China/Asia TMT

Shawn Yang

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

Equity Bottom-Up

<ul>
<li>We expect JDL to report C1Q23 net revenue in-line with cons., and non-IFRS net margin lower than cons. by (0.5ppts). </li>
<li>Our FY23 revenue and net-profit forecasts are (5%) and (6%) below consensus, respectively. JDL’s key customers JD and Douyin are pushing new services that favor shipment via logistics competitors; </li>
<li>JDL’s key customers JD and Douyin are pushing new services that favor shipment via logistics competitors; We maintain JDL’s SELL rating and cut its TP to HK$ 9.2.</li>
</ul>


We expect JDL to report C1Q23 net revenue in-line with cons., and non-IFRS net margin lower than cons. by (0.5ppts). 
Our FY23 revenue and net-profit forecasts are (5%) and (6%) below consensus, respectively. JDL’s key customers JD and Douyin are pushing new services that favor shipment via logistics competitors; 
JDL’s key customers JD and Douyin are pushing new services that favor shipment via logistics competitors; We maintain JDL’s SELL rating and cut its TP to HK$ 9.2.


[JD Logistics, Inc. (2618 HK) Earnings Preview]: JDL Absent from JD and Douyin Strategies

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>With no changes made at the March rebalance, we are still stuck at 76 index constituents. And it's been a year later than originally planned to reach 80 index constituents.</li>
<li>We list 10 potential inclusions in June. Adding all 10 stocks will lead to around 5% one-way turnover, so there could be a mix of larger and smaller stocks added.</li>
<li>There will be at least 1x ADV to trade on nearly all inclusions. Short interest is over 4% of float on some stocks and there has been a recent jump.</li>
</ul>


With no changes made at the March rebalance, we are still stuck at 76 index constituents. And it's been a year later than originally planned to reach 80 index constituents.
We list 10 potential inclusions in June. Adding all 10 stocks will lead to around 5% one-way turnover, so there could be a mix of larger and smaller stocks added.
There will be at least 1x ADV to trade on nearly all inclusions. Short interest is over 4% of float on some stocks and there has been a recent jump.


Hang Seng Index Rebalance Preview: A Year Later Than Planned - 80 Members at Last?

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jingdong-property-inc" target="_blank" data-smartkarma-citation="entities:36871:1" rel="noopener">Jingdong Property (JDP HK)</a> is looking to raise about US$1bn in its upcoming Hong Kong IPO.</li>
<li>JD Property (JDP) develops and manages modern infrastructure, consisting primarily of logistics parks, as well as business parks and others in China and in Asia.</li>
<li>As of Dec 22, the firm’s portfolio of Modern Infrastructure Assets has a total AUM of RMB93.7bn, occupying a total gross floor area (GFA) of 23.3m sqm. </li>
</ul>



Jingdong Property (JDP HK) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
JD Property (JDP) develops and manages modern infrastructure, consisting primarily of logistics parks, as well as business parks and others in China and in Asia.
As of Dec 22, the firm’s portfolio of Modern Infrastructure Assets has a total AUM of RMB93.7bn, occupying a total gross floor area (GFA) of 23.3m sqm. 


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>One may presume that <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> moved their <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares received from their non-CCASS holdings of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. It does not tell us much else. </li>
<li>Allocation in the <a href="https://www.smartkarma.com/entities/s-m-entertainment-co" target="_blank" data-smartkarma-citation="entities:3500:1" rel="noopener">S.M.Entertainment Co (041510 KS)</a> partial Offer was 44.14%. With shares trading ~₩95k, that was a pretty good outcome. </li>
<li>
<a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> has asked the Japanese government to investigate YFO's alleged breaches of FEFTA. Expect YFO to say they did no wrong. Expect Toyo to complain about it. </li>
</ul>


One may presume that Prosus (PRX NA) moved their Meituan (3690 HK) shares received from their non-CCASS holdings of Tencent (700 HK). It does not tell us much else. 
Allocation in the S.M.Entertainment Co (041510 KS) partial Offer was 44.14%. With shares trading ~₩95k, that was a pretty good outcome. 

Toyo Construction (1890 JP) has asked the Japanese government to investigate YFO's alleged breaches of FEFTA. Expect YFO to say they did no wrong. Expect Toyo to complain about it. 


Last Week in Event SPACE: Meituan, S.M.Entertainment, Toyo, Mincor, JD.com, AAG

Travis Lundy

<ul>
<li>Two days ago, media reported <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> / <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> would split and possibly list several businesses. Last night Cainiao was reported as starting listing preparations.</li>
<li>Last night, <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> made two announcements it was proposing to spin off and list its <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0330/2023033002822.pdf" target="_blank" rel="noopener">JD Property</a> and <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0330/2023033002966.pdf" target="_blank" rel="noopener">JD Industrial</a> arms. This is NOT a spinoff war.</li>
<li>JD raised Series A and B for both companies. These were always going to be spins, like Health, Digits, and Logistics. JD Properties will be biggish.</li>
</ul>


Two days ago, media reported Alibaba Group (9988 HK) / Alibaba (ADR) (BABA US) would split and possibly list several businesses. Last night Cainiao was reported as starting listing preparations.
Last night, JD.com Inc. (9618 HK) made two announcements it was proposing to spin off and list its JD Property and JD Industrial arms. This is NOT a spinoff war.
JD raised Series A and B for both companies. These were always going to be spins, like Health, Digits, and Logistics. JD Properties will be biggish.


JD.com (9618 HK) Announces TWO Spin-Offs (That Were Always Going To Be Spinoffs)

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)

[JD Logistics, Inc. (2618 HK) Earnings Preview]: JDL Absent from JD and Douyin Strategies

We expect JDL to report C1Q23 net revenue in-line with cons., and non-IFRS net margin lower than cons. by (0.5ppts). We maintain JDL’s SELL rating...

Blue Lotus Research Institute

Hang Seng Index Rebalance Preview: A Year Later Than Planned - 80 Members at Last?

We highlight 10 potential adds in June. Adding all 10 stocks will result in one-way turnover of 5%, so fewer stocks (some large, some small) will...

Brian Freitas

JD Property Pre-IPO Tearsheet

Jingdong Property (JDP HK) is looking to raise about US$1bn in its upcoming Hong Kong IPO. JDP develops and manages modern infrastructure in China...

Clarence Chu

Last Week in Event SPACE: Meituan, S.M.Entertainment, Toyo, Mincor, JD.com, AAG

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

JD.com (9618 HK) Announces TWO Spin-Offs (That Were Always Going To Be Spinoffs)

JD.com has announced the proposed spinoff+listing of two subs in HK. No spinoff of shares to JD.com shareholders. Properties could be big....

Travis Lundy

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