Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>First, we offer a recent history of Didi going back to its June 2021 IPO </li>
<li>Next, we review the company's annual results from 2020-23 plus Q124</li>
<li>Finally, we try to answer the question, "Does Didi need to raise cash soon?"</li>
</ul>


First, we offer a recent history of Didi going back to its June 2021 IPO 
Next, we review the company's annual results from 2020-23 plus Q124
Finally, we try to answer the question, "Does Didi need to raise cash soon?"


Remember DiDi Global? We Check in on China's Dominant Rideshare Company and Review Recent Results

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

<ul>
<li>Multiple new agencies have been reporting that <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> plans to trim its investment portfolio over the remainder of the year. </li>
<li>The reports have been coming in since the second half of the year and the company has been duly denying these rumors.</li>
<li>In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.</li>
</ul>


Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.


Tencent Investee Selldown - The US$120bn Global Overhang

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.  

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Lalatech Holdings Co Ltd / Equity Capital Markets

<ul>
<li>Based on returns and margins, US-listed Full Truck Alliance is best comp</li>
<li>Lalatech probably deserves premium valuation multiples vs Full Truck Alliance </li>
<li>An equity valuation of US$11bn+ justifiable; will investors look at recent flops?</li>
</ul>


Based on returns and margins, US-listed Full Truck Alliance is best comp
Lalatech probably deserves premium valuation multiples vs Full Truck Alliance 
An equity valuation of US$11bn+ justifiable; will investors look at recent flops?


Lalatech IPO: Using YMM:US as Main Comp, Equity Valuation of US$11-12 Bn (Or More) Justifiable

China

DiDi Chuxing Incorporated operates passenger transportation platforms. The Company provides mobility solutions, cloud computing and other application based services. DiDi Chuxing serves customers worldwide.

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DiDi Global (DIDI US)

Remember DiDi Global? We Check in on China's Dominant Rideshare Company and Review Recent Results

In this insight we review Didi Global's recent history dating back to its US IPO, analyze financial results from FY20 through Q124, and try to...

Tracking Traffic

Tencent Investee Selldown - The US$120bn Global Overhang

There have been multiple reports that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. We look at Tencent's...

Sumeet Singh

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

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

Lalatech IPO: Using YMM:US as Main Comp, Equity Valuation of US$11-12 Bn (Or More) Justifiable

What are the best comps for Lalatech, which valuation multiples should we focus on, and does the company deserve a premium valuation relative to...

Tracking Traffic

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