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.

Equity Capital Markets

JD.com Inc (ADR) / Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, we looked at a number of upcoming listings in India.</li>
<li>There was a revival in placement flows during the week, after a lull over the past few weeks.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, we looked at a number of upcoming listings in India.
There was a revival in placement flows during the week, after a lull over the past few weeks.


ECM Weekly (26th Aug 2024) - Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions.</li><li>The company achieved record non-GAAP net profit for a single quarter, indicating strong profitability and effective cost management.</li><li>However, revenue growth was modest, reflecting the competitive and dynamic nature of the market JD.com operates in.</li></ul>

JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions.The company achieved record non-GAAP net profit for a single quarter, indicating strong profitability and effective cost management.However, revenue growth was modest, reflecting the competitive and dynamic nature of the market JD.com operates in.

JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! - Major Drivers

Analyst

Steve

<ul>
<li>Profitability of the business surprised on the upside, as the net profit margin of JD.com increased from 3% in 2Q23 to 5% in 2Q24.</li>
<li>Share buyback accelerated in 2Q24, as the company bought USD2.1bn worth of stock in the quarter, up from USD1.2bn in 1Q24. </li>
<li>The stock is trading at 7x 2024 PE, with a yield of &gt;10% through dividend and buyback.</li>
</ul>


Profitability of the business surprised on the upside, as the net profit margin of JD.com increased from 3% in 2Q23 to 5% in 2Q24.
Share buyback accelerated in 2Q24, as the company bought USD2.1bn worth of stock in the quarter, up from USD1.2bn in 1Q24. 
The stock is trading at 7x 2024 PE, with a yield of &gt;10% through dividend and buyback.


JD.com (JD US):  Strong Profitability And Upsized Share Buyback in 2Q24

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>Media reports indicate that <a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> is looking to sell 144.5m shares of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com (JD US)</a> to raise up to US$3.74bn. That would be substantially all of its stake.</li>
<li>There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.</li>
<li>There will be no passive buying from <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.</li>
</ul>


Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.


JD.com (9618 HK): Index Implications of Walmart Placement

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus; non-GAAP net income was RMB14.5bn, ahead of our forecast/consensus estimates at RMB9.9bn/9.6bn, thanks to stronger-than-expected GPM expansion aided by scale effect, as well as better-than-expected generation from other income.</li><li>Guided by stringent ROI target and benefited from the increasing economies of scale, we remain positive on JD’s earnings growth trajectory in 2H24.</li><li>However, apart from the additional benefits brought by nationwide home appliance trade-in activities, since the current share repurchase program has been largely utilized, JD needs to convince the market with its ability in retaining market share in core electronics and home appliance (E&amp;HA) category, in order to drive for further valuation rerating amid current market environment, in our view. Our DCF-based TP was unchanged at US$51.9. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus; non-GAAP net income was RMB14.5bn, ahead of our forecast/consensus estimates at RMB9.9bn/9.6bn, thanks to stronger-than-expected GPM expansion aided by scale effect, as well as better-than-expected generation from other income.Guided by stringent ROI target and benefited from the increasing economies of scale, we remain positive on JD’s earnings growth trajectory in 2H24.However, apart from the additional benefits brought by nationwide home appliance trade-in activities, since the current share repurchase program has been largely utilized, JD needs to convince the market with its ability in retaining market share in core electronics and home appliance (E&amp;HA) category, in order to drive for further valuation rerating amid current market environment, in our view. Our DCF-based TP was unchanged at US$51.9. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com Inc (ADR) (JD US)

ECM Weekly (26th Aug 2024) - Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! - Major Drivers

JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions. The company...

Baptista Research

JD.com (9618 HK): Index Implications of Walmart Placement

Walmart is looking to sell its entire stake in JD.com. The ADR is lower in the aftermarket and the HK-line is down 10.8%. Passive trackers will buy...

Brian Freitas

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus

CMB International

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ECM Weekly (26th Aug 2024) - Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

JD.com Inc.: Enhancing Platform Ecosystem For Third-Party Sellers As A Key Growth Catalyst! - Major Drivers

JD.com reported its second quarter and interim 2024 earnings, presenting a mixed performance amid challenging market conditions. The company...

Baptista Research

JD.com (JD US): Strong Profitability And Upsized Share Buyback in 2Q24

Two pieces of news: 1) According to public news, Wal-Mart is looking to offload its entire stake (144.5m ADRs) in JD.com at USD24.85 - USD25.85....

Steve

JD.com (9618 HK): Index Implications of Walmart Placement

Walmart is looking to sell its entire stake in JD.com. The ADR is lower in the aftermarket and the HK-line is down 10.8%. Passive trackers will buy...

Brian Freitas

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus

CMB International