Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers</li>
<li>The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers</li>
<li>It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models </li>
</ul>


The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers
The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers
It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models 


The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

Alpha-Centric ESG Research

Kyle Rudden

COVID-19 vaccines figure into Biden's recently-announced COVID-19 response plan, though with a clear emphasis on distribution versus development (as was Trump's focus). Biden's prioritisation of vaccine distribution – and the US$25 billion earmarked for it – is a gift for "cold chain" stocks."Cold chain" refers to a complex temperature-controlled supply chain that is mission-critical to the distribution of COVID-19 vaccines. Critical, because vaccines require consistent ultra-cold storage from manufacture to needle-stick, otherwise those expensive vaccines become medical waste.This Insight looks at cold chain stocks as an investment theme inherent in Biden's COVID-19 plan (see <a href="https://www.smartkarma.com/insights/biden-covid-19-response-plan-overview-of-its-inherent-investment-themes" target="_blank" data-smartkarma-citation="insights:45631" rel="noopener">Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes</a>). Although the cold chain is fragmented and largely privately-held, but there are opportunities in three areas:<ol>
<li>
Freight and Logistics: Most listed companies fall into this category, including both integrated cold chain freight and logistics stocks, as well as niche players in either of freight or logistics.</li>
<li>
Freezer Manufacturers: Ultra-cold freezer boxes and related industrial components of various shapes and sizes are needed for the cold chain to function. Several stocks serve this segment.</li>
<li>
Specialty Chemicals: Dry ice gets all the headlines, as massive amounts are needed but supply is short, but other specialty chemicals and industrial gases are also needed in the cold chain.</li>
</ol>

COVID-19 vaccines figure into Biden's recently-announced COVID-19 response plan, though with a clear emphasis on distribution versus development (as was Trump's focus). Biden's prioritisation of vaccine distribution – and the US$25 billion earmarked for it – is a gift for "cold chain" stocks."Cold chain" refers to a complex temperature-controlled supply chain that is mission-critical to the distribution of COVID-19 vaccines. Critical, because vaccines require consistent ultra-cold storage from manufacture to needle-stick, otherwise those expensive vaccines become medical waste.This Insight looks at cold chain stocks as an investment theme inherent in Biden's COVID-19 plan (see Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes). Although the cold chain is fragmented and largely privately-held, but there are opportunities in three areas:

Freight and Logistics: Most listed companies fall into this category, including both integrated cold chain freight and logistics stocks, as well as niche players in either of freight or logistics.

Freezer Manufacturers: Ultra-cold freezer boxes and related industrial components of various shapes and sizes are needed for the cold chain to function. Several stocks serve this segment.

Specialty Chemicals: Dry ice gets all the headlines, as massive amounts are needed but supply is short, but other specialty chemicals and industrial gases are also needed in the cold chain.


Biden COVID-19 Response Plan: Cold Chain Transportation and Logistics Stocks Benefit

Equity Bottom-Up

<ul>
<li>ZTO Express reported another set of weak results after the US close on November 19</li>
<li>Although Q3 unit prices rose slightly, unit costs increased by much more, crushing margins</li>
<li>On both sides of the price-volume tradeoff, ZTO continues to lose profitability | AVOID</li>
</ul>


ZTO Express reported another set of weak results after the US close on November 19
Although Q3 unit prices rose slightly, unit costs increased by much more, crushing margins
On both sides of the price-volume tradeoff, ZTO continues to lose profitability | AVOID


ZTO Express Q325 Results | Revenue, ASPs Both Up Y/Y | But Earnings, Margins Both Down | AVOID

Kerry Express Thailand / Equity Bottom-Up

<ul>
<li>H125 results from KEX, J&amp;T Global (SE Asia) tell two very different stories</li>
<li>KEX shrunk under pressure from J&amp;T and Flash, a private express "unicorn"</li>
<li>SE Asia still promises X-border growth; impact on SF Holding limited</li>
</ul>


H125 results from KEX, J&amp;T Global (SE Asia) tell two very different stories
KEX shrunk under pressure from J&amp;T and Flash, a private express "unicorn"
SE Asia still promises X-border growth; impact on SF Holding limited


After Battling J&T Global and Flash in Thailand's Express Market, KEX Shrinks, Then Delists

<ul>
<li>Despite a few pockets of improved demand, key Transpacific trade remains weak</li>
<li>Most carriers reported low (48% - 68%) but stable cargo load factors in August</li>
<li>For carriers, still lots of empty space to sell; macro view shows no "snap-back"</li>
</ul>


Despite a few pockets of improved demand, key Transpacific trade remains weak
Most carriers reported low (48% - 68%) but stable cargo load factors in August
For carriers, still lots of empty space to sell; macro view shows no "snap-back"


Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

United States

FedEx Corp. delivers packages and freight to multiple countries and territories through an integrated global network.  The Company provides worldwide express delivery, ground small-parcel delivery, less-than-truckload freight delivery, supply chain management services, customs brokerage services, and trade facilitation and electronic commerce solutions.

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FedEx Corp (FDX US)

The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

Thie story of fake US postage being used to distribute Chinese goods to US consumers isn't just a fascinating story -- it could potentially have...

Tracking Traffic

Biden COVID-19 Response Plan: Cold Chain Transportation and Logistics Stocks Benefit

Biden's COVID-19 response plan earmarks US$25 billion to vaccines, but with a twist. His emphasis is vaccine distribution, not development. That...

Kyle Rudden

ZTO Express Q325 Results | Revenue, ASPs Both Up Y/Y | But Earnings, Margins Both Down | AVOID

ZTO reported another weak set of results on Wednesday, as margins collapsed in Q3 despite modest pricing improvement. Oh, and management cut volume...

Tracking Traffic

After Battling J&T Global and Flash in Thailand's Express Market, KEX Shrinks, Then Delists

Under pressure on multiple fronts, Kerry Express Thailand recently delisted its shares after less than five years of life as a publicly-traded...

Tracking Traffic

Monthly Air Cargo Tracker | August Shows Pockets of Growth | But LF, Pricing Both Still Very Weak

August air cargo data from a range of carriers and cargo gateways around the Pacific Rim show uneven demand, but still-low utilization and weak...

Tracking Traffic

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