Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>October volume firmed, but price data is mixed; X-border activity trended stronger</li>
<li>ZTO's shares sagged after it reported weaker Q324 margins &amp; lowered FY24 guidance</li>
<li>Market leader SF Holding's long-awaited HK IPO should price &amp; begin trading this week</li>
</ul>


October volume firmed, but price data is mixed; X-border activity trended stronger
ZTO's shares sagged after it reported weaker Q324 margins &amp; lowered FY24 guidance
Market leader SF Holding's long-awaited HK IPO should price &amp; begin trading this week


Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week

Cainiao Smart Logistics Network / Equity Bottom-Up

<ul>
<li>CaiNiao's Q2FY Y/Y revenue growth moderated to just +8%, and EBITA declined by -94% Y/Y</li>
<li>We believe X-border volume remains strong, but X-border price has plummeted</li>
<li>Considering CaiNiao's &amp; Alibaba's Q2FY results, unclear who makes money in X-border</li>
</ul>


CaiNiao's Q2FY Y/Y revenue growth moderated to just +8%, and EBITA declined by -94% Y/Y
We believe X-border volume remains strong, but X-border price has plummeted
Considering CaiNiao's &amp; Alibaba's Q2FY results, unclear who makes money in X-border


CaiNiao Q2FY: Pressure on Profitability Has Intensified | X-Border Competition the Likely Culprit

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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

<ul>
<li>Chinese logistics service provider SF Holding has filed for a listing on HKEx and seeks to raise HK$6.2bn (US$795m) through the issuance of 170m shares (3.4% of outstanding shares).</li>
<li>The listing is priced at HK$32.3-36.3 per share, as expected at a 20-29% discount to the last closed price of SF Holding’s A-Shares on 18th November.</li>
<li>Our valuation analysis suggests that SF Holding’s HK offering is attractive at the lower end of the indicative IPO price range.</li>
</ul>


Chinese logistics service provider SF Holding has filed for a listing on HKEx and seeks to raise HK$6.2bn (US$795m) through the issuance of 170m shares (3.4% of outstanding shares).
The listing is priced at HK$32.3-36.3 per share, as expected at a 20-29% discount to the last closed price of SF Holding’s A-Shares on 18th November.
Our valuation analysis suggests that SF Holding’s HK offering is attractive at the lower end of the indicative IPO price range.


SF Holding HKEx Listing: Peer Comparison and Valuation

<ul>
<li>Going into FY24, ZTO aimed to focus on price,  cede volume share in support of margins</li>
<li>It hasn't worked: in Q324, adj EBITDA margin fell -290 bps Y/Y despite higher ASPs</li>
<li>Q324 results reveal weak earnngs growth, &amp; reduced FY24 volume target; AVOID</li>
</ul>


Going into FY24, ZTO aimed to focus on price,  cede volume share in support of margins
It hasn't worked: in Q324, adj EBITDA margin fell -290 bps Y/Y despite higher ASPs
Q324 results reveal weak earnngs growth, &amp; reduced FY24 volume target; AVOID


ZTO Express Q324 Results: Shift in Strategy Leads to Lower Core Margins & FY24 Guidance Cut | AVOID

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 6 December.</li>
<li>With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.</li>
<li>Short interest is especially large in <a href="https://www.smartkarma.com/entities/sinotruk-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:19764:1" rel="noopener">Sinotruk</a>, <a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology</a>, <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASMPT</a> and <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics</a> and inclusion could set off some short covering.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

Hong Kong

J&T Global Express Limited operates as a global logistics service provider. The Company offers road express delivery, air express transportation, supply chain warehousing, and other value added services. J&T Global Express conducts business in China, Philippines, Malaysia, Thailand, Vietnam, and other countries.

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J&T Global Express (1519 HK)

Monthly Chinese Express Tracker | October Volume Firmed | ZTO Disappoints | SF HK IPO This Week

October parcel volume growth improved, but price data was mixed. The biggest news in the sector came from ZTO (weak Q3 numbers) and SF Holding (HK...

Tracking Traffic

CaiNiao Q2FY: Pressure on Profitability Has Intensified | X-Border Competition the Likely Culprit

Alibaba's September financial report showed weak results from its logistics affiliate CaiNiao. What insights into Chinese X-border retail can we...

Tracking Traffic

SF Holding HKEx Listing: Peer Comparison and Valuation

SF Holding seeks to raise HK$6.2bn (US$795m) through its Hong Kong listing. Our valuation analysis suggests that the offering is attractive at the...

Shifara Samsudeen, FCMA, CGMA

ZTO Express Q324 Results: Shift in Strategy Leads to Lower Core Margins & FY24 Guidance Cut | AVOID

ZTO's focus on price over volume share gains simply hasn't worked so far in 2024. Until management developts a path towards a return to profitable...

Tracking Traffic

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

We highlight 10 potential inclusions for the HSI in Dec. The number of constituents has not increased this year and the target to reach 100 members...

Brian Freitas

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