Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Equity Bottom-Up

<h2>Growth of low end driven by Pinduoduo</h2>
<p>The growth of <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> has spurred growth in China’s express market over the last two years, accounting for 60% or more of incremental growth in parcel volume in 2018. PDD’s emergence has boosted parcel volume growth, but this gift has come at a price: to win business from the merchants operating on PDD’s platform, express companies must offer rock-bottom pricing.</p>
<h2>Volume growth a nice gift, but it comes with a price</h2>
<p>PDD’s emergence offers strong volume growth, accompanied by downward pressure on pricing and margins. To combat these pressures, express companies must aggressively pursue parcel volume share in order to reduce unit costs (and thereby limit margin erosion). With most small express players squeezed out, we believe price competition among the remaining express firms is intensifying, with average parcel pricing down by 12-16% YoY in recent months.</p>
<h2>At high end of express &amp; logistics, less competition</h2>
<p>Away from intensifying competition at the low-end of the express sector, the high-end of China’s express segment features pockets of growth with muted competition. In time-definite (i.e., ‘overnight’) express, international express, supply chain management, and cold-chain logistics, providers tend to compete based on service levels, and their customers tend to be less price-sensitive than those at the low-end of the market. Underlying demand for these services is powered by a gradual ‘consumption upgrade’, helping merchants move high-value goods faster and more reliably compared to mainstream express products. We believe these segments offer shelter from the price competition that has emerged at the low-end of the express sector.</p>
<h2>Express market is bifurcating</h2>
<p>We see two distinct segments developing within express. At the low end, most of the listed express companies are aggressively pursuing volume share gains in order to reduce costs so they can profitably handle the low-priced parcels that are driving sector growth. Meanwhile, at the high end, SF Holding is successfully courting customers who value speed and reliability ahead of low prices. We expect profitability in this latter segment to remain fairly stable, while at the low end we expect profitability to continue eroding.</p>
<h2>Low-end pressure adds to rising capex demand, sliding returns</h2>
<p>The development of a bifurcated market comes at the same time most Chinese express companies are already facing pressures on cash flow and profitability. We believe most of the listed express companies are increasing capital expenditures in order to expand ‘last mile’ service and to build out needed infrastructure in smaller cities and rural areas. We suspect initial returns on these types of investments will be low, compounding downward pressure on margins related to PDD’s rise.</p>
<h2>Focus on high end should produce better results going forward</h2>
<p>Strong downward pressures on margins will make it increasingly difficult for most express companies to convert strong top-line growth into attractive earnings growth. In the medium-term, we believe companies with limited exposure to low-end parcel volumes are more likely to generate attractive strongest earnings growth. </p>

Growth of low end driven by Pinduoduo
The growth of Pinduoduo (PDD US) has spurred growth in China’s express market over the last two years, accounting for 60% or more of incremental growth in parcel volume in 2018. PDD’s emergence has boosted parcel volume growth, but this gift has come at a price: to win business from the merchants operating on PDD’s platform, express companies must offer rock-bottom pricing.
Volume growth a nice gift, but it comes with a price
PDD’s emergence offers strong volume growth, accompanied by downward pressure on pricing and margins. To combat these pressures, express companies must aggressively pursue parcel volume share in order to reduce unit costs (and thereby limit margin erosion). With most small express players squeezed out, we believe price competition among the remaining express firms is intensifying, with average parcel pricing down by 12-16% YoY in recent months.
At high end of express &amp; logistics, less competition
Away from intensifying competition at the low-end of the express sector, the high-end of China’s express segment features pockets of growth with muted competition. In time-definite (i.e., ‘overnight’) express, international express, supply chain management, and cold-chain logistics, providers tend to compete based on service levels, and their customers tend to be less price-sensitive than those at the low-end of the market. Underlying demand for these services is powered by a gradual ‘consumption upgrade’, helping merchants move high-value goods faster and more reliably compared to mainstream express products. We believe these segments offer shelter from the price competition that has emerged at the low-end of the express sector.
Express market is bifurcating
We see two distinct segments developing within express. At the low end, most of the listed express companies are aggressively pursuing volume share gains in order to reduce costs so they can profitably handle the low-priced parcels that are driving sector growth. Meanwhile, at the high end, SF Holding is successfully courting customers who value speed and reliability ahead of low prices. We expect profitability in this latter segment to remain fairly stable, while at the low end we expect profitability to continue eroding.
Low-end pressure adds to rising capex demand, sliding returns
The development of a bifurcated market comes at the same time most Chinese express companies are already facing pressures on cash flow and profitability. We believe most of the listed express companies are increasing capital expenditures in order to expand ‘last mile’ service and to build out needed infrastructure in smaller cities and rural areas. We suspect initial returns on these types of investments will be low, compounding downward pressure on margins related to PDD’s rise.
Focus on high end should produce better results going forward
Strong downward pressures on margins will make it increasingly difficult for most express companies to convert strong top-line growth into attractive earnings growth. In the medium-term, we believe companies with limited exposure to low-end parcel volumes are more likely to generate attractive strongest earnings growth. 

Bifurcated Chinese Express Market Developing

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anjoy-foods-group" target="_blank" data-smartkarma-citation="entities:44280:1" rel="noopener">Anjoy Foods Group (2648 HK)</a>'s rally since reporting 3Q25 results is prompted by solid revenue and margin recovery. Its HA discount has narrowed 6.1pp from IPO. </li>
<li>Sales model and geographical optimisation has driven business outlook. With projected EPS CAGR of 10.4%, it is now in line with the sector momentum.</li>
<li>Its PEG of 1.4x is below peer's average of 1.9x. With net cash equalling 15.1% of its share price, it can deliver a decent 5.4% FY26F dividend yield.</li>
</ul>



Anjoy Foods Group (2648 HK)'s rally since reporting 3Q25 results is prompted by solid revenue and margin recovery. Its HA discount has narrowed 6.1pp from IPO. 
Sales model and geographical optimisation has driven business outlook. With projected EPS CAGR of 10.4%, it is now in line with the sector momentum.
Its PEG of 1.4x is below peer's average of 1.9x. With net cash equalling 15.1% of its share price, it can deliver a decent 5.4% FY26F dividend yield.


Anjoy Foods Group (2648 HK): The Start or the End of a Rally?

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>We see 28 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.</li>
<li>A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 28 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 4th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kingsoft (3888 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Chow Tai Fook Jewellery (1929 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 4th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kingsoft (3888 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Chow Tai Fook Jewellery (1929 HK).


Hong Kong Buybacks Weekly (Jul 4th): Tencent, AIA, Kingsoft

Equity Capital Markets

Anjoy Foods Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anjoy-foods-group" target="_blank" data-smartkarma-citation="entities:44280:1" rel="noopener">Anjoy Foods Group (2648 HK)</a>'s H-share IPO at a maximum price of HK$66.00 appears reasonably attractive, as this equals a 33-34% discount to peer average FY25F PER. </li>
<li>It is well-positioned to capture quick-frozen food demand growth, will gain from geographical and market share expansion, and has solid product, marketing and production capability.</li>
<li>We value the stock at HK$72.66, 12.7x FY25F PER, or a 25% discount to the sector PER. It will also be on a 13.9% discount to its A-share.</li>
</ul>



Anjoy Foods Group (2648 HK)'s H-share IPO at a maximum price of HK$66.00 appears reasonably attractive, as this equals a 33-34% discount to peer average FY25F PER. 
It is well-positioned to capture quick-frozen food demand growth, will gain from geographical and market share expansion, and has solid product, marketing and production capability.
We value the stock at HK$72.66, 12.7x FY25F PER, or a 25% discount to the sector PER. It will also be on a 13.9% discount to its A-share.


Anjoy Foods Group (2648 HK) IPO: Reasonably Attractive

China

Zhou Hei Ya International Holdings produces casual braised food with a specialisation in braised duck products.

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Zhou Hei Ya International (1458 HK)

Bifurcated Chinese Express Market Developing

We will write more about SF Holding soon as the company prepares to seek a secondary listing in Hong Kong. But we believe some of the themes we...

Daniel Hellberg

Anjoy Foods Group (2648 HK): The Start or the End of a Rally?

Anjoy's strong revenue and margin recovery for 3Q25 drive the post-results rally. The improved earnings projection will support a narrower...

Osbert Tang, CFA

HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added

The forecast adds to the index and Stock Connect are up 9.7% on average this month while the forecast deletes from the index and Stock Connect are...

Brian Freitas

Hong Kong Buybacks Weekly (Jul 4th): Tencent, AIA, Kingsoft

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Anjoy Foods Group (2648 HK) IPO: Reasonably Attractive

Anjoy Foods Group's H-share IPO at HK$66.00 offers a 33-34% FY25 PER discount to peers. With strong growth potential, solid capabilities and sound...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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Bifurcated Chinese Express Market Developing

We will write more about SF Holding soon as the company prepares to seek a secondary listing in Hong Kong. But we believe some of the themes we...

Daniel Hellberg

Anjoy Foods Group (2648 HK): The Start or the End of a Rally?

​Anjoy's strong revenue and margin recovery for 3Q25 drive the post-results rally. The improved earnings projection will support a narrower...

Osbert Tang, CFA

HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added

The forecast adds to the index and Stock Connect are up 9.7% on average this month while the forecast deletes from the index and Stock Connect are...

Brian Freitas

Hong Kong Buybacks Weekly (Jul 4th): Tencent, AIA, Kingsoft

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Anjoy Foods Group (2648 HK) IPO: Reasonably Attractive

​Anjoy Foods Group's H-share IPO at HK$66.00 offers a 33-34% FY25 PER discount to peers. With strong growth potential, solid capabilities and sound...

Osbert Tang, CFA

Anjoy's strong revenue and margin recovery for 3Q25 drive the post-results rally. The improved earnings projection will support a narrower...

Anjoy Foods Group's H-share IPO at HK$66.00 offers a 33-34% FY25 PER discount to peers. With strong growth potential, solid capabilities and sound...