare and Technology / Equity Bottom-Up

<ul>
<li>Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.</li>
<li>On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.</li>
<li>The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.</li>
</ul>


Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.
On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.
The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.


Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.</li>
<li>From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.</li>
<li>Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.</li>
</ul>


Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.
From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.
Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.


Hong Kong: Where Have Shorts Increased & Decreased?

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

JD Health (6618 HK): Revenue Accelerated in 2H21, Demand from Lockdown, But Overvalued

The growth rate of revenue accelerated in 2H21. In China, many cities are locked down, so we believe people need online medical shopping. However,...

Ming Lu

JD Health 2H2021: Healthy Results with More Than 60% Top Line Growth

. Revenue grew 60.7% YoY to RMB17.0bn (vs consensus RMB14.9bn) while adjusted OPM was 10.4% excluding share-based expenses. The company has taken...

Shifara Samsudeen, ACMA, CGMA

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

It appears that Ping An is trying to downplay the difficulty in transitioning to a new strategy. 2H2021 disclosures offer a large no. of...

Shifara Samsudeen, ACMA, CGMA

Hong Kong: Where Have Shorts Increased & Decreased?

From 31 Jan to 4 March, most shorted stocks are Tencent, China Merchants Bank, AIA Group, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JD Health (6618 HK): Revenue Accelerated in 2H21, Demand from Lockdown, But Overvalued

The growth rate of revenue accelerated in 2H21. In China, many cities are locked down, so we believe people need online medical shopping. However,...

Ming Lu

JD Health 2H2021: Healthy Results with More Than 60% Top Line Growth

. Revenue grew 60.7% YoY to RMB17.0bn (vs consensus RMB14.9bn) while adjusted OPM was 10.4% excluding share-based expenses. The company has taken...

Shifara Samsudeen, ACMA, CGMA

JD.com: Can Sustained Market Share Gains Be Transferred into Sustained Margin Progression?

In this insight, we analyse relative market share changes, key operational drivers, longer-term margin expansion trends, and take an updated look...

Wium Malan, CFA

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

It appears that Ping An is trying to downplay the difficulty in transitioning to a new strategy. 2H2021 disclosures offer a large no. of...

Shifara Samsudeen, ACMA, CGMA

Hong Kong: Where Have Shorts Increased & Decreased?

From 31 Jan to 4 March, most shorted stocks are Tencent, China Merchants Bank, AIA Group, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi...

Brian Freitas