Global Healthcare Analyst

Tina Banerjee

Equity Capital Markets

<ul>
<li>JD Industrial launched its Hongkong IPO aiming to raise up to HK$3.3B. The company plans to sell 211.2M shares at a price band of HK$ 12.7-HK$ 15.5 per share.</li>
<li>Proceeds to be used to enhance industrial supply chain capabilities, for business expansion across geographies, for potential strategic investments or acquisitions and for general corporate purposes and working capital needs.</li>
<li>Topline growth momentum expected to remain strong in the near term alongside strengthening margins. We feel JD Industrial issue is fairly priced and investors can surely subscribe to the offer.</li>
</ul>


JD Industrial launched its Hongkong IPO aiming to raise up to HK$3.3B. The company plans to sell 211.2M shares at a price band of HK$ 12.7-HK$ 15.5 per share.
Proceeds to be used to enhance industrial supply chain capabilities, for business expansion across geographies, for potential strategic investments or acquisitions and for general corporate purposes and working capital needs.
Topline growth momentum expected to remain strong in the near term alongside strengthening margins. We feel JD Industrial issue is fairly priced and investors can surely subscribe to the offer.


JD Industrial IPO: Structural Efficiency, Asset Light Model, Upscaling Paves Way for Growth

HK/China Equity Long-Short

Osbert Tang, CFA

<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

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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>JD Industrials’ business model integrates the advantageous resources of JD Group and follows "self-operated heavy asset" route.The operation model is to rely on JD Logistics network to achieve efficient performance.</li>
<li>The platform's openness of JD Industrials is relatively limited. The entry and listing thresholds for merchants are higher than that of peers, which limits the rapid expansion of product richness.</li>
<li>P/S is more appropriate because net profit fluctuates greatly and is more suitable for growth-oriented supply chain companies.JD Industrials’ valuation could be higher than ZKH but lower than <a href="https://www.smartkarma.com/entities/ww-grainger-inc" target="_blank" data-smartkarma-citation="entities:20019:1" rel="noopener">Ww Grainger.</a>   </li>
</ul>


JD Industrials’ business model integrates the advantageous resources of JD Group and follows "self-operated heavy asset" route.The operation model is to rely on JD Logistics network to achieve efficient performance.
The platform's openness of JD Industrials is relatively limited. The entry and listing thresholds for merchants are higher than that of peers, which limits the rapid expansion of product richness.
P/S is more appropriate because net profit fluctuates greatly and is more suitable for growth-oriented supply chain companies.JD Industrials’ valuation could be higher than ZKH but lower than Ww Grainger.   


Pre-IPO JD Industrials (PHIP Updates) - Business Model, Peer Comparison, Forecast and Valuation

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ZKH Group (ZKH US)

JD Industrial IPO: Structural Efficiency, Asset Light Model, Upscaling Paves Way for Growth

JD Industrial launched IPO to raise up to HK$3.3B for supply chain enhancement, expansion, and strategic investments. Strong growth and expanding...

Tina Banerjee

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

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

Pre-IPO JD Industrials (PHIP Updates) - Business Model, Peer Comparison, Forecast and Valuation

JD Industrials' business model integrates resources from JD Group, utilizing JD Logistics for efficiency.Higher entry thresholds may hinder...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JD Industrial IPO: Structural Efficiency, Asset Light Model, Upscaling Paves Way for Growth

​JD Industrial launched IPO to raise up to HK$3.3B for supply chain enhancement, expansion, and strategic investments. Strong growth and expanding...

Tina Banerjee

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

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

Pre-IPO JD Industrials (PHIP Updates) - Business Model, Peer Comparison, Forecast and Valuation

​JD Industrials' business model integrates resources from JD Group, utilizing JD Logistics for efficiency.Higher entry thresholds may hinder...

Xinyao (Criss) Wang

JD Industrial launched IPO to raise up to HK$3.3B for supply chain enhancement, expansion, and strategic investments. Strong growth and expanding...

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...

JD Industrials' business model integrates resources from JD Group, utilizing JD Logistics for efficiency.Higher entry thresholds may hinder...