Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Index for the September 2025 rebalance. That takes us to 88 constituents. </li>
<li>There were three ADDs - <a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart (9992 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> were expected. <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom (H) (728 HK)</a> was in our LOW conviction ranks but added.</li>
<li>It's not big at US$1.3bn to trade, but we have until 2 Sep to see capping or funding changes and the event will be effective 5 September at the close.</li>
</ul>


On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Index for the September 2025 rebalance. That takes us to 88 constituents. 
There were three ADDs - Pop Mart (9992 HK) and JD Logistics (2618 HK) were expected. China Telecom (H) (728 HK) was in our LOW conviction ranks but added.
It's not big at US$1.3bn to trade, but we have until 2 Sep to see capping or funding changes and the event will be effective 5 September at the close.


[Quiddity Index] Sep25 Hang Seng Index Review Announced; 3 ADDs, Now 88 Names

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>Investors had hoped to see tangible benefits of Taobao / Tmall access in Q424 results</li>
<li>But revenue growth acceleration was unimpressive, and core margins fell noticeably</li>
<li>We believe its disappointing Q424 numbers will result in near-term underperformance</li>
</ul>


Investors had hoped to see tangible benefits of Taobao / Tmall access in Q424 results
But revenue growth acceleration was unimpressive, and core margins fell noticeably
We believe its disappointing Q424 numbers will result in near-term underperformance


JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Despite being breakeven just quarters ago, <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;</li>
<li>JDL is still positioned to accelerate revenue by taking share from <a href="https://www.smartkarma.com/entities/s-f-holding" target="_blank" data-smartkarma-citation="entities:44093:1" rel="noopener">S.F. Holding (6936 HK)</a> in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;</li>
<li>JDL's stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;</li>
</ul>


Despite being breakeven just quarters ago, JD Logistics (2618 HK) has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;
JDL is still positioned to accelerate revenue by taking share from S.F. Holding (6936 HK) in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;
JDL's stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;


China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

<ul>
<li>With the exception of SF Holding, all listed express firms reported lower H1 OP%</li>
<li>SF's independence and unique product mix protected profits as volume surged</li>
<li>We suggest going Long SF Hldg against Short positions in ZTO &amp; J&amp;T</li>
</ul>


With the exception of SF Holding, all listed express firms reported lower H1 OP%
SF's independence and unique product mix protected profits as volume surged
We suggest going Long SF Hldg against Short positions in ZTO &amp; J&amp;T


Chinese Express Firms All Saw H1 OPM% Fall -- Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

<ul>
<li>Q424 revenue growth &amp; EBITDA margin both improved noticeably vs Q324 </li>
<li>Additionally, ZTO gave FY25 parcel volume guidance that implies an acceleration of growth</li>
<li>But "key" change in revenue mix is crushing cash returns (Q424 OpCF down -28% Y/Y)</li>
</ul>


Q424 revenue growth &amp; EBITDA margin both improved noticeably vs Q324 
Additionally, ZTO gave FY25 parcel volume guidance that implies an acceleration of growth
But "key" change in revenue mix is crushing cash returns (Q424 OpCF down -28% Y/Y)


Q424 ZTO Express Results & FY25 Guidance: Revenue Growth & Margin Better, But OpCF Shrinking; AVOID

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)

[Quiddity Index] Sep25 Hang Seng Index Review Announced; 3 ADDs, Now 88 Names

The Hang Seng Index adds 3 names getting us to 88 names. 12 more to go to 100 but still missing healthcare names. Telecom and JD Logistics are the...

Travis Lundy

JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits

JD Logistics' Q424 results showed no benefit from almost a full quarter's worth of access to Alibaba's Taobao / Tmall platforms. We believe...

Tracking Traffic

China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...

Blue Lotus Research Institute

Chinese Express Firms All Saw H1 OPM% Fall -- Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

SF Holding's unique position within China's eComm fulfillment space allowed it to successfully defend against the margin pressures that afflicted...

Tracking Traffic

Q424 ZTO Express Results & FY25 Guidance: Revenue Growth & Margin Better, But OpCF Shrinking; AVOID

ZTO's revenue momentum and core margin improved in Q424, but at the cost of deteriorating Cash Flow. We view the strong recent growth of "key...

Tracking Traffic

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Quiddity Index] Sep25 Hang Seng Index Review Announced; 3 ADDs, Now 88 Names

The Hang Seng Index adds 3 names getting us to 88 names. 12 more to go to 100 but still missing healthcare names. Telecom and JD Logistics are the...

Travis Lundy

JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits

JD Logistics' Q424 results showed no benefit from almost a full quarter's worth of access to Alibaba's Taobao / Tmall platforms. We believe...

Tracking Traffic

China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

​JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...

Blue Lotus Research Institute

Chinese Express Firms All Saw H1 OPM% Fall -- Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

SF Holding's unique position within China's eComm fulfillment space allowed it to successfully defend against the margin pressures that afflicted...

Tracking Traffic

Q424 ZTO Express Results & FY25 Guidance: Revenue Growth & Margin Better, But OpCF Shrinking; AVOID

ZTO's revenue momentum and core margin improved in Q424, but at the cost of deteriorating Cash Flow. We view the strong recent growth of "key...

Tracking Traffic

JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...