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

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

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 weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.</li>
<li>ECM developments: <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> H Share listing,<a href="https://www.smartkarma.com/entities/finetoday-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:44092:1" rel="noopener">FineToday Holdings Co Ltd (289A JP)</a> IPO, <a href="https://www.smartkarma.com/entities/kansai-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:18907:1" rel="noopener">Kansai Electric Power (9503 JP)</a>'s US$3.5 billion placement.</li>
<li>Event-Driven developments: <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/kadokawa-dwango-corp" target="_blank" data-smartkarma-citation="entities:4152:1" rel="noopener">Kadokawa Dwango (9468 JP)</a>, <a href="https://www.smartkarma.com/entities/integrated-design-engineering-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:44096:1" rel="noopener">Integrated Design &amp; Engineering Holdings (9161 JP)</a>, <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, <a href="https://www.smartkarma.com/entities/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)</a>.
</li>
</ul>


A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: S.F. Holding (6936 HK) H Share listing,FineToday Holdings Co Ltd (289A JP) IPO, Kansai Electric Power (9503 JP)'s US$3.5 billion placement.
Event-Driven developments: Seven &amp; I Holdings (3382 JP), Kadokawa Dwango (9468 JP), Integrated Design &amp; Engineering Holdings (9161 JP), HKBN Ltd (1310 HK), Arcadium Lithium (LTM AU).



Weekly Deals Digest (24 Nov) - SF Holding, FineToday, KEPCO, Seven & I, Kadokawa, HKBN, Arcadium

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.

<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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>One important reason S.F. chose to go public on Hong Kong stock market is due to financial pressure, which mainly comes from its heavy asset development model and internationalization strategy.</li>
<li>Considering the discount of the H-share price versus the A-share price, if the IPO pricing is at the lower limit of the range, then the safety margin would be higher.</li>
<li>In the short term, S.F. is better than JD Logistics, so its valuation should be higher than JD Logistics and industry average. Future valuation expansion depends on international business performance.</li>
</ul>


One important reason S.F. chose to go public on Hong Kong stock market is due to financial pressure, which mainly comes from its heavy asset development model and internationalization strategy.
Considering the discount of the H-share price versus the A-share price, if the IPO pricing is at the lower limit of the range, then the safety margin would be higher.
In the short term, S.F. is better than JD Logistics, so its valuation should be higher than JD Logistics and industry average. Future valuation expansion depends on international business performance.


Pre-IPO S.F. Holding (6936 HK) - Thoughts on Valuation and the Outlook

China

S.F. Holding Co., Ltd operates as a holding company. The Company, through its subsidiaries, provides logistics, order tracking, supply chain management, and warehousing services. S.F. Holding operates worldwide.

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S.F. Holding (002352 CH)

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

Weekly Deals Digest (24 Nov) - SF Holding, FineToday, KEPCO, Seven & I, Kadokawa, HKBN, Arcadium

Last week, notable developments occurred in Event-Driven (Seven & I, Kadokawa, Integrated Design & Engineering, HKBN, Arcadium) and ECM (SF...

Arun George

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

Pre-IPO S.F. Holding (6936 HK) - Thoughts on Valuation and the Outlook

S.F. faces financial pressure due to heavy asset model. IPO pricing at lower limit offers higher safety margin.Valuation will be higher than...

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

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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

Weekly Deals Digest (24 Nov) - SF Holding, FineToday, KEPCO, Seven & I, Kadokawa, HKBN, Arcadium

Last week, notable developments occurred in Event-Driven (Seven & I, Kadokawa, Integrated Design & Engineering, HKBN, Arcadium) and ECM (SF...

Arun George

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

Pre-IPO S.F. Holding (6936 HK) - Thoughts on Valuation and the Outlook

​S.F. faces financial pressure due to heavy asset model. IPO pricing at lower limit offers higher safety margin.Valuation will be higher than...

Xinyao (Criss) Wang

S.F. faces financial pressure due to heavy asset model. IPO pricing at lower limit offers higher safety margin.Valuation will be higher than...