Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

The Chinese ride hailing giant <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a>  was ordered on Sunday (4th July) by The Cyberspace Administration of China (CAC) to remove its app from app stores for violating users’ personal data two days after it announced an investigation into Didi. According to news media outlets, the order was imposed after Cyberspace Administration has found that Didi had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.Didi responded on Sunday by saying that it would remove its app from app stores and stop registering new users on its platform. The company also has mentioned that it will make changes to its app to comply with the regulations.

The Chinese ride hailing giant DiDi Chuxing (DIDI US)  was ordered on Sunday (4th July) by The Cyberspace Administration of China (CAC) to remove its app from app stores for violating users’ personal data two days after it announced an investigation into Didi. According to news media outlets, the order was imposed after Cyberspace Administration has found that Didi had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.Didi responded on Sunday by saying that it would remove its app from app stores and stop registering new users on its platform. The company also has mentioned that it will make changes to its app to comply with the regulations.

Didi Chuxing: Didi Removes Its App from App Stores Over Privacy Concerns

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.

Event-Driven

<div>
<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a>, the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. It is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, along with other investors.
While the company has been at the receiving end of regulatory oversight before, the announcements over the past few days have come at unusual velocity. In this note, we will talk about the recent updates.
</div><div>We have covered the deal background and financials overview in our previous notes<a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-one-of-asia-s-largest-ipos-this-year-tearsheet" target="_blank" rel="noopener"></a>:</div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-one-of-asia-s-largest-ipos-this-year-tearsheet" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - One of Asia’s Largest IPOs This Year - Tearsheet</a>.</li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-has-a-principal-agent-problem-rumoured-target-valuation-is-a-stretch" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-pre-ipo-competitive-in-car-hailing-uncompetitive-in-others-generally-valuable" target="_blank" rel="noopener">DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In “Others”, Generally Valuable</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-peer-comparison" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Peer Comparison</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-valuation" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-bull-case-index-inclusion-uber-exit" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Bull Case, Index Inclusion, Uber Exit</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-ipo-at-fair-value-with-partial-lock-up-and-index-inclusion-pulling-it-either-way" target="_blank" rel="noopener">DiDi Chuxing IPO - At Fair Value, with Partial Lock-Up and Index Inclusion Pulling It Either Way</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-ipo-trading-upsize-will-ensures-index-inclusion-lock-up-remains-a-wildcard" target="_blank" rel="noopener">DiDi Chuxing IPO Trading - Upsize Will Ensures Index Inclusion, Lock-Up Remains a Wildcard</a></li>
</ul></div>


DiDi Chuxing (DIDI US), the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. It is backed by Softbank Group (9984 JP) and Tencent (700 HK), along with other investors.
While the company has been at the receiving end of regulatory oversight before, the announcements over the past few days have come at unusual velocity. In this note, we will talk about the recent updates.
We have covered the deal background and financials overview in our previous notes:

DiDi Chuxing Pre-IPO - One of Asia’s Largest IPOs This Year - Tearsheet.
DiDi Chuxing Pre-IPO - Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch
DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In “Others”, Generally Valuable
DiDi Chuxing Pre-IPO - Peer Comparison
DiDi Chuxing Pre-IPO - Valuation
DiDi Chuxing Pre-IPO - Bull Case, Index Inclusion, Uber Exit
DiDi Chuxing IPO - At Fair Value, with Partial Lock-Up and Index Inclusion Pulling It Either Way
DiDi Chuxing IPO Trading - Upsize Will Ensures Index Inclusion, Lock-Up Remains a Wildcard


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine. Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In a Hong Kong exchange report released in July 2019, the exchange highlighted that flows from mainland China accounted for 12% of the total trading volume in the market and is ahead of the US investors' 10% and UK investors' 7% share respectively.  We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion. In this insight, we will highlight inflows into <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning Co Ltd (2331 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, as well as outflows from  <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>.

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.  Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In a Hong Kong exchange report released in July 2019, the exchange highlighted that flows from mainland China accounted for 12% of the total trading volume in the market and is ahead of the US investors' 10% and UK investors' 7% share respectively.   We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.   In this insight, we will highlight inflows into Li Ning Co Ltd (2331 HK), Meituan (3690 HK), as well as outflows from  Tencent (700 HK).

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a> - China's largest ride-hailing app/service which is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> launched, then upsized, a mega-IPO to raise US$4.4bn. It was MUCH discussed on Smartkarma pre-IPO. Shares rose 1% on the IPO, rose 16% on Day 2, then fell 5% on Day 3 as the Cyberspace Administration of China <a href="http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm" target="_blank" rel="noopener">announced</a> (<a href="http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm</a>) a cyber security review of the Didi Travel app. Didi said they would cooperate with regulators. But there was a background to this.On 11 June, the Cyberspace Administration of China <a href="http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm" target="_blank" rel="noopener">announced</a> (<a href="http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm</a>) that 129 apps were being investigated for illegal collection and use of personal information. The investigation was noted in the IPO documents and Didi said then that they were working with regulators. Less well noted in public commentary because the list was long and the "work requirement" was all the way at the bottom of the page was that "the relevant App operator[s] shall complete the rectification within 15 working days from the date of this announcement, and send the rectification report with an official seal to" such-and-such an email address, and "If the rectification is not completed within the time limit, our office will deal with it in accordance with the law."Friday 2 July was the 15th working day. Today, the Cyberspace Administration of China took it one step further, <a href="http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm" target="_blank" rel="noopener">announcing</a> (<a href="http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm</a>) it was instructing all platforms to remove the app from distribution. The stock was down 11% on Friday at one point before closing -5%. Monday is a holiday on the NYSE but a lot of attention will be paid to this news. Didi now has pride of place at the top of the league table for Who Has The Most Mentions On The Front Page of Regulator Websites.That's not necessarily a good thing for the stock. A brief review follows.

DiDi Chuxing (DIDI US) - China's largest ride-hailing app/service which is backed by Softbank Group (9984 JP) and Tencent (700 HK) launched, then upsized, a mega-IPO to raise US$4.4bn. It was MUCH discussed on Smartkarma pre-IPO. Shares rose 1% on the IPO, rose 16% on Day 2, then fell 5% on Day 3 as the Cyberspace Administration of China announced (http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm) a cyber security review of the Didi Travel app. Didi said they would cooperate with regulators. But there was a background to this.On 11 June, the Cyberspace Administration of China announced (http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm) that 129 apps were being investigated for illegal collection and use of personal information. The investigation was noted in the IPO documents and Didi said then that they were working with regulators. Less well noted in public commentary because the list was long and the "work requirement" was all the way at the bottom of the page was that "the relevant App operator[s] shall complete the rectification within 15 working days from the date of this announcement, and send the rectification report with an official seal to" such-and-such an email address, and "If the rectification is not completed within the time limit, our office will deal with it in accordance with the law."Friday 2 July was the 15th working day. Today, the Cyberspace Administration of China took it one step further, announcing (http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm) it was instructing all platforms to remove the app from distribution. The stock was down 11% on Friday at one point before closing -5%. Monday is a holiday on the NYSE but a lot of attention will be paid to this news. Didi now has pride of place at the top of the league table for Who Has The Most Mentions On The Front Page of Regulator Websites.That's not necessarily a good thing for the stock. A brief review follows.

Didi Chuxing - Slammed by Regulators, Again. A Review of the Regulatory Timeline

Equity Capital Markets

Shanghai MicroPort MedBot Group / Equity Capital Markets

MicroPort MedBot (MM), a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a> and is backed by Hillhouse and other  mainly domestic investors.MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).Its flagship products, Toumai Laparoscopic Surgical Robot, DFVision 3D Electronic Laparoscope and Honghu Orthopedic Surgical Robot, have all been admitted to the NMPA’s Green Path. Toumai and Honghu are at or near the registration approval stage, and DFVision has recently received NMPA approval.

MicroPort MedBot (MM), a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of Microport Scientific (853 HK) and is backed by Hillhouse and other  mainly domestic investors.MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).Its flagship products, Toumai Laparoscopic Surgical Robot, DFVision 3D Electronic Laparoscope and Honghu Orthopedic Surgical Robot, have all been admitted to the NMPA’s Green Path. Toumai and Honghu are at or near the registration approval stage, and DFVision has recently received NMPA approval.

MicroPort MedBot Pre-IPO - RoboDoc - Pre-Revenue, Has a Large Competitor but a Large Market as Well

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Didi Chuxing: Didi Removes Its App from App Stores Over Privacy Concerns

The investigation into Didi collecting and using personal information of users could offer further evidence for the ongoing antitrust probe and it...

Shifara Samsudeen, ACMA, CGMA

DiDi Chuxing - Double Regulatory Whammy

DiDi Chuxing (DIDI US), the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. The company has been at the...

Sumeet Singh

Hong Kong Connect Flows: Li Ning Inflows

We will highlight weekly Hong Kong Connect inflows into Li Ning Company Limited (2331 HK), Meituan (3690 HK), and outflows from Tencent Holdings...

Ke Yan, CFA, FRM

Didi Chuxing - Slammed by Regulators, Again. A Review of the Regulatory Timeline

Didi is slammed by regulators. Again. March, then April, then June by the CAC, then June by SAMR, then Friday by CAC, now Sunday. A message is...

Travis Lundy

MicroPort MedBot Pre-IPO - RoboDoc - Pre-Revenue, Has a Large Competitor but a Large Market as Well

MicroPort MedBot (MM), a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of Microport (853 HK) and is...

Sumeet Singh

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