Lufax IPO: Unsecured Loans Drive Top Line Growth but Risks Remain Despite Capital-Light Model

Lufax IPO: Shift in Product Mix and Higher Customer Acquisition Cost Eat into Profits

JD Health Pre-IPO: Poised to Benefit from Structural Changes in Healthcare in China and the Pandemic

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Ant Group IPO: Jack Ma Is Still “Very Much” in Control

Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p>We are broadly positive about <a href="https://www.smartkarma.com/entities/jd-digits" target="_blank" data-smartkarma-citation="entities:29289:1" rel="noopener">JD Digits (JDD CH)</a>’s IPO. We like the fact that JDD is trying to leverage the consumer credit boom in China by providing B2B solutions for financial institutions rather than competing directly with the likes of <a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> in the consumer financing space. That being said, JDD should get a steady stream of revenue from providing consumer financing solutions to JD.com’s customers, whose GMV has been growing at around 20%-30% per year in the past few years. Moreover, our marginal profitability analysis suggests that there is room for JDD’s OP margin to improve further as the business scales. JDD also does not look expensive to us at the rumoured IPO valuation.</p>

We are broadly positive about JD Digits (JDD CH)’s IPO. We like the fact that JDD is trying to leverage the consumer credit boom in China by providing B2B solutions for financial institutions rather than competing directly with the likes of Ant Financial (1051260D CH) in the consumer financing space. That being said, JDD should get a steady stream of revenue from providing consumer financing solutions to JD.com’s customers, whose GMV has been growing at around 20%-30% per year in the past few years. Moreover, our marginal profitability analysis suggests that there is room for JDD’s OP margin to improve further as the business scales. JDD also does not look expensive to us at the rumoured IPO valuation.

JD Digits IPO: Leveraging the Chinese Consumer Credit Boom in a Non-Ant Way