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.

Equity Capital Markets

<div><p><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 the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007. JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-initiation-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:48279" rel="noopener">JD Logistics IPO Initiation: The Flow of Things</a>, we opined that JD Logistics' fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. In this note, we take a first look at JD Logistics' valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>

JD Logistics (JDL HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007. JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. In JD Logistics IPO Initiation: The Flow of Things, we opined that JD Logistics' fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. In this note, we take a first look at JD Logistics' valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.

<p><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 the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007. <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a> is the controlling shareholder with a 79.12% stake. The other shareholders include Carlyle Group, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, Sequoia Capital and Hillhouse Capital. JD Logistics has filed for a Hong Kong IPO to raise as much as $4 billion, according to press reports. </p><div class="content-highlight"><p>JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. JD Logistics should also benefit from favourable Chinese government policy support for developing integrated supply chain logistics services. Overall, we believe that JD Logistics fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. </p></div>

JD Logistics (JDL HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007. JD.com (HK) (9618 HK) is the controlling shareholder with a 79.12% stake. The other shareholders include Carlyle Group, Tencent Holdings (700 HK), Sequoia Capital and Hillhouse Capital. JD Logistics has filed for a Hong Kong IPO to raise as much as $4 billion, according to press reports. JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. JD Logistics should also benefit from favourable Chinese government policy support for developing integrated supply chain logistics services. Overall, we believe that JD Logistics fundamentals are attractive and remain well-placed to address consumers' demand for faster and more flexible supply chain logistics services. 

JD Logistics IPO Initiation: The Flow of Things

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>Twelve local persons tested positive for COVID-19 in Shanghai. The pandemic might begin to spread in the south of China.</li>
<li>Delivery companies’ competition is close to an end. Prices may rise significantly if some companies exit the market.</li>
<li>News about Tencent’s WeChat, QQ, and Music.</li>
</ul>


Twelve local persons tested positive for COVID-19 in Shanghai. The pandemic might begin to spread in the south of China.
Delivery companies’ competition is close to an end. Prices may rise significantly if some companies exit the market.
News about Tencent’s WeChat, QQ, and Music.


China Internet Weekly (25Jan2021): Community Locked Down in Shanghai, Delivery Companies Polarized

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

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<p>Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel <em>volume</em> growth remained strong in December, up 37% YoY. </p>
<p>Unfortunately, <em>pricing</em> remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. </p>
<p>Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021. </p>




Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel volume growth remained strong in December, up 37% YoY. 
Unfortunately, pricing remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. 
Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021. 

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation

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<p>In this note, we explain how authorities in China measure the development of the country's express parcel delivery industry using the China Express Development Index, or CEDI. </p>
<p>We believe CEDI is worth watching. Its December 2020 performance suggests sector growth is moderating, and that express companies must continue to invest aggressively to lift service levels. </p>
<p>CEDI's recent trends support our investment thesis for the sector, which is that pressure to consolidate is rising here in 2021. We believe <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a> may become an attractive acquisition target over the next 12 months; we rate its shares Buy. </p>




In this note, we explain how authorities in China measure the development of the country's express parcel delivery industry using the China Express Development Index, or CEDI. 
We believe CEDI is worth watching. Its December 2020 performance suggests sector growth is moderating, and that express companies must continue to invest aggressively to lift service levels. 
CEDI's recent trends support our investment thesis for the sector, which is that pressure to consolidate is rising here in 2021. We believe BEST Inc (BEST US) may become an attractive acquisition target over the next 12 months; we rate its shares Buy. 

How Chinese Authorities Measure the Development of the Express Sector, & Why It Matters to Investors

China

Yunda Holding Co Ltd operates as a holding company. The Company, through its subsidiaries, provides industrial investment, enterprise management, business consulting, car rental, technical development, information technology, and advertising services. Yunda Holding serves customers in China.

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Yunda Holding (002120 CH)

JD Logistics IPO: Valuation First Look

JD Logistics is seeking to raise up to $4 billion at a $40 billion valuation, according to press reports. We think that the rumoured IPO valuation...

Arun George

JD Logistics IPO Initiation: The Flow of Things

JD Logistics has filed for a Hong Kong IPO to raise as much as $4 billion, according to press reports. Overall, we believe that JD Logistics...

Arun George

China Internet Weekly (25Jan2021): Community Locked Down in Shanghai, Delivery Companies Polarized

Twelve local persons tested positive for COVID-19 in Shanghai. Delivery companies’ competition is close to an end. News about Tencent’s WeChat, QQ,...

Ming Lu

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation

Although express parcel volume growth remained strong in December, unit pricing was still weak, and we expect more companies to report losses in Q4...

Tracking Traffic

How Chinese Authorities Measure the Development of the Express Sector, & Why It Matters to Investors

Understanding how Chinese authorities measure the development of China's express industry can help investors better evaluate the segment and the...

Tracking Traffic

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