Additions to crypto basket; JD Logistics rides the e-commerce bonanza Additions to crypto basket; JD Logistics rides the e-commerce bonanza Additions to crypto basket; JD Logistics rides the e-commerce bonanza

Additions to crypto basket; JD Logistics rides the e-commerce bonanza

Equities 6 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  May has been tough for cryptocurrencies and our crypto basket has also suffered, but much less than cryptocurrencies themselves, making it the worst performing theme in May. We are adding five new companies to our crypto and blockchain theme basket including the Swedish-based crypto broker Safello Group that has just IPO'ed in Stockholm. JD Logistics have just IPO'ed in Hong Kong providing investors with a pure play on logistics in China which is essentially a play on e-commerce but from a different angle than the typical retailing perspective.


Our crypto and blockchain theme basket has been the worst performing basket this month down 18.1% as cryptocurrencies have experience extreme volatility and an intra-month maximum drawdown of 49.6% in Bitcoin (see chart). The divergence in performance between Bitcoin prices and the crypto theme basket shows that the companies in the basket are not purely driven by cryptocurrency prices. This means that our theme basket provides a different exposure profile to the crypto industry than just speculating on cryptocurrencies.

Source: Bloomberg

Safello Group, which is Swedish-based crypto broker, recently IPO’ed in Stockholm, and we are using this IPO as an opportunity to add some new companies to our theme basket. In this update we are adding the five companies Safello Group, Northern Data, Quickbit, Taal Distributed, and Digihost expanding the theme basket to 23 companies representing $97.7bn in combined market value. As the table shows, the median price target is 56% above the current price suggesting that analysts remain very bullish on this industry despite the recent volatility. We do not have a firm view on this industry except that outright speculation is for now the main activity in cryptocurrencies and that the industry still need to prove that it can be other than pure speculation.

NameSegmentMarket Cap (USD mn.)Sales growth (%)P/BDiff to PT (%)5yr return
Coinbase Global IncCrypto exchange51,558139.348.557.9NA
Signature Bank/New York NYBank14,4082.52.216.492.4
Galaxy Digital Holdings LtdCrypto services6,009NA3.873.61,115.4
MicroStrategy IncInvestment firm4,8132.013.239.7158.7
Marathon Digital Holdings IncCrypto mining2,570735.03.887.7-39.7
Riot Blockchain IncCrypto mining2,398322.16.528.1846.0
Silvergate Capital CorpBank2,990NA4.135.6NA
Voyager Digital LtdCrypto broker2,98213,223.929.864.0NA
Canaan IncInfrastructure1,571-68.5313.4NANA
Monex Group IncFinancial institution2,02847.02.5-1.2245.3
Hive Blockchain Technologies LtdCrypto mining1,00712.516.5NANA
Argo Blockchain PLCCrypto mining848120.019.553.4NA
Hut 8 Mining CorpCrypto mining542-26.82.1109.9NA
Bit Digital IncCrypto mining456NA0.0NANA
Bitfarms Ltd/CanadaCrypto mining6497.025.847.9NA
Bitcoin Group SECrypto broker248-44.46.7NANA
Future FinTech Group IncBlockchain e-commerce227-81.54.2NA79.8
DMG Blockchain Solutions IncInvestment firm125NA12.4NANA
Safello Group AB (*)Crypto broker5749.4NANANA
Northern Data AG (*)Infrastructure1,793253.710.869.8NA
Quickbit EU AB (*)Crypto payment services137NA4.3NANA
Taal Distributed Information Technologies Inc (*)Blockchain platform134NA3.060.8310.9
Digihost Technology Inc (*)Crypto mining125NA2.3NANA
Aggregate / median97,67729.85.455.6202.0

Source: Bloomberg and Saxo Group
* Added to theme basket on 28 May 2021
** Infrastructure segment means physical computing applications for crypto mining

How much more upside is there in logistics?

The logistics industry is enjoying rapid growth these days with container freight rates and shipping companies rallying again this year (listen to today’s podcast for more colour on these topics). JD Logistics, a logistics spinoff from the Chinese e-commerce giant JD.com, had its first day of trading today in Hong Kong following its $3.2bn IPO capitalizing on the trend of rising profitability and growth. The company grew revenue 47% y/y in 2020 to $10.6bn and EBITDA to $903mn with the EBITDA margin expanding 3.2%-points and is for now a pure play on Chinese logistics which is expected to continue growing rapidly over the coming years as e-commerce continues to grow in China.

We are planning to launch a logistics theme basket next week and we have previously written about the industry highlighting that it has delivered outperformance against the general equity market for over a decade. It seems there are some intrinsic dynamics in the logistics industry that creates a lot of shareholder value. The L&G E-commerce Logistics ETF is up 128% from the lows last year highlighting the massive inflow of capital into this theme. Given the outlook on global supply chain bottlenecks which are expected to last at least the rest of this year, we have a positive view on logistics companies.

Source: Saxo Group

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.