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 Capital Markets

<ul>
<li>SF Holding differs from its Chinese peers in several important ways, including business scale, its lack of a formal relationship with Alibaba, and its many non-express lines of business</li>
<li>SF also differs from the pre-Covid version of itself: it's far larger than it was in 2019, but core margins have declined, and internatonal exposure has risen dramatically</li>
<li>In this insight we also take a look at current EV/Revenue valuations vs peers and list important milestones to watch for ahead of the company's planned HK IPO</li>
</ul>


SF Holding differs from its Chinese peers in several important ways, including business scale, its lack of a formal relationship with Alibaba, and its many non-express lines of business
SF also differs from the pre-Covid version of itself: it's far larger than it was in 2019, but core margins have declined, and internatonal exposure has risen dramatically
In this insight we also take a look at current EV/Revenue valuations vs peers and list important milestones to watch for ahead of the company's planned HK IPO


A Look at How SF Holding Differs from A) Its Express Peers and B) The Pre-Covid Version of Itself

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>
<a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a> could raise between HK$26-33bn (US$3.4-4.2bn) in its H-share listing depending on the H-shares discount and exercise of the overallotment option.</li>
<li>The H-shares could get Fast Entry to certain indices and regular entry to others depending on the number of shares that are allotted to cornerstone and/or strategic investors.</li>
<li>The H-shares will be added to Southbound Stock Connect following the end of the price stabilisation period. Inclusion in the Hang Seng Composite Index will come later.</li>
</ul>



S.F. Holding (002352 CH) could raise between HK$26-33bn (US$3.4-4.2bn) in its H-share listing depending on the H-shares discount and exercise of the overallotment option.
The H-shares could get Fast Entry to certain indices and regular entry to others depending on the number of shares that are allotted to cornerstone and/or strategic investors.
The H-shares will be added to Southbound Stock Connect following the end of the price stabilisation period. Inclusion in the Hang Seng Composite Index will come later.


SF Holding (002352 CH): H-Share Listing & Index Implications

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Lalatech Holdings Co Ltd / Equity Capital Markets

<ul>
<li>Lalatech Holdings filed for an IPO in March. I have tried to come at an IPO valuation for the company using a mix of methodologies: EV/Revenue, EV/GTV and EV/Gross Profit.</li>
<li>Taking a weighted average of peer group multiples-based valuation methodologies, I arrived at a ~$7B IPO valuation for Lalatech Holdings, including ~$1.65B of cash and cash equivalents.</li>
<li>From a peer group perspective, I arrived at a fair IPO valuation close to ~$7B, using a ~5x EV/CY22 Revenue, ~0.7x EV/CY22 GTV, and a 10x EV/CY22 Gross Profit multiple. </li>
</ul>


Lalatech Holdings filed for an IPO in March. I have tried to come at an IPO valuation for the company using a mix of methodologies: EV/Revenue, EV/GTV and EV/Gross Profit.
Taking a weighted average of peer group multiples-based valuation methodologies, I arrived at a ~$7B IPO valuation for Lalatech Holdings, including ~$1.65B of cash and cash equivalents.
From a peer group perspective, I arrived at a fair IPO valuation close to ~$7B, using a ~5x EV/CY22 Revenue, ~0.7x EV/CY22 GTV, and a 10x EV/CY22 Gross Profit multiple. 


Lalatech IPO Valuation Analysis: Discount To Last Round Valuation Is Justified

Equity Bottom-Up

<ul>
<li>In June, mainstream parcel pricing declined by over 10% Y/Y, but SF Holding saw ASPs rise</li>
<li>We believe J&amp;T Global Express' planned IPO could negatively impact the industry in H2</li>
<li>Pricing pressure has increased, in our view, and we expect margins to decline in H2 23</li>
</ul>


In June, mainstream parcel pricing declined by over 10% Y/Y, but SF Holding saw ASPs rise
We believe J&amp;T Global Express' planned IPO could negatively impact the industry in H2
Pricing pressure has increased, in our view, and we expect margins to decline in H2 23


Monthly Chinese Express Tracker | Mainstream ASPs Down 10% in June | J&T IPO Impact? | (July 2023)

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>Baba: Alibaba's annual report, Chinese media discussions and our thoughts</li>
<li>BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing (-)</li>
<li>BEKE: China reinforce the city village reconstruction policy, which is different with Shantytown Renovation project（+)</li>
</ul>


Baba: Alibaba's annual report, Chinese media discussions and our thoughts
BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing (-)
BEKE: China reinforce the city village reconstruction policy, which is different with Shantytown Renovation project（+)


China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

China

ZTO Express (Cayman) Inc. operates as an express delivery company. The Company provides express delivery service through their nationwide network, as well as other value-added logistics services. ZTO Express serves customers globally.

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ZTO Express Cayman (ZTO US)

A Look at How SF Holding Differs from A) Its Express Peers and B) The Pre-Covid Version of Itself

In this insight we compare today's SF Holding to its Chinese peers and to the pre-Covid version of itself. We also look at EV/Sales valuations and...

Tracking Traffic

Lalatech IPO Valuation Analysis: Discount To Last Round Valuation Is Justified

Lalatech Holdings is expected to go public this year and may raise $1B in the upcoming Hong Kong IPO. My analysis suggests a significant discount...

Andrei Zakharov

Monthly Chinese Express Tracker | Mainstream ASPs Down 10% in June | J&T IPO Impact? | (July 2023)

Monthly figures from the China-listed express companies show that parcel pricing continued to decline in June, with slowing e-commerce sales and...

Tracking Traffic

China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

Baba: Alibaba's annual report;BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing;BEKE: China reinforce the...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A Look at How SF Holding Differs from A) Its Express Peers and B) The Pre-Covid Version of Itself

In this insight we compare today's SF Holding to its Chinese peers and to the pre-Covid version of itself. We also look at EV/Sales valuations and...

Tracking Traffic

SF Holding (002352 CH): H-Share Listing & Index Implications

SF Holdings could raise between HK$26-33bn in its H-shares listing. The discount vs A-shares and cornerstone/strategic allocation will be key in...

Brian Freitas

Lalatech IPO Valuation Analysis: Discount To Last Round Valuation Is Justified

Lalatech Holdings is expected to go public this year and may raise $1B in the upcoming Hong Kong IPO. My analysis suggests a significant discount...

Andrei Zakharov

Monthly Chinese Express Tracker | Mainstream ASPs Down 10% in June | J&T IPO Impact? | (July 2023)

Monthly figures from the China-listed express companies show that parcel pricing continued to decline in June, with slowing e-commerce sales and...

Tracking Traffic

China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

Baba: Alibaba's annual report;BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing;BEKE: China reinforce the...

Blue Lotus Research Institute