Alpha-Centric ESG Research

Kyle Rudden

COVID-19 vaccines figure into Biden's recently-announced COVID-19 response plan, though with a clear emphasis on distribution versus development (as was Trump's focus). Biden's prioritisation of vaccine distribution – and the US$25 billion earmarked for it – is a gift for "cold chain" stocks."Cold chain" refers to a complex temperature-controlled supply chain that is mission-critical to the distribution of COVID-19 vaccines. Critical, because vaccines require consistent ultra-cold storage from manufacture to needle-stick, otherwise those expensive vaccines become medical waste.This Insight looks at cold chain stocks as an investment theme inherent in Biden's COVID-19 plan (see <a href="https://www.smartkarma.com/insights/biden-covid-19-response-plan-overview-of-its-inherent-investment-themes" target="_blank" data-smartkarma-citation="insights:45631" rel="noopener">Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes</a>). Although the cold chain is fragmented and largely privately-held, but there are opportunities in three areas:<ol>
<li>
Freight and Logistics: Most listed companies fall into this category, including both integrated cold chain freight and logistics stocks, as well as niche players in either of freight or logistics.</li>
<li>
Freezer Manufacturers: Ultra-cold freezer boxes and related industrial components of various shapes and sizes are needed for the cold chain to function. Several stocks serve this segment.</li>
<li>
Specialty Chemicals: Dry ice gets all the headlines, as massive amounts are needed but supply is short, but other specialty chemicals and industrial gases are also needed in the cold chain.</li>
</ol>

COVID-19 vaccines figure into Biden's recently-announced COVID-19 response plan, though with a clear emphasis on distribution versus development (as was Trump's focus). Biden's prioritisation of vaccine distribution – and the US$25 billion earmarked for it – is a gift for "cold chain" stocks."Cold chain" refers to a complex temperature-controlled supply chain that is mission-critical to the distribution of COVID-19 vaccines. Critical, because vaccines require consistent ultra-cold storage from manufacture to needle-stick, otherwise those expensive vaccines become medical waste.This Insight looks at cold chain stocks as an investment theme inherent in Biden's COVID-19 plan (see Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes). Although the cold chain is fragmented and largely privately-held, but there are opportunities in three areas:

Freight and Logistics: Most listed companies fall into this category, including both integrated cold chain freight and logistics stocks, as well as niche players in either of freight or logistics.

Freezer Manufacturers: Ultra-cold freezer boxes and related industrial components of various shapes and sizes are needed for the cold chain to function. Several stocks serve this segment.

Specialty Chemicals: Dry ice gets all the headlines, as massive amounts are needed but supply is short, but other specialty chemicals and industrial gases are also needed in the cold chain.


Biden COVID-19 Response Plan: Cold Chain Transportation and Logistics Stocks Benefit

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>S&amp;P DJI <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20221027-1457121/1457121_5twtr-4xpo.pdf" target="_blank" rel="noopener">announced</a> late 27 October 2022 that <a href="https://www.smartkarma.com/entities/twitter-inc" target="_blank" data-smartkarma-citation="entities:667:1" rel="noopener">Twitter Inc (TWTR US)</a> would be deleted from the S&amp;P500, replaced by <a href="https://www.smartkarma.com/entities/arch-capital-group-ltd" target="_blank" data-smartkarma-citation="entities:2901:1" rel="noopener">Arch Capital (ACGL US)</a>. </li>
<li>RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and <a href="https://www.smartkarma.com/entities/unifi-inc" target="_blank" data-smartkarma-citation="entities:17531:1" rel="noopener">Unifi Inc (UFI US)</a> would get deleted from the 600.</li>
<li>This insight presents the issues and the flows, which are not to be separated. </li>
</ul>


S&amp;P DJI announced late 27 October 2022 that Twitter Inc (TWTR US) would be deleted from the S&amp;P500, replaced by Arch Capital (ACGL US). 
RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and Unifi Inc (UFI US) would get deleted from the 600.
This insight presents the issues and the flows, which are not to be separated. 


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$174m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. We covered various aspects of the deal in our earlier notes, <a href="https://www.smartkarma.com/compose/insight/59814/ANE%20Logistics%20Pre-IPO%20-%20Margins%20Expanding%20but%20Appears%20to%20Be%20Falling%20Behind" target="_blank" rel="noopener">ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind</a> and <a href="https://www.smartkarma.com/insights/ane-logistics-pre-ipo-phip-updates-underlying-growth-is-far-from-clear" target="_blank" rel="noopener">ANE Logistics Pre-IPO - PHIP updates - Underlying growth is far from clear</a>.  In this note, we will talk about updates since our last note and valuations.

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$174m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. We covered various aspects of the deal in our earlier notes, ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind and ANE Logistics Pre-IPO - PHIP updates - Underlying growth is far from clear.  In this note, we will talk about updates since our last note and valuations.

ANE Logistics IPO - Weird Disclosures Continue

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. We covered various aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/ane-logistics-pre-ipo-margins-expanding-but-appears-to-be-falling-behind" target="_blank" rel="noopener">ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind</a>. In this note we will talk about the updated financials from the PHIP.

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies. ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. We covered various aspects of the deal in our earlier note ANE Logistics Pre-IPO - Margins expanding but appears to be falling behind. In this note we will talk about the updated financials from the PHIP.

ANE Logistics Pre-IPO - PHIP Updates - Underlying Growth Is Far from Clear

AlphaSituations-Event/Catalyst Driven Research, AlphaSituations

Robert Sassoon

AlphaSituations-Event/Catalyst Driven Research

AlphaSituations

Since its establishment, AlphaSituations has delivered a track record of outperformance with a hit rate of winners of more than 70% of its portfolio of ideas generating annualized average returns of 20%. In January 2022, AlphaSituations was contracted by Water Tower Research, an investor engagement and stakeholder communication platform to provide coverage of Special Situations

Back on January 5, 2021, we published an insight highlighting the proposed break-up of <a href="https://www.smartkarma.com/entities/xpo-logistics-inc" target="_blank" data-smartkarma-citation="entities:12017:1" rel="noopener">Xpo Logistics (XPO US) </a>- SpinTalk: Multiple Envy Propels XPO Logistics' Break-Up Move To Get Its Mojo Back - via the separation of its logistics operations from its transportation business. This corporate event is now just a few days away and will be executed via  the tax-free spin-off of the logistics business GXO Logistics (GXO US) on August 2, 2021, effected through a 1-for-1 distribution of new GXO shares to XPO shareholders. With the separating companies having begun When-Issued trading as of July 22, 2021,  we believe this to be an opportune to review and update our value assessment of the upcoming  event. On a pre-spin basis , our updated assessment values  XPO at $163-$197, not too far from our first stab of $169-$186 made in January. This represents  an increase of 16% to 40% on the prevailing share price of $141.03,  which itself represents an 19% accretion from the $118.92 price printed in our January insight. However, with only one trading left before the separation becomes effective, the focus should be on the post-spin entities when they begin trading regular on Monday. While the XPO share price has reacted well to the break-up strategy, we believe there is still more value to be had in both sides of the spin-off as we lay out our thesis below.

Back on January 5, 2021, we published an insight highlighting the proposed break-up of Xpo Logistics (XPO US) - SpinTalk: Multiple Envy Propels XPO Logistics' Break-Up Move To Get Its Mojo Back - via the separation of its logistics operations from its transportation business. This corporate event is now just a few days away and will be executed via  the tax-free spin-off of the logistics business GXO Logistics (GXO US) on August 2, 2021, effected through a 1-for-1 distribution of new GXO shares to XPO shareholders. With the separating companies having begun When-Issued trading as of July 22, 2021,  we believe this to be an opportune to review and update our value assessment of the upcoming  event. On a pre-spin basis , our updated assessment values  XPO at $163-$197, not too far from our first stab of $169-$186 made in January. This represents  an increase of 16% to 40% on the prevailing share price of $141.03,  which itself represents an 19% accretion from the $118.92 price printed in our January insight. However, with only one trading left before the separation becomes effective, the focus should be on the post-spin entities when they begin trading regular on Monday. While the XPO share price has reacted well to the break-up strategy, we believe there is still more value to be had in both sides of the spin-off as we lay out our thesis below.

SpinTalk: More Value To Be Had In Now Imminent XPO Logistics Break-Up

United States

XPO Logistics, Inc. provides logistics services. The Company offers expedited airfreight forwarding, warehousing management, drayage, freight brokerage, intermodal, transportation, and reverse logistics. XPO Logistics serves customers throughout North America.

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Xpo Logistics (XPO US)

Biden COVID-19 Response Plan: Cold Chain Transportation and Logistics Stocks Benefit

Biden's COVID-19 response plan earmarks US$25 billion to vaccines, but with a twist. His emphasis is vaccine distribution, not development. That...

Kyle Rudden

Ad Hoc S&P500 Change on Twitter Deletion

S&P DJI Indices are implementing a couple of changes Monday and Tuesday as Twitter gets the boot on Monday, and there are shifts in the 400/600...

Travis Lundy

ANE Logistics IPO - Weird Disclosures Continue

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$174m in its Hong Kong IPO. The...

Sumeet Singh

ANE Logistics Pre-IPO - PHIP Updates - Underlying Growth Is Far from Clear

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO.

Sumeet Singh

SpinTalk: More Value To Be Had In Now Imminent XPO Logistics Break-Up

XPO may have got its mojo back since first announcing the possible break-up of the company in early 2020, but with the break-up now imminent, we...

Robert Sassoon

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