HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

<ul>
<li>Although <a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is China's largest MRO player, its maximum IPO price of HK$15.5 implies a rich FY26 PER of 28.2x.</li>
<li>The stock's highest justified valuation is a 20% premium to the sector average FY26F PER, implying only 8% upside from the IPO price, providing a limited safety margin.</li>
<li>We think it will only be attractive to price below the mid-point of the IPO range, that is, HK$14.10.</li>
</ul>


Although JD Industrials (7618 HK) is China's largest MRO player, its maximum IPO price of HK$15.5 implies a rich FY26 PER of 28.2x.
The stock's highest justified valuation is a 20% premium to the sector average FY26F PER, implying only 8% upside from the IPO price, providing a limited safety margin.
We think it will only be attractive to price below the mid-point of the IPO range, that is, HK$14.10.


JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is a leading industrial supply chain technology and service provider in China. It has launched an HKEx IPO to raise up to US$420 million.</li>
<li>I previously discussed the IPO in <em><strong><a href="https://www.smartkarma.com/insights/jingdong-industrials-jdi-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:212076" rel="noopener">Jingdong Industrials (JDI) IPO: The Investment Case</a></strong></em>. </li>
<li>In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.</li>
</ul>



JD Industrials (7618 HK) is a leading industrial supply chain technology and service provider in China. It has launched an HKEx IPO to raise up to US$420 million.
I previously discussed the IPO in Jingdong Industrials (JDI) IPO: The Investment Case. 
In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.


JD Industrials IPO (7618 HK): Valuation Insights

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is now looking to raise up to US$421m, in its Hong Kong IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.</li>
</ul>



JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.


JD Industrials IPO - Valuation Cut Means Its Priced to Go

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrial-technology-ltd" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrial Technology</a> is now looking to raise about US$500m in its upcoming HK IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We have looked at the company background and refiling updates in our previous notes. In this note, we will talk about the refiling updates.</li>
</ul>



JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and refiling updates in our previous notes. In this note, we will talk about the refiling updates.


JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrial-technology-ltd" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrial</a> is now looking to raise about US$500m, down from earlier reported US$1bn, in its upcoming HK IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We have looked at the company background and provided our initial thoughts on valuations in our previous notes. In this note, we will talk about the refiling updates.</li>
</ul>



JD Industrial is now looking to raise about US$500m, down from earlier reported US$1bn, in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and provided our initial thoughts on valuations in our previous notes. In this note, we will talk about the refiling updates.


JD Industrials Pre-IPO - Re-Refiling Updates - More Hits than Misses

United States

Fastenal Company sell industrial and construction supplies in a wholesale and retail fashion.  The Company markets its products and services throughout the United States, Canada, Mexico, Puerto Rico, Singapore, China, and The Netherlands.

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Fastenal Co (FAST US)

JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...

Osbert Tang, CFA

JD Industrials IPO (7618 HK): Valuation Insights

JDI is seeking to raise up to US$420 million. In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is...

Arun George

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO. In this note, we undertake an updated peer comparison and...

Sumeet Singh

JD Industrials Pre-IPO - Re-Refiling Updates - More Hits than Misses

JD Industrial has now filed its PHIP and could look to launch its planned US$500m IPO within the next week or two. We will take a re-look at...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

​JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...

Osbert Tang, CFA

JD Industrials IPO (7618 HK): Valuation Insights

JDI is seeking to raise up to US$420 million. In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is...

Arun George

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO. In this note, we undertake an updated peer comparison and...

Sumeet Singh

JD Industrials Pre-IPO - Re-Refiling Updates - More Hits than Misses

JD Industrial has now filed its PHIP and could look to launch its planned US$500m IPO within the next week or two. We will take a re-look at...

Sumeet Singh

JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...