ConsumerDaily Briefs

Consumer: JD Logistics, Zomato, Hello Inc, 361 Degrees International, Shiseido Company, Kraft Heinz Co, Matsumotokiyoshi Holdings Co., Ltd. and more

In today’s briefing:

  • JD Logistics IPO: Fast Entry Possibilities into MSCI, FTSE, China 50, HSCEI, HSTECH, HSCI
  • JD Logistics (京东物流) Pre-IPO – Index Implications – It Will Cut Close
  • Zomato (ZOM IN) | The “Desi” TAMinator
  • Hello (HI): Competition on the Ground, Hard to Reach Profitability
  • Asia HY Monthly – Oil & Gas Update (2021) – Lucror Analytics
  • Long Shiseido/Short KOSE As Japanese Cosmetics Shift Focus to Margin Expansion
  • Kraft Heinz: I Am Still Skeptical About This Warren Buffett’s Favorite
  • Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

JD Logistics IPO: Fast Entry Possibilities into MSCI, FTSE, China 50, HSCEI, HSTECH, HSCI

By Brian Freitas

JD Logistics (JDL HK) is a leading technology driven supply chain solutions and logistics services provider in China. The company started off as an in-house logistics department for the JD Group in 2007 and opened up to external customers in 2017.

JD Logistics (JDL HK) got the green light from the HKEX (388 HK) on 29 April and media reports indicate that the company is looking to raise US$4bn at a valuation of US$40bn. Pre-marketing is said to have started and the shares could start trading later this month.

The stock has a high probability of inclusion in the Hang Seng Tech Index (HSTECH INDEX) and Hang Seng Composite Index. A listing day rally is needed for inclusion to the Hang Seng China Enterprises Index (HSCEI INDEX), while inclusion in the MSCI Standard, FTSE All-World and FTSE China 50 indices depends on the cornerstone allocations (plus a listing day pop). 

In this Insight, we break down the possibility of the stock being included in the MSCI Standard index, the FTSE All-World index, the FTSE China 50 index, Hang Seng China Enterprises Index (HSCEI INDEX), Hang Seng Tech Index (HSTECH INDEX) and the Hang Seng Composite Index (HSCI).


JD Logistics (京东物流) Pre-IPO – Index Implications – It Will Cut Close

By Zhen Zhou, Toh

JD Logistics (JDL HK) is looking to raise US$4bn in its upcoming Hong Kong IPO. 

JD Logistics (JDL) was the leading supply chain solutions and logistics services provider in China in terms of revenue in 2018 and 2019. The company offers a full spectrum of supply chain solutions and logistics services ranging from warehousing to distribution, spanning across manufacturing to end-customers, covering regular and specialized items. 

In this note, we will take a brief look at index cut-offs and what are the potential inclusions for JDL’s upcoming IPO.

We had previously covered the IPO in:


Zomato (ZOM IN) | The “Desi” TAMinator

By Pranav Bhavsar

Zomato (ZOM IN) recently filed its DRHP with the SEBI last week. ZOM is one of the two Online Food Delivery (OFD) players in India, the other being Swiggy.

ZOM’s IPO is also the ray of hope for the many consumer tech and internet companies in India and thus is expected to be the one that receives the maximum attention.

India OFD is a multi-decade play, and hence rather than just one insight, ZOM will be in our coverage with multiple insights over various periods of time even post IPO. 

This Insight focuses on Total Addressable Market (TAM) and SAM (Serviceable Addressable Market) for OFD players in India along with an overview of the current market structure. 


Hello (HI): Competition on the Ground, Hard to Reach Profitability

By Ming Lu

  • The competition is mainly between Hello and Meituan.
  • Hello has to put more bikes than needed to push out Meituan’s bikes.
  • The room for price rise is limited.
  • We cannot see a profit in the near future.

About the company introduction, please see Hello Inc (哈罗出行) Pre-IPO – Nowhere near Being Sustainable by Zhen Zhou, Toh


Asia HY Monthly – Oil & Gas Update (2021) – Lucror Analytics

By Charles Macgregor

In this month’s “In-Focus” section, we provide an update on the Oil & Gas sector, including oil price development and projections, along with the associated drivers. 

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.


Long Shiseido/Short KOSE As Japanese Cosmetics Shift Focus to Margin Expansion

By Oshadhi Kumarasiri

We have high expectations for Japanese cosmetics in the post COVID era as we expect a significant bump in the sector’s operating margin due to a transformation in how marketing and advertising activities are conducted. Shiseido Company (4911 JP)’s new medium to long term plan, “WIN 2023 and Beyond” suggest that the company is targeting a 15.0% OP margin in 2023 and 18.0% by 2030. We won’t be surprised if Shiseido beat these estimates by around 2.0 percentage points as we think these margin estimates are towards the low side. With a 15-16% pre-COVID OP margin, the likelihood of OP margin improvement is rather low for Kose Corp (4922 JP) (possibly the lowest in the entire sector).


Kraft Heinz: I Am Still Skeptical About This Warren Buffett’s Favorite

By Vladimir Dimitrov, CFA

  • Kraft Heinz had been a very good performer over the past few months.
  • While this is definitely good news for shareholders, there are some long-lasting headwinds facing the company.
  • Gross profitability is one of the key metrics to watch as the implementation of the new strategy continues.

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

By Michael Causton

The merger of Matsumotokiyoshi Holdings Co., Ltd. (3088 JP) and Cocokara Fine (3098 JP) is just one symptom of the growing concentration of market share in the drugstore sector.

But the sector’s leaders are no longer just battling for dominance in drugstore retailing; increasingly drugstores are evolving far behind this niche sector.

Drugstore retailing is growing faster than any sector other than e-commerce because drugstores are positioned to meet customer needs for well-being, health and, nowadays, a broad range of daily necessities including food, and so becoming ever more integrated into consumers’ daily shopping experience.

Their eclectic ranges also mean they perform well in the middle of natural disasters and crises of various forms and many chains have seen good results thanks to earthquakes, extreme weather and especially thanks to Covid, but this doesn’t fully explain the sector’s success.

Crises may have helped, but Japan’s top drugstores are today some of the country’s best retailers in their own right.

The following is a complete, in-depth review of the drugstore sector, including rankings, KPIs, and future trends on the sector and the potential winners.

Jun Tsuruha, the current Tsuruha Holdings (3391 JP) CEO, was widely quoted last year as saying the sector would soon be dominated by just “four or five” major firms. This is far from fantasy, with Tsuruha, Welcia Holdings (3141 JP), Matsukiyo-Cocokara, Cosmos Pharmaceutical (3349 JP) and Sugi Holdings (7649 JP) the most likely contenders.


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