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

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.

<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 a leading industrial supply chain technology and service provider in China. It has launched an HKEx IPO to raise up to US$420 million.</li>
<li>I previously discussed the IPO in <em><strong><a href="https://www.smartkarma.com/insights/jingdong-industrials-jdi-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:212076" rel="noopener">Jingdong Industrials (JDI) IPO: The Investment Case</a></strong></em>. </li>
<li>In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.</li>
</ul>



JD Industrials (7618 HK) is a leading industrial supply chain technology and service provider in China. It has launched an HKEx IPO to raise up to US$420 million.
I previously discussed the IPO in Jingdong Industrials (JDI) IPO: The Investment Case. 
In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.


JD Industrials IPO (7618 HK): Valuation Insights

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

MSC Industrial Direct Co Inc / Equity Bottom-Up

<ul><li>MSC Industrial Supply reported a mixed set of results for its fiscal second quarter of 2025.</li><li>The company faced challenges in the current quarter, underscored by a decline in average daily sales by 4.7% year-over-year, indicating a soft demand environment.</li><li>This decline, however, showed slight improvements towards the end of the quarter, with January and February outperforming historical trends.</li></ul>

MSC Industrial Supply reported a mixed set of results for its fiscal second quarter of 2025.The company faced challenges in the current quarter, underscored by a decline in average daily sales by 4.7% year-over-year, indicating a soft demand environment.This decline, however, showed slight improvements towards the end of the quarter, with January and February outperforming historical trends.

MSC Industrial Direct Battles Tariffs with Bold Pricing Moves—Will It Pay Off?

<ul><li>MSC Industrial Supply Co.’s first-quarter fiscal 2025 performance reflects a mixture of both achievements and ongoing challenges in line with its strategic objectives and the current economic climate.</li><li>The company recorded a modest improvement against its sales expectations, with average daily sales surpassing initial guidance despite an overall 2.7% year-over-year decline.</li><li>This decline was narrower than anticipated, driven by growth in the public sector and sustained momentum in their solutions offerings, notably within November, though these gains are not seen as indicative of a long-term trend.</li></ul>

MSC Industrial Supply Co.’s first-quarter fiscal 2025 performance reflects a mixture of both achievements and ongoing challenges in line with its strategic objectives and the current economic climate.The company recorded a modest improvement against its sales expectations, with average daily sales surpassing initial guidance despite an overall 2.7% year-over-year decline.This decline was narrower than anticipated, driven by growth in the public sector and sustained momentum in their solutions offerings, notably within November, though these gains are not seen as indicative of a long-term trend.

MSC Industrial Direct Co Has Bold Investment Plans For Market Expansion But Will They Work? - Major Drivers

<ul><li>MSC Industrial Direct Co., Inc., in its fiscal third quarter 2024 earnings report, highlighted several key aspects of its current state and future strategies amid a challenging macroeconomic environment.</li><li>The company’s focus remains on improving its web initiatives, customer engagement, and operational efficiency while dealing with unexpected gross margin pressures and delays in strategic projects.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

MSC Industrial Direct Co., Inc., in its fiscal third quarter 2024 earnings report, highlighted several key aspects of its current state and future strategies amid a challenging macroeconomic environment.The company’s focus remains on improving its web initiatives, customer engagement, and operational efficiency while dealing with unexpected gross margin pressures and delays in strategic projects.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

MSC Industrial Direct Co: Initiation Of Coverage - Is Their Enhanced Digital Infrastructure A Key Growth Catalyst? - Major Drivers

United States

MSC Industrial Direct Co., Inc. is a direct marketer and supplier of a broad range of metalworking and maintenance and repair supplies. The Company markets its products to industrial customers throughout the United States.

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MSC Industrial Direct Co Inc (MSM US)

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 (7618 HK): Valuation Insights

JDI is seeking to raise up to US$420 million. In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is...

Arun George

MSC Industrial Direct Battles Tariffs with Bold Pricing Moves—Will It Pay Off?

MSC Industrial Supply reported a mixed set of results for its fiscal second quarter of 2025. The company faced challenges in the current quarter,...

Baptista Research

MSC Industrial Direct Co Has Bold Investment Plans For Market Expansion But Will They Work? - Major Drivers

MSC Industrial Supply Co.’s first-quarter fiscal 2025 performance reflects a mixture of both achievements and ongoing challenges in line with its...

Baptista Research

MSC Industrial Direct Co: Initiation Of Coverage - Is Their Enhanced Digital Infrastructure A Key Growth Catalyst? - Major Drivers

MSC Industrial Direct Co., Inc., in its fiscal third quarter 2024 earnings report, highlighted several key aspects of its current state and future...

Baptista Research

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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 (7618 HK): Valuation Insights

JDI is seeking to raise up to US$420 million. In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is...

Arun George

MSC Industrial Direct Battles Tariffs with Bold Pricing Moves—Will It Pay Off?

MSC Industrial Supply reported a mixed set of results for its fiscal second quarter of 2025. The company faced challenges in the current quarter,...

Baptista Research

MSC Industrial Direct Co Has Bold Investment Plans For Market Expansion But Will They Work? - Major Drivers

MSC Industrial Supply Co.’s first-quarter fiscal 2025 performance reflects a mixture of both achievements and ongoing challenges in line with its...

Baptista Research

MSC Industrial Direct Co: Initiation Of Coverage - Is Their Enhanced Digital Infrastructure A Key Growth Catalyst? - Major Drivers

MSC Industrial Direct Co., Inc., in its fiscal third quarter 2024 earnings report, highlighted several key aspects of its current state and future...

Baptista Research

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...