Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul class="">
<li>The department of local life was degraded and the head of the department was removed.</li>
<li>A new business unit, location-based service, was set up to lead the department of local life.</li>
<li>The new head of location-based service successfully improve the digital media businesses three years ago.</li>
</ul>


The department of local life was degraded and the head of the department was removed.
A new business unit, location-based service, was set up to lead the department of local life.
The new head of location-based service successfully improve the digital media businesses three years ago.


Alibaba (BABA): Restructure Again, The Bad Business Cleaner Comes Back

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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


Telco/Internet specialist

Kirk Boodry

Redex Research

<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>  shares are down 5% on news that the Cyberspace Admin of China has ordered app stores to pull <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> 's mobile app. The intra-day ~¥365/share decline seems overdone as Didi’s total value to SBG shareholders is c. ¥470 yen but this is Vision Fund's largest single investment and any hopes that it would build on the upside from <a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , <a href="https://www.smartkarma.com/entities/doordash-inc" target="_blank" data-smartkarma-citation="entities:28881:1" rel="noopener">DoorDash Inc (DASH US)</a> and <a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> have been sidelined. Plus, the company's target to list 20+ companies this year seems less impressive if this is the kind of performance that will result.

Softbank Group (9984 JP)  shares are down 5% on news that the Cyberspace Admin of China has ordered app stores to pull DiDi Chuxing (DIDI US) 's mobile app. The intra-day ~¥365/share decline seems overdone as Didi’s total value to SBG shareholders is c. ¥470 yen but this is Vision Fund's largest single investment and any hopes that it would build on the upside from Coupang (CPNG US) , DoorDash Inc (DASH US) and KE Holdings Inc (BEKE US) have been sidelined. Plus, the company's target to list 20+ companies this year seems less impressive if this is the kind of performance that will result. 

Softbank Group and Didi Chuxing - Regulatory Pressure on the Rise

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

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (BABA US)

Alibaba (BABA): Restructure Again, The Bad Business Cleaner Comes Back

The department of local life was degraded and the head of the department was removed. A new business unit, location-based service, was set up to...

Ming Lu

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

Softbank Group and Didi Chuxing - Regulatory Pressure on the Rise

Softbank is down 5% and the holdco discount is over 45% on Didi weakness. We think our forecasts cover regulatory pressure but the VF IPO flywheel...

Kirk Boodry

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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