In today’s briefing:
- J&T Global Express (1519 HK): Index Inclusion Possibility & Timelines
- Alibaba (9988 HK): A Visit to Premier – Freshippo Begins to Try New Style Again
- J&T Global Express IPO – Team Effort for Some Heavy Lifting
- Quiddity A/H Premium Tracker (To Oct13): Volatility Up Bigly, Wide Spreads Wider
- J&T Global Express IPO: Valuation Insights
- Cainiao Pre-IPO – Peer Comparison
- Asymchem Laboratories (6821.HK/002821.CH) – A Heartening Rise in Share Price Could Be Drawing Near
J&T Global Express (1519 HK): Index Inclusion Possibility & Timelines
- J&T Global Express (1936374D CH) is looking to raise HK$3.92bn (US$501m) in its IPO by selling 326.55m shares at HK$12/share, valuing the company at HK$105.75bn (US$13.52bn).
- J&T Global Express (1936374D CH) will not get Fast Entry to any indices but should be added to the HSCI in March. Inclusion to Southbound Stock Connect will take longer.
- Inclusion in other indices will take longer with the highest probability of index inclusion in September 2024.
Alibaba (9988 HK): A Visit to Premier – Freshippo Begins to Try New Style Again
- Freshippo opened its first high-end supermarket, Premier, in Shanghai in September.
- We believe it is a good idea to take business from independent stores and small store chains.
- However, we do not believe those foreigner-oriented foods will be popular.
J&T Global Express IPO – Team Effort for Some Heavy Lifting
- J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its Hong Kong IPO.
- As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
- We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.
Quiddity A/H Premium Tracker (To Oct13): Volatility Up Bigly, Wide Spreads Wider
- The Brand-Spanking New (9 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
- We used to do it. We brought it back better, with lots of cool interactive tables, and charts, heat maps, and comparative data. And 50 Trade Recommendations.
- The last 9 weeks (since the start of the new Trcker and Portfolio 8 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%, -0.29%, -0.71%.
J&T Global Express IPO: Valuation Insights
- J&T Global Express (1519 HK), a leading express delivery business in Southeast Asia and China, has launched a HKEx IPO to raise US$500 million at a fixed price of HK$12.00.
- We previously discussed the IPO in J&T Global Express IPO: The Bull Case, J&T Global Express IPO: The Bear Case and J&T Global Express IPO: Updates Tilts the Balance Positively.
- The IPO price range is unattractive, with our SoTP valuation of HK$10.75 per share, 10% below the IPO price. Therefore, we would pass on the IPO.
Cainiao Pre-IPO – Peer Comparison
- Cainiao Smart Logistics, Alibaba (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
- Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
- In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison.
Asymchem Laboratories (6821.HK/002821.CH) – A Heartening Rise in Share Price Could Be Drawing Near
- CDMO business usually have higher certainty/profit margin, and would be affected by the deterioration of overseas financing environment much later than CRO business. So, we prefer Asymchem to WuXi AppTec.
- Total market size of GLP-1s could exceed the sum of semaglutide + the vast majority of chronic disease drugs.No matter how GLP-1s expand indications, Asymchem has the opportunity to benefit.
- Asymchem needs to secure a large order related to GLP-1 drugs. Such big catalyst would certainly boost stock price, just like when COVID-19 order was received in November 2021.