HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Even after the 28% surge in share price since the 1H24 result, <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> still deserves a look as fundamentals have improved, especially with better cost control.</li>
<li>JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.</li>
<li>We like its lower reliance on <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.</li>
</ul>


Even after the 28% surge in share price since the 1H24 result, JD Logistics (2618 HK) still deserves a look as fundamentals have improved, especially with better cost control.
JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.
We like its lower reliance on JD.com (9618 HK) and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.


JD Logistics (2618 HK): There Are More Rooms

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.

<ul>
<li>Great Wall revenue increased 19% YoY and net profit increased by 109% YoY in the first three quarters.</li>
<li>Seres revenue increased by 539% YoY in the first three quarters with sales volume up by 105% YoY.</li>
<li>JD cooperates with competitors, AliPay and Alibaba, in online payment and logistics.</li>
</ul>


Great Wall revenue increased 19% YoY and net profit increased by 109% YoY in the first three quarters.
Seres revenue increased by 539% YoY in the first three quarters with sales volume up by 105% YoY.
JD cooperates with competitors, AliPay and Alibaba, in online payment and logistics.


China Consumption Weekly (4 Oct 2024): Seres, Great Wall Motor, JD, Nongfu, Caocao, Hozon

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.</li>
<li>In mid-June 2024, we had two expected ADDs and DELs for the September 2024 index rebal event and they remain unchanged even after the end of the reference period.</li>
<li>However, our capping flow expectations continue to change as the pro-forma post-rebalance weights change with share prices. In this insight, we have provided our latest flow estimates.</li>
</ul>


The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.
In mid-June 2024, we had two expected ADDs and DELs for the September 2024 index rebal event and they remain unchanged even after the end of the reference period.
However, our capping flow expectations continue to change as the pro-forma post-rebalance weights change with share prices. In this insight, we have provided our latest flow estimates.


Quiddity Leaderboard HSCEI Sep 24: Final Ranks and Updated Flow Expectations

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>In Q423 JD Logistics booked 10% top-line growth &amp; solid margin improvement</li>
<li>We analyze the impacts of JD.com &amp; Deppon Logistics on JD Logistics' Q423</li>
<li>Given still-low profitability, JD Logistics does not appear cheap, in our view</li>
</ul>


In Q423 JD Logistics booked 10% top-line growth &amp; solid margin improvement
We analyze the impacts of JD.com &amp; Deppon Logistics on JD Logistics' Q423
Given still-low profitability, JD Logistics does not appear cheap, in our view


Analyzing the Roles Parent JD.com & Subsidiary Deppon Played in JD Logistics' Q423 Results

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>China consumption shows rebounding demand following appreciation in asset values and home appliance subsidies. A record number of parcels were delivered last week, while home appliance sales grew rapidly;</li>
<li>We’ve raised 4Q estimates for online shopping growth given the recent demand trends which we expect to sustain through the quarter, so long as stimulus remains forthcoming;</li>
<li>JD and BABA remain our top ecommerce picks given their exposure to recent home appliance subsidies, as well as benefiting from a longer-term improvement in consumer sentiment.</li>
</ul>


China consumption shows rebounding demand following appreciation in asset values and home appliance subsidies. A record number of parcels were delivered last week, while home appliance sales grew rapidly;
We’ve raised 4Q estimates for online shopping growth given the recent demand trends which we expect to sustain through the quarter, so long as stimulus remains forthcoming;
JD and BABA remain our top ecommerce picks given their exposure to recent home appliance subsidies, as well as benefiting from a longer-term improvement in consumer sentiment.


Old E-Commerce Names Are The Biggest Winners of New Stimulus

China

JD Logistics, Inc. offers logistics services. The Company provides cargo transportation, cargo distribution, warehousing, and other services. JD Logistics is located in China.

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JD Logistics (2618 HK)