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

<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares <a href="https://inews.hket.com/article/2967663/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E4%BA%AC%E6%9D%B1%E7%89%A9%E6%B5%812618%E6%9A%97%E7%9B%A4%E5%8D%87%E9%80%BE3%E6%88%90%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA%E7%B4%841200%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">stood 31% higher</a> at HK$53.00 in the Futu securities' grey market.</p><div>
<p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:51524" rel="noopener">JD Logistics IPO: Valuation Insights</a>, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.</p>
<div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. </p></div>
</div>

JD Logistics (2618 HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics will commence trading on Friday, 28 May. JD Logistics priced its IPO at HK$40.36 and the shares stood 31% higher at HK$53.00 in the Futu securities' grey market.
In JD Logistics IPO: Prioritizing Market Share Gains over Margins, we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. In JD Logistics IPO: Valuation Insights, we noted that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth.
Updating for the final IPO net raise, our base-case DCF derived price target is HK$48.91 per share. Our DCF sensitivity and relative valuation analysis shows that the IPO price is attractive and the grey market price is justifiable. 


APAC IPOs & Placements

Zhen Zhou, Toh

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.

<div>
<p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO. </p>
</div>
<div>
<p>JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. </p>
</div>
<div>
<p>In this note, we will discuss deal dynamics and update valuation.</p>
</div>
<div>
<p>We had previously covered the IPO in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-ipo-updated-index-implications-and-impact-on-jd-com-holdco-valuation" target="_blank" data-smartkarma-citation="insights:51591" rel="noopener">JD Logistics (京东物流) IPO - Updated Index Implications and Impact on JD.com (京东) HoldCo Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-ipo-widening-its-lead" target="_blank" data-smartkarma-citation="insights:51583" rel="noopener">JD Logistics (京东物流) IPO - Widening Its Lead</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-index-implications-it-will-cut-close" target="_blank" data-smartkarma-citation="insights:51054" rel="noopener">JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-quick-note-new-phip-with-1q21-results-changes-narrative" target="_blank" data-smartkarma-citation="insights:51453" rel="noopener">JD Logistics (京东物流) Pre-IPO - Quick Note - New PHIP with 1Q21 Results Changes Narrative</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-phip-updates-and-fine-tuning-valuation" target="_blank" data-smartkarma-citation="insights:51008" rel="noopener">JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-thoughts-on-valuation" target="_blank" data-smartkarma-citation="insights:50953" rel="noopener">JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-peer-comparison-shielded-from-price-war" target="_blank" data-smartkarma-citation="insights:50575" rel="noopener">JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-logistics-pre-ipo-tethered-to-jd-group-and-looking-beyond" target="_blank" data-smartkarma-citation="insights:48396" rel="noopener">JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond</a> </li>
</ul>
</div>


JD Logistics (2618 HK) raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO. 


JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. 


In this note, we will discuss deal dynamics and update valuation.


We had previously covered the IPO in:




JD Logistics (京东物流) IPO - Updated Index Implications and Impact on JD.com (京东) HoldCo Valuation 

JD Logistics (京东物流) IPO - Widening Its Lead 

JD Logistics (京东物流) Pre-IPO - Index Implications - It Will Cut Close 

JD Logistics (京东物流) Pre-IPO - Quick Note - New PHIP with 1Q21 Results Changes Narrative 

JD Logistics (京东物流) Pre-IPO - PHIP Updates and Fine-Tuning Valuation 

JD Logistics (京东物流) Pre-IPO - Thoughts on Valuation 

JD Logistics (京东物流) Pre-IPO - Peer Comparison - Shielded from Price War 

JD Logistics (京东物流) Pre-IPO - Tethered to JD Group and Looking Beyond 



JD Logistics (京东物流) IPO Trading - Decent Demand + Updates to JD.com Valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>The final price is <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0527/2021052700025.pdf" target="_blank" rel="noopener">HK$40.36</a> for <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a>, the logistics spin-off of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, which is towards the low-end of the HK$39.36-HK$43.36 IPO range. This will raise HK$24.6bn and give a market cap of HK$245.9bn - both figures before over-allotment.</p>
<p>Shares commence trading tomorrow.</p>
</div>
<div>
<p>Reportedly the retail proportion is 700x+ oversubscribed, with a grey price of HK$64/share, a 58% premium.</p>
</div>
<div>
<p>JD.com's shares are down 31% from its recent high in February after anti-trust regulators in China sought to overhaul the country's largest tech companies.  At the IPO price, JD logistics accounts for ~12% of JD.com's NAV.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


The final price is HK$40.36 for JD Logistics (2618 HK), the logistics spin-off of JD.com Inc. (9618 HK), which is towards the low-end of the HK$39.36-HK$43.36 IPO range. This will raise HK$24.6bn and give a market cap of HK$245.9bn - both figures before over-allotment.
Shares commence trading tomorrow.


Reportedly the retail proportion is 700x+ oversubscribed, with a grey price of HK$64/share, a 58% premium.


JD.com's shares are down 31% from its recent high in February after anti-trust regulators in China sought to overhaul the country's largest tech companies.  At the IPO price, JD logistics accounts for ~12% of JD.com's NAV.


More below the fold.


JD Logistics (2618 HK): Priced Towards The Low End

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>Online marketing is replacing live streaming as the largest business.</li>
<li>In live streaming, live sales are replacing dancing shows.</li>
<li>The company is aggressively spending its money from IPO.</li>
<li>We believe the stock has a downside of 17%.</li>
</ul>


Online marketing is replacing live streaming as the largest business.
In live streaming, live sales are replacing dancing shows.
The company is aggressively spending its money from IPO.
We believe the stock has a downside of 17%.


Kuaishou (1024 HK): 1Q21, Still in a Time of Change

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.

Kuaishou Technology / Equity Capital Markets

<div>The Chinese short-video and livestreaming platform <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>  reported its 1Q2021 results today (24th May). Kuaishou’s revenues for the quarter grew 36.6% YoY driven by strong growth in revenue from Online Marketing services which helped offset YoY drop in revenue from Live Streaming. Kuaishou’s revenue for the quarter declined 6.0% on a quarter-over-quarter basis due to huge drop in live streaming revenues which declined 8.2% QoQ during 1Q21.</div><div></div><div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/208/522/original/image_63846562621621867858258.png?1621867860" class="editor-image img-responsive" data-smartkarma-image-id="208522"></figure></div><div>Kuaishou’s gross profit margin for the quarter improved to 41.1% compared to 34.2% a year ago benefitting from a favourable revenue mix. On the other hand, operating losses for the quarter increased to 42.8% of revenues from 40.3% in the same quarter a year ago.</div>

The Chinese short-video and livestreaming platform Kuaishou Technology (1024 HK)  reported its 1Q2021 results today (24th May). Kuaishou’s revenues for the quarter grew 36.6% YoY driven by strong growth in revenue from Online Marketing services which helped offset YoY drop in revenue from Live Streaming. Kuaishou’s revenue for the quarter declined 6.0% on a quarter-over-quarter basis due to huge drop in live streaming revenues which declined 8.2% QoQ during 1Q21.Kuaishou’s gross profit margin for the quarter improved to 41.1% compared to 34.2% a year ago benefitting from a favourable revenue mix. On the other hand, operating losses for the quarter increased to 42.8% of revenues from 40.3% in the same quarter a year ago.

Kuaishou: Online Ad Drives Top Line Growth; Margins to Remain Under Pressure with Overseas Expansion

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

JD Logistics IPO: Trading Debut

JD Logistics priced its IPO at HK$40.36 and stood 31% higher at HK$53.00 in the grey market. Our DCF sensitivity and relative valuation analysis...

Arun George

JD Logistics (京东物流) IPO Trading - Decent Demand + Updates to JD.com Valuation

JD Logistics (2618 HK) is raised US$3.1bn at HK$40.36 per share, close to the bottom-end of its price range in its Hong Kong IPO.

Zhen Zhou, Toh

JD Logistics (2618 HK): Priced Towards The Low End

There are a lot of positive assumptions baked into J.D. Logistics price. I tilt more positive towards to JD.com. Despite the regulatory overhang,...

David Blennerhassett

Kuaishou (1024 HK): 1Q21, Still in a Time of Change

Online marketing is replacing live streaming as the largest business. In live streaming, live sales are replacing dancing shows. The company is...

Ming Lu

Kuaishou: Online Ad Drives Top Line Growth; Margins to Remain Under Pressure with Overseas Expansion

Kuaishou’s 1Q2021 results reveal that the company’s live streaming business growth is declining after seeing a boost during the pandemic last year.

Shifara Samsudeen, FCMA, CGMA

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