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Sometimes, the best part of shopping online is waiting for the package to turn up. That takes an efficient express delivery service. In Asia the sector is booming, fuelling the rapid growth of start-ups like Indonesia’s J&T Global Express. Investors can now anticipate its arrival on the stock market.
J&T Global Express plans to raise up to HK$3.9bn ($500mn) in Hong Kong. At an expected market valuation of $13.5bn it would be the city’s second-largest listing this year.
It is raising less than expected. The valuation is below the $20bn private valuation it received at a funding round two years ago. At the expected valuation of $13.5bn, J&T would be valued at a discount to regional peers on an enterprise value-to-sales multiple basis.
Yet that has less to do with its prospects and more to do with a weak global initial public offering market. In Hong Kong there were 44 listings in the first three quarters, down about two-thirds from last year. The Hang Seng index is down more than 12 per cent this year.
J&T has enjoyed a streak of good luck and good timing. After launching in Indonesia in 2015 it was well positioned to take advantage of the ecommerce boom in south-east Asia. It quickly became the largest ecommerce delivery service in the region.
Its launch in China in 2020 came just in time for the ecommerce boost from pandemic-related distancing requirements. It is now one of the top five courier services in China.
The strength of Asian demand and the ability to secure large corporate clients has given companies the chance to turn profitable more rapidly than start-ups in other industries. The logistics market in Asia Pacific is a nearly $4tn market yet still has a low market concentration. That has made the sector home to some of the most valuable unicorns in the region.
Two other top regional rivals, Cainiao Smart Logistics and SF Holding filed this year for listings in the city. J&T’s listing next week will set the tone for its rivals’ valuations.
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