JD Logistics: Fair Value Estimate Maintained at HKD 10.70; Shares Cheap

We keep JD Logistics’, or JDL’s, fair value estimate at HKD 10.70 per share, after reviewing our earnings assumptions. While we raise our EBIT estimates to account for better cost control and improving operating efficiency, these are offset by higher noncontrolling interests, largely due to Deppon Logistics, or Deppon, that were acquired in July 2022. We think JDL is undervalued currently and we believe JDL’s ongoing consolidation of the fragmented integrated supply chain industry in China will underpin its long-term growth.