HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

JINGDONG Industrials / Equity Capital Markets

<ul>
<li>Although <a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is China's largest MRO player, its maximum IPO price of HK$15.5 implies a rich FY26 PER of 28.2x.</li>
<li>The stock's highest justified valuation is a 20% premium to the sector average FY26F PER, implying only 8% upside from the IPO price, providing a limited safety margin.</li>
<li>We think it will only be attractive to price below the mid-point of the IPO range, that is, HK$14.10.</li>
</ul>


Although JD Industrials (7618 HK) is China's largest MRO player, its maximum IPO price of HK$15.5 implies a rich FY26 PER of 28.2x.
The stock's highest justified valuation is a 20% premium to the sector average FY26F PER, implying only 8% upside from the IPO price, providing a limited safety margin.
We think it will only be attractive to price below the mid-point of the IPO range, that is, HK$14.10.


JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is now looking to raise up to US$421m, in its Hong Kong IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.</li>
</ul>



JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.


JD Industrials IPO - Valuation Cut Means Its Priced to Go

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrial-technology-ltd" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrial Technology</a> is now looking to raise about US$500m in its upcoming HK IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We have looked at the company background and refiling updates in our previous notes. In this note, we will talk about the refiling updates.</li>
</ul>



JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and refiling updates in our previous notes. In this note, we will talk about the refiling updates.


JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

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

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a>'s stock price has more than doubled this year and the increased market cap could now result in a global index inclusion.</li>
<li>
<a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> has outperformed its peers by a BIG margin since its inclusion in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> in September 2024.</li>
<li>There appears to be significant positioning in the stock. Given the huge outperformance over the last few months, trim into strength.</li>
</ul>



Ryohin Keikaku (7453 JP)'s stock price has more than doubled this year and the increased market cap could now result in a global index inclusion.

Ryohin Keikaku (7453 JP) has outperformed its peers by a BIG margin since its inclusion in the Nikkei 225 (NKY INDEX) in September 2024.
There appears to be significant positioning in the stock. Given the huge outperformance over the last few months, trim into strength.


Ryohin Keikaku (7453 JP): Global Index Inclusion Likely in August

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.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/timee-inc" target="_blank" data-smartkarma-citation="entities:43690:1" rel="noopener">Timee Inc (215A JP)</a> ’s share price has been volatile during the last few months despite the company reporting a strong set of results for 1QFY10/2025. </li>
<li>Timee is the market leader in Japan while Mercari Hallo is still attempting to build its business. Our analysis shows that there is further room for Timee’s earnings to expand. </li>
<li>Some of Japanese high-growth companies (incl. Monotaro, GMO Payment and Shift) have traded at exorbitant multiples during their high growth phase and we think Timee’s valuation multiples are justified.</li>
</ul>



Timee Inc (215A JP) ’s share price has been volatile during the last few months despite the company reporting a strong set of results for 1QFY10/2025. 
Timee is the market leader in Japan while Mercari Hallo is still attempting to build its business. Our analysis shows that there is further room for Timee’s earnings to expand. 
Some of Japanese high-growth companies (incl. Monotaro, GMO Payment and Shift) have traded at exorbitant multiples during their high growth phase and we think Timee’s valuation multiples are justified.


Timee: Recent Setback in Share Price Offers an Attractive Entry Point

Japan

MonotaRO Co., Ltd. mainly sells machine tools, engine parts, and factory consumable goods on the web site.

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MonotaRO Co Ltd (3064 JP)

JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...

Osbert Tang, CFA

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO. In this note, we undertake an updated peer comparison and...

Sumeet Singh

Ryohin Keikaku (7453 JP): Global Index Inclusion Likely in August

Ryohin Keikaku's stock price has surged since NKY inclusion, and the increase in market cap should result in global index inclusion in August....

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JD Industrials (7618 HK) IPO: Only Attractive if Priced Cheaply

​JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...

Osbert Tang, CFA

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

JD Industrials Pre-IPO - Updated Peer Comparison and Thoughts on Valuations

JD Industrial Technology is now looking to raise about US$500m in its upcoming HK IPO. In this note, we undertake an updated peer comparison and...

Sumeet Singh

Ryohin Keikaku (7453 JP): Global Index Inclusion Likely in August

Ryohin Keikaku's stock price has surged since NKY inclusion, and the increase in market cap should result in global index inclusion in August....

Brian Freitas

Timee: Recent Setback in Share Price Offers an Attractive Entry Point

Timee will report 2Q earnings on 12th June and this insight offers a glimpse into the company's 1Q earnings and our view on the stock

Shifara Samsudeen, FCMA, CGMA

JD Industrials is China's largest MRO player, but its IPO price of HK$15.5 suggests a high valuation, limiting upside. To make it attractive, it...