In today’s briefing:
- India – Positioning on Some Interesting* Names
- J&T Global Express (1519 HK): Index Inclusion Possibility & Timelines
- J&T Global Express IPO – Team Effort for Some Heavy Lifting
- J&T Global Express IPO: Valuation Insights
- Cainiao Pre-IPO – Peer Comparison
India – Positioning on Some Interesting* Names
- Polycab India, Macrotech Developers, Paytm, Tata Communications, Tata Motors DVR, Apl Apollo Tubes, Persistent Systems and Suzlon Energy have run up over the recent past and have heightened investor attention.
- The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
- We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.
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.
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.
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.
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