Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  </li>
<li>Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  </li>
<li>Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.</li>
</ul>


The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  
Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  
Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.


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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hangzhou-sf-intra-city-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:34916:1" rel="noopener">SF Intra-City (1874747D CH)</a> is the largest independent third-party on-demand delivery service provider in China. It is pre-marketing an HKEx IPO to raise up to $500 million, according to reports. </li>
<li>In <a href="https://www.smartkarma.com/insights/sf-intra-city-industrial-ipo-initiation-missed-delivery" target="_blank" data-smartkarma-citation="insights:60224" rel="noopener">SF Intra-City Industrial IPO Initiation: Missed Delivery</a>, we stated that it offers an unappetizing mix of high growth at the cost of gross losses and cash burn. </li>
<li>The PHIP which discloses 5M21 results continues to highlight the growth at all costs strategy. We continue to think that SF Intra-city’s fundamentals are less than inspiring. </li>
</ul>



SF Intra-City (1874747D CH) is the largest independent third-party on-demand delivery service provider in China. It is pre-marketing an HKEx IPO to raise up to $500 million, according to reports. 
In SF Intra-City Industrial IPO Initiation: Missed Delivery, we stated that it offers an unappetizing mix of high growth at the cost of gross losses and cash burn. 
The PHIP which discloses 5M21 results continues to highlight the growth at all costs strategy. We continue to think that SF Intra-city’s fundamentals are less than inspiring. 


SF Intra-City Industrial IPO: Delivering Losses

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

<p>For our next Webinar, we're excited to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a>, who will cover the upcoming rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> as it pushes towards its target of 80 index members by mid-2022.</p>
<h3>The webinar will be hosted on Wednesday, 17 November 2021, 17:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=85212464246" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Brian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse, and BNP Paribas.</p>
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For our next Webinar, we're excited to welcome back Insight Provider Brian Freitas, who will cover the upcoming rebalance of the Hong Kong Hang Seng Index (HSI INDEX) as it pushes towards its target of 80 index members by mid-2022.
The webinar will be hosted on Wednesday, 17 November 2021, 17:00 SGT/HKT.



Register for the Webinar here




Brian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse, and BNP Paribas.


Smartkarma Webinar | Potential Inclusions to the Hang Seng Index (HSI INDEX)

<p><a href="https://www.smartkarma.com/entities/hangzhou-sf-intra-city-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:34916:1" rel="noopener">SF Intra-City (1874747D CH)</a> is the largest independent third-party on-demand delivery service provider with an 11.0% market share in the 12 months ended 31 March 2021, according to iResearch. </p><p>SF Intra-city is seeking approval for an HKEx IPO to raise up to $500 million, according to press reports. SF Intra-city’s controlling shareholder is <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a>, which holds a 75.1% stake. </p><div class="content-highlight"><p>SF Intra-city offers an unappetizing mix of high growth at the cost of losses (at the gross profit level) and cash burn. In comparison to recent logistics IPOs such as <a href="https://www.smartkarma.com/entities/ane-logistics" target="_blank" data-smartkarma-citation="entities:34119:1" rel="noopener">ANE Logistics (1292621D CH)</a>, SF Intra-city’s disclosure particularly on unit cost economies is sorely lacking. On balance, we think that SF Intra-city’s fundamentals are less than inspiring. Considering the current weak sentiment on HKEx IPOs, this IPO warrants a pass. </p></div>

SF Intra-City (1874747D CH) is the largest independent third-party on-demand delivery service provider with an 11.0% market share in the 12 months ended 31 March 2021, according to iResearch. SF Intra-city is seeking approval for an HKEx IPO to raise up to $500 million, according to press reports. SF Intra-city’s controlling shareholder is S.F. Holding (002352 CH), which holds a 75.1% stake. SF Intra-city offers an unappetizing mix of high growth at the cost of losses (at the gross profit level) and cash burn. In comparison to recent logistics IPOs such as ANE Logistics (1292621D CH), SF Intra-city’s disclosure particularly on unit cost economies is sorely lacking. On balance, we think that SF Intra-city’s fundamentals are less than inspiring. Considering the current weak sentiment on HKEx IPOs, this IPO warrants a pass. 

SF Intra-City Industrial IPO Initiation: Missed Delivery

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.</p><p>The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>.</p><p>With Hang Seng Indexes looking to get up to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.</p><p>As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.</p><p>We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.</p><p>All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.</p><p>There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.</p>

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).With Hang Seng Indexes looking to get up to 80 Hong Kong Hang Seng Index (HSI INDEX) members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

China

JD Logistics, Inc. offers logistics services. The Company provides cargo transportation, cargo distribution, warehousing, and other services. JD Logistics is located in China.

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JD Logistics (2618 HK)

A Quiet Single Day

Another year another Single's Day, but the pandemic has put a damper on this year's shopping bonanza. Faced with a shrinking pie, a new player is...

Evelyn Zhang

SF Intra-City Industrial IPO: Delivering Losses

SF Intra-city is pre-marketing an HKEx IPO to raise up to $500 m. The PHIP continues to show that it offers an unappetizing mix of high growth at...

Arun George

Smartkarma Webinar | Potential Inclusions to the Hang Seng Index (HSI INDEX)

On Wednesday, 17 November, 5pm SGT, join our webinar with Brian Freitas, who will cover the upcoming rebalance of the Hong Kong Hang Seng Index.

Smartkarma Research

SF Intra-City Industrial IPO Initiation: Missed Delivery

SF Intra-city is seeking approval for an HKEx IPO to raise up to $500 m. We think that SF Intra-city’s fundamentals are less than inspiring and...

Arun George

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

The HSI has 60 members and the target is to reach 80 constituents over the next 3 rebalances. There could be a lot of stocks added at the Dec rebal...

Brian Freitas

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