Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

JD Logistics: Gray Market Value & The Very Long-Term View Driven by Technological Innovations

Impact of Market Caps & Share Based Compensation Schemes on Chinese IPOs in 2021

JD Logistics (2618 HK): Higher Growth, Higher Loss

JD Logistics (京东物流) IPO - Updated Index Implications and Impact on JD.com (京东) HoldCo Valuation

JD Logistics IPO - Looking to Raise $4 Billion but Valuation Pulled Down by SF Holding

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

Equity Capital Markets

<div class="content-highlight">
<p><strong>Based on our updated valuation analysis of JD Logistics, our base case valuation of JD Logistics is $47.6 billion, which is 40% higher than the high end of the expected IPO valuation range of $34 billion.  We continue to have a positive view of JD Logistics IPO.</strong></p>
<p>We based our base case valuation using 2.3x EV/S valuation multiple and applying our 2022 estimated sales of 123.4 billion RMB. We lowered our EV/S valuation multiple slightly to 2.3x from 2.5x previously (May 3rd), mainly due to recent poor weakness of IPO related shares performance combined with lower gross margins of the company in 1Q 2021.</p>
<p>Although our base case valuation suggests a 40% upside from the high end of the IPO valuation of $34 billion, due to the recent weakness of the overall IPO environment, it is highly unlikely that the IPO shares of JD Logistics will shoot up similar to the Kuaishou Tech IPO. Nonetheless, we believe that JD Logistics has excellent fundamentals and it is one of the most attractive logistics companies in China. It also appears that the recent IPO weakness may have led to the IPO price range being toned down a bit, which would be favorable to the long-term investors of JD Logistics. </p>
</div>


Based on our updated valuation analysis of JD Logistics, our base case valuation of JD Logistics is $47.6 billion, which is 40% higher than the high end of the expected IPO valuation range of $34 billion.  We continue to have a positive view of JD Logistics IPO.
We based our base case valuation using 2.3x EV/S valuation multiple and applying our 2022 estimated sales of 123.4 billion RMB. We lowered our EV/S valuation multiple slightly to 2.3x from 2.5x previously (May 3rd), mainly due to recent poor weakness of IPO related shares performance combined with lower gross margins of the company in 1Q 2021.
Although our base case valuation suggests a 40% upside from the high end of the IPO valuation of $34 billion, due to the recent weakness of the overall IPO environment, it is highly unlikely that the IPO shares of JD Logistics will shoot up similar to the Kuaishou Tech IPO. Nonetheless, we believe that JD Logistics has excellent fundamentals and it is one of the most attractive logistics companies in China. It also appears that the recent IPO weakness may have led to the IPO price range being toned down a bit, which would be favorable to the long-term investors of JD Logistics. 


JD Logistics: An Attractive IPO With a 40% Upside