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

Thematic (Sector/Industry)

<ul>
<li>2618.HK/002352.CH: Cainiao launching its own national express delivery network (-/-)</li>
<li>3690.HK/PDD: Meituan planning to launch “Summer War” in community group buying (-/-)</li>
<li>BEKE: Beike is planning to extend business to real estate upstream, exploiting extra value beyond new home sales channel(-)</li>
</ul>


2618.HK/002352.CH: Cainiao launching its own national express delivery network (-/-)
3690.HK/PDD: Meituan planning to launch “Summer War” in community group buying (-/-)
BEKE: Beike is planning to extend business to real estate upstream, exploiting extra value beyond new home sales channel(-)


China TMT Update-2618.HK/2352.CH/3690.HK/PDD/BEKE-Cainiao Launching Express Delivery Network

Equity Capital Markets

J&T Global Express  / Equity Capital Markets

<ul>
<li>J&amp;T’s China growth will slow from a lack of (1) M&amp;A targets, and (2) cash to sustain a price war. SEA’s growth will slow, and profit margin decline due to</li>
<li> (1) Shopee in-sourcing of high-profit parcels(2) PE-backed rivals using price wars to gain market share. Lower penetration of China supply-chain platforms will stunt J&amp;T’s growth in New Markets, we expect.</li>
<li>In our base case we value J&amp;T at US$ 10 bn, which is (25%) vs. J&amp;T’s valuation in its latest round of funding.</li>
</ul>


J&amp;T’s China growth will slow from a lack of (1) M&amp;A targets, and (2) cash to sustain a price war. SEA’s growth will slow, and profit margin decline due to
 (1) Shopee in-sourcing of high-profit parcels(2) PE-backed rivals using price wars to gain market share. Lower penetration of China supply-chain platforms will stunt J&amp;T’s growth in New Markets, we expect.
In our base case we value J&amp;T at US$ 10 bn, which is (25%) vs. J&amp;T’s valuation in its latest round of funding.


Blue Lotus IPO Outlook/J&T Express: Cash Crunch as Prices Slump, Overseas Volume Ramps

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>In May, average pricing fell again Y/Y, and volume growth moderated somewhat vs April</li>
<li>We look forward to learning more about J&amp;T Global Express IPO and its path to profits</li>
<li>Check out the weird China-US postage fraud case and YTD share performance</li>
</ul>


In May, average pricing fell again Y/Y, and volume growth moderated somewhat vs April
We look forward to learning more about J&amp;T Global Express IPO and its path to profits
Check out the weird China-US postage fraud case and YTD share performance


Monthly Express Tracker | ASPs Down Again | Volume Growth Moderates | J&T Express IPO | (June 2023)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/j-t-global-express" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1936374D CH)</a>, a leading express delivery business in Southeast Asia and China has filed for a HKEx IPO to raise US$1 billion, according to press reports.   </li>
<li>In <a href="https://www.smartkarma.com/insights/j-t-global-express-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:104964" rel="noopener">J&amp;T Global Express IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on organic revenue decline in SEA/China, deteriorating contract liabilities, SEA margin pressure, high cash burn and weak balance sheet.</li>
</ul>



J&amp;T Global Express (1936374D CH), a leading express delivery business in Southeast Asia and China has filed for a HKEx IPO to raise US$1 billion, according to press reports.   
In J&amp;T Global Express IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on organic revenue decline in SEA/China, deteriorating contract liabilities, SEA margin pressure, high cash burn and weak balance sheet.


<ul>
<li>Previously, we criticized CJ Logistics as unfocused, pursuing deals in low-margin segments around the world as if to fill a logistics 'Bingo!' card rather than in-line with a rational strategy</li>
<li>In recent years, investors have punished the company's shares, which have fallen by more than half since reaching a high of over 184,000 won per share in March 2021. </li>
<li>However, with management de-emphasizing its Global segment and focusing instead on the more promising Parcel / E-commerce line of business, there is cause for optimism, in our view</li>
</ul>


Previously, we criticized CJ Logistics as unfocused, pursuing deals in low-margin segments around the world as if to fill a logistics 'Bingo!' card rather than in-line with a rational strategy
In recent years, investors have punished the company's shares, which have fallen by more than half since reaching a high of over 184,000 won per share in March 2021. 
However, with management de-emphasizing its Global segment and focusing instead on the more promising Parcel / E-commerce line of business, there is cause for optimism, in our view


Catching Up With CJ Logistics (000120 KS): With Shares Beaten Down, Management Forced to Refocus

China

S.F. Holding Co., Ltd operates as a holding company. The Company, through its subsidiaries, provides logistics, order tracking, supply chain management, and warehousing services. S.F. Holding operates worldwide.

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S.F. Holding (002352 CH)

China TMT Update-2618.HK/2352.CH/3690.HK/PDD/BEKE-Cainiao Launching Express Delivery Network

2618.HK/352.CH: Cainiao launching own national express delivery network；3690.HK/PDD: Meituan planning to launch “Summer War” in CGB；BEKE: Beike is...

Blue Lotus Research Institute

Blue Lotus IPO Outlook/J&T Express: Cash Crunch as Prices Slump, Overseas Volume Ramps

We expect that J&T’s China and SEA’s growth will slow down. we value J&T at US$ 10 bn, which is (25%) vs. J&T’s valuation in its latest round of...

Blue Lotus Research Institute

Monthly Express Tracker | ASPs Down Again | Volume Growth Moderates | J&T Express IPO | (June 2023)

In May, pricing weakened and volume growth moderated; we expect these two trends to hurt Q2 results. We also believe the planned J&T Global Express...

Tracking Traffic

J&T Global Express IPO: The Bear Case

The key elements of the bear case rest on organic revenue decline in SEA/China, deteriorating contract liabilities, SEA margin pressure, high cash...

Arun George

Catching Up With CJ Logistics (000120 KS): With Shares Beaten Down, Management Forced to Refocus

In this insight we check on CJ Logistics' recent financial performance. Management has de-emphasized the Global segment and put more resources into...

Tracking Traffic

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