IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a> is the world's largest mobility technology platform by annual active users and by average daily transactions for the twelve months ended 31 March 2021, according to CIC. DiDi has endured a torrid time since its listing on 30 June to raise net proceeds of $4,331.6 million at $14.00 per ADS. The shares are trading 40% below its IPO price as days after its listing, DiDi’s apps were taken down from app stores in China by the Cyberspace Administration of China (CAC). DiDi ran afoul of CAC when it pressed ahead with its listing, despite CAC asking it to put the listing on hold while it conducted a cybersecurity review of its collection and use of personal information. Subsequently, the official Xinhua news agency on 10 October claimed that the CAC probe was aimed at “effectively preventing potential national security risks relating to procurement, data processing and overseas listings.”DIDi has been ensnared by regulatory probes into its pricing mechanisms and the way it treats its drivers. DiDi also been subject to rumours in the press that the Chinese government is weighing asserting state control by taking a stake in the company. Press reports have also suggested that DiDi is planning to delist from the US which was later confirmed by DiDi to be false.Since the regulatory clampdown, DiDi has not released its 2Q21 results or provided any financial guidance. However, due to the regulatory restrictions, DiDi is losing market share and pricing power to competitors in China. On 6 September, Cao Cao Mobility, a peer, raised RMB3.8 billion ($588 million) from Chinese state-owned funds to accelerate its expansion. DiDi’s average daily user count declined 30% to 10.9 million in August from 15.6 million in June, according to <a href="https://www.smartkarma.com/entities/aurora-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27264:1" rel="noopener">Aurora Mobile Ltd (JG US)</a>.DiDi continues to polarise opinions with some investors suggesting that the stock can double from current levels while others are wary due to unpredictable regulatory risks. Due to the number of unknowns, we examine DiDi's outlook through scenarios analysis. A key difference between the bull and bear case is the timing for the reinstatement of DiDi’s apps on the app stores which will once again enable DiDi to grow market share and regain pricing power. <div class="content-highlight">Our bull-case SoTP valuation points to a 22% upside while our bear-case SoTP valuation points to a -19% downside to the last close price of $8.56 per ADS. Consequently, the shares seem fairly valued and may appeal to investors with a higher risk appetite.  </div>

DiDi Global (DIDI US) is the world's largest mobility technology platform by annual active users and by average daily transactions for the twelve months ended 31 March 2021, according to CIC. DiDi has endured a torrid time since its listing on 30 June to raise net proceeds of $4,331.6 million at $14.00 per ADS. The shares are trading 40% below its IPO price as days after its listing, DiDi’s apps were taken down from app stores in China by the Cyberspace Administration of China (CAC). DiDi ran afoul of CAC when it pressed ahead with its listing, despite CAC asking it to put the listing on hold while it conducted a cybersecurity review of its collection and use of personal information. Subsequently, the official Xinhua news agency on 10 October claimed that the CAC probe was aimed at “effectively preventing potential national security risks relating to procurement, data processing and overseas listings.”DIDi has been ensnared by regulatory probes into its pricing mechanisms and the way it treats its drivers. DiDi also been subject to rumours in the press that the Chinese government is weighing asserting state control by taking a stake in the company. Press reports have also suggested that DiDi is planning to delist from the US which was later confirmed by DiDi to be false.Since the regulatory clampdown, DiDi has not released its 2Q21 results or provided any financial guidance. However, due to the regulatory restrictions, DiDi is losing market share and pricing power to competitors in China. On 6 September, Cao Cao Mobility, a peer, raised RMB3.8 billion ($588 million) from Chinese state-owned funds to accelerate its expansion. DiDi’s average daily user count declined 30% to 10.9 million in August from 15.6 million in June, according to Aurora Mobile Ltd (JG US).DiDi continues to polarise opinions with some investors suggesting that the stock can double from current levels while others are wary due to unpredictable regulatory risks. Due to the number of unknowns, we examine DiDi's outlook through scenarios analysis. A key difference between the bull and bear case is the timing for the reinstatement of DiDi’s apps on the app stores which will once again enable DiDi to grow market share and regain pricing power. Our bull-case SoTP valuation points to a 22% upside while our bear-case SoTP valuation points to a -19% downside to the last close price of $8.56 per ADS. Consequently, the shares seem fairly valued and may appeal to investors with a higher risk appetite.  

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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 Capital Markets

Indian hospitality start-up, <a href="https://www.smartkarma.com/entities/oyo-pvt-ltd" target="_blank" data-smartkarma-citation="entities:28861:1" rel="noopener">Oyo (1698548D IN)</a> is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like <a href="https://www.smartkarma.com/entities/the-we-company" target="_blank" data-smartkarma-citation="entities:28061:1" rel="noopener">The We Company (WeWork) (WE US)</a> and <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a>. Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

Indian hospitality start-up, Oyo (1698548D IN) is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like The We Company (WeWork) (WE US) and Uber (UBER US). Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Uber Technologies  / Equity Capital Markets

<ul><li>This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery.</li><li>The Covid-19 pandemic adversely affected Uber’s ridesharing business but gave a much-needed boost to its food delivery segment.</li><li>Overall, we believe that despite the volatility and the steep valuation, Uber is a compelling investment today and we give it a ‘Buy’ rating.</li></ul>

This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery.The Covid-19 pandemic adversely affected Uber’s ridesharing business but gave a much-needed boost to its food delivery segment.Overall, we believe that despite the volatility and the steep valuation, Uber is a compelling investment today and we give it a ‘Buy’ rating.

Uber Technologies Inc. - Investment Thesis

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and DoorDash.<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and DoorDash.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

TMT Weekly: 3 Things that Stood Out the Week of September 24, 2021

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Japan-based food delivery company <a href="https://www.smartkarma.com/entities/demae-can-co-ltd" target="_blank" data-smartkarma-citation="entities:10524:1" rel="noopener">Demae-Can Co., Ltd. (2484 JP)</a> launched a follow-on equity offering after market-close today to raise capital for business expansion. In this offering the company will be issuing 55,436,400 new shares and selling 3,240,000 treasury shares out of which a total of 19,293,900 shares will be allocated to the public and 39,382,500 shares will be allocated for <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> and South-Korea based <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>. Based on today's closing price, the total size of this equity offering could be around ~¥105bn (US$950mn) and the portion allocated to public shareholders could be around ~¥35bn (US$315mn). However, the official announcement estimates the minimum size of the equity offering to be around ~¥80bn (US$726mn) and the above-mentioned allocation can change slightly depending on share price movement and public investor interest. There is a really interesting event angle here which should pique the interest of investors. More below.

Japan-based food delivery company Demae-Can Co., Ltd. (2484 JP) launched a follow-on equity offering after market-close today to raise capital for business expansion. In this offering the company will be issuing 55,436,400 new shares and selling 3,240,000 treasury shares out of which a total of 19,293,900 shares will be allocated to the public and 39,382,500 shares will be allocated for Z Holdings (4689 JP) and South-Korea based Naver Corp (035420 KS). Based on today's closing price, the total size of this equity offering could be around ~¥105bn (US$950mn) and the portion allocated to public shareholders could be around ~¥35bn (US$315mn). However, the official announcement estimates the minimum size of the equity offering to be around ~¥80bn (US$726mn) and the above-mentioned allocation can change slightly depending on share price movement and public investor interest. There is a really interesting event angle here which should pique the interest of investors. More below.

Demae-Can's Latest Offering Preserves The Potential for TOPIX Inclusion

United States

Uber Technologies Inc provides ride hailing services. The Company develops applications for road transportation, navigation, ride sharing, and payment processing solutions. Uber Technologies serves customers worldwide.

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Uber Technologies (UBER US)

DiDi Global: Time to Book a Ride?

Our bull-case SoTP valuation points to a 22% upside while our bear-case SoTP valuation points to a -19% downside. The shares seem fairly valued and...

Arun George

Oyo IPO: Flying Blind

Oyo is a typical Softbank Investment. Its old business model was a complete disaster, and it almost ran the company into the ground. The new...

Oshadhi Kumarasiri

Uber Technologies Inc. - Investment Thesis

This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery. The Covid-19...

Baptista Research

TMT Weekly: 3 Things that Stood Out the Week of September 24, 2021

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and...

Aaron Gabin

Demae-Can's Latest Offering Preserves The Potential for TOPIX Inclusion

Japan-based food delivery company Demae-Can announced a large equity offering to boost their marketing expenditure and defend their market share in...

Janaghan Jeyakumar, CFA

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