IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares <a href="https://inews.hket.com/article/2967663/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E4%BA%AC%E6%9D%B1%E7%89%A9%E6%B5%812618%E6%9A%97%E7%9B%A4%E5%8D%87%E9%80%BE3%E6%88%90%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA%E7%B4%841200%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">stood 31% higher</a> at HK$53.00 in the Futu securities' grey market.</p><div>
<p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:51524" rel="noopener">JD Logistics IPO: Valuation Insights</a>, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.</p>
<div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. </p></div>
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JD Logistics (2618 HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares stood 31% higher at HK$53.00 in the Futu securities' grey market.
In JD Logistics IPO: Prioritizing Market Share Gains over Margins, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In JD Logistics IPO: Valuation Insights, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.
Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. 


<div><p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007.</p></div><div><p>At the proposed IPO price range of HK$39.36-43.36 per share, JD Logistics will have a market cap of HK$239,766-264,132 million ($30.9-34.0 billion). At the mid-point of the IPO price range, the net proceeds are HK$24,713 million ($3.2 billion). Seven cornerstone investors will purchase $1.5 billion worth of the offer shares (47.16% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>, Temasek, Tiger Global, China Structural Reform Fund, Blackstone,  Matthews Funds and Oaktree. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-initiation-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:48279" rel="noopener">JD Logistics IPO Initiation: The Flow of Things</a>, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. </p></div><div><div><div class="content-highlight"><p>Overall, based on valuation analysis, we think that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. </p></div></div></div>

JD Logistics (2618 HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007.At the proposed IPO price range of HK$39.36-43.36 per share, JD Logistics will have a market cap of HK$239,766-264,132 million ($30.9-34.0 billion). At the mid-point of the IPO price range, the net proceeds are HK$24,713 million ($3.2 billion). Seven cornerstone investors will purchase $1.5 billion worth of the offer shares (47.16% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are Softbank Group (9984 JP), Temasek, Tiger Global, China Structural Reform Fund, Blackstone,  Matthews Funds and Oaktree. In JD Logistics IPO Initiation: The Flow of Things, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.In JD Logistics IPO: Prioritizing Market Share Gains over Margins,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. Overall, based on valuation analysis, we think that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. 

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<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (JDL HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007.</p>
<p>JD Logistics is seeking to raise up to $3-4 billion at a $40 billion valuation, according to press reports. Merrill Lynch and Haitong, which are part of the syndicate, have valued JD Logistics at $30.0-45.4 billion and $42.4-44.3 billion, respectively, <a href="https://www.thestandard.com.hk/section-news/section/2/229859/JD-Logistics-gets-ball-rolling-for-US%244b-IPO" target="_blank" rel="noopener">according to press reports</a>. </p>
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<p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-initiation-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:48279" rel="noopener">JD Logistics IPO Initiation: The Flow of Things</a>, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.</p>
<p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. </p>
</div><div><div><div class="content-highlight"><p>In this note, we update our forecasts and valuation presented in <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:48384" rel="noopener">JD Logistics IPO: Valuation First Look</a> for the latest set of results and the margin guidance. Overall, based on valuation analysis, we think that the rumoured $40 billion valuation target is fair, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. </p></div></div></div>


JD Logistics (JDL HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007.
JD Logistics is seeking to raise up to $3-4 billion at a $40 billion valuation, according to press reports. Merrill Lynch and Haitong, which are part of the syndicate, have valued JD Logistics at $30.0-45.4 billion and $42.4-44.3 billion, respectively, according to press reports. 

In JD Logistics IPO Initiation: The Flow of Things, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.
In JD Logistics IPO: Prioritizing Market Share Gains over Margins,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. 
In this note, we update our forecasts and valuation presented in JD Logistics IPO: Valuation First Look for the latest set of results and the margin guidance. Overall, based on valuation analysis, we think that the rumoured $40 billion valuation target is fair, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. 

JD Logistics IPO: Valuation and Forecast Update

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

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<p><strong>Our base case valuation of JD Logistics is EV of 344 billion RMB and implied market cap of 368 billion RMB (US$57 billion).</strong> At an implied market cap of $57 billion, this represents a 43% higher level than the recent valuation of $40 billion mentioned in a recent Bloomberg <a href="https://www.bloomberg.com/news/articles/2020-11-24/jd-s-logistics-unit-said-to-mull-ipo-at-40-billion-valuation" target="_blank" rel="noopener">article.</a> Given the solid upside, we have a positive view of the JD Logistics IPO. </p>
<p>Our high end value of JD Logistics is an implied market cap of 478 billion RMB ($74 billion). So, we think that post the IPO, JD Logistics' market cap could have an <em>"initial pop"</em> to nearly $74 billion, which would be 85% higher than the recently mentioned valuation of $40 billion.</p>
</div><p>We forecast the company to generate revenue of 93.8 billion RMB in 2021 (up 30.2% YoY) and 117.1 billion RMB in 2022 (up 24.8% YoY). We have assumed the company's sales growth rate to decline gradually in the ensuing years and we estimate JD Logistics to generate sales of 184.8 billion RMB in 2025.</p>


Our base case valuation of JD Logistics is EV of 344 billion RMB and implied market cap of 368 billion RMB (US$57 billion). At an implied market cap of $57 billion, this represents a 43% higher level than the recent valuation of $40 billion mentioned in a recent Bloomberg article. Given the solid upside, we have a positive view of the JD Logistics IPO. 
Our high end value of JD Logistics is an implied market cap of 478 billion RMB ($74 billion). So, we think that post the IPO, JD Logistics' market cap could have an "initial pop" to nearly $74 billion, which would be 85% higher than the recently mentioned valuation of $40 billion.
We forecast the company to generate revenue of 93.8 billion RMB in 2021 (up 30.2% YoY) and 117.1 billion RMB in 2022 (up 24.8% YoY). We have assumed the company's sales growth rate to decline gradually in the ensuing years and we estimate JD Logistics to generate sales of 184.8 billion RMB in 2025.

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

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<p>The goal of this new product is to monitor the progress of upcoming and recently-completed IPOs and deals in the Asian logistics, transportation and travel space. We'll also look at deals in related segments, including eCommerce fulfillment, ride-hailing, online food delivery, and warehousing.</p>
<p>Each issue will feature news and commentary on planned IPOs and other major deals in the logistics space, plus an update on the performance of recent IPOs and deals. We'll also profile a prominent private Asian company in the sector that could soon seek a public listing.  </p>
<p>In this issue we review planned listings from <a href="https://www.smartkarma.com/entities/dida-inc" target="_blank" data-smartkarma-citation="entities:29701:1" rel="noopener">Dida (DIDA HK)</a> and <a href="https://www.smartkarma.com/entities/zim-integrated-shipping-services-ltd" target="_blank" data-smartkarma-citation="entities:31124:1" rel="noopener">ZIM Integrated Shipping Services (ZIM US)</a>, check in on the share performance of four recent logistics-related IPOs, and introduce private Hive-Box Holdings (HBH), the world's largest operator of smart lockers. </p>




The goal of this new product is to monitor the progress of upcoming and recently-completed IPOs and deals in the Asian logistics, transportation and travel space. We'll also look at deals in related segments, including eCommerce fulfillment, ride-hailing, online food delivery, and warehousing.
Each issue will feature news and commentary on planned IPOs and other major deals in the logistics space, plus an update on the performance of recent IPOs and deals. We'll also profile a prominent private Asian company in the sector that could soon seek a public listing.  
In this issue we review planned listings from Dida (DIDA HK) and ZIM Integrated Shipping Services (ZIM US), check in on the share performance of four recent logistics-related IPOs, and introduce private Hive-Box Holdings (HBH), the world's largest operator of smart lockers. 

TRACKING TRAFFIC/Logistics Capital Markets Monitor | IPOs | M&A | Pre-IPO Profile: Hive-Box Holdings

South Korea

CJ Logistics Corporation provides logistics services. The Company provides land transportation, maritime transportation, harbor unloading, cargo storage, international logistics processing, and other services. CJ Logistics also provides internet home shopping services. CJ Logistics serves customers worldwide.

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CJ Logistics (000120 KS)

JD Logistics IPO: Trading Debut

JD Logistics priced its IPO at HK$40.36 and stood 31% higher at HK$53.00 in the grey market. Our DCF sensitivity and relative valuation analysis...

Arun George

JD Logistics IPO: Valuation Insights

The net proceeds are $3.2 billion at the mid-point of the IPO price range. We think that the IPO price range is attractive due to JD Logistics'...

Arun George

JD Logistics IPO: Valuation and Forecast Update

JD Logistics is set to launch its IPO to raise $3-4 bn in May. The rumoured $40 bn valuation is fair, particularly in the context of its...

Arun George

JD Logistics IPO Valuation Analysis

Our base case valuation of JD Logistics is EV of 344 billion RMB and implied market cap of 368 billion RMB (US$57 billion).

Douglas Kim

TRACKING TRAFFIC/Logistics Capital Markets Monitor | IPOs | M&A | Pre-IPO Profile: Hive-Box Holdings

In this week's Logistics Capital Markets Monitor: updates on ZIM and DiDa ChuXing IPOs, performance of recent IPOs in the Logistics space, and a...

Tracking Traffic

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