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 Capital Markets

<ul class="">
<li>DIDI dominates the car hailing market in China.</li>
<li>DIDI has a second app to defend from the attacks of small companies, but small companies are hard to eliminate.</li>
<li>None of the minor businesses has competitive advantage in their market niches.</li>
<li>On a potential acquirer's angle, the company is at least worth the value of car hailing in China.</li>
</ul>


DIDI dominates the car hailing market in China.
DIDI has a second app to defend from the attacks of small companies, but small companies are hard to eliminate.
None of the minor businesses has competitive advantage in their market niches.
On a potential acquirer's angle, the company is at least worth the value of car hailing in China.


DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In "Others", Generally Valuable

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.

<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>/Xiaoju Kuaizhi 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. Xiaoju Kuaizhi is best known for its DiDi Chuxing app in China where consumers can access mobility and other essential services. Didi is seeking to raise as much as $10 billion through a US listing, according to press reports. Didi is backed by Softbank Vision Fund (21.5% stake), <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> (12.8%), <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (6.8%), <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> and <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>. In <a href="https://www.smartkarma.com/insights/didi-chuxing-xiaoju-kuaizhi-initiation-in-for-a-bumpy-ride" target="_blank" data-smartkarma-citation="insights:53014" rel="noopener">Didi Chuxing (Xiaoju Kuaizhi) Initiation: In for a Bumpy Ride?</a>, we opined that Didi’s core china mobility business is heading on the right trajectory with rising growth and improving margin. However, Didi is saddled with two other businesses (international and other initiatives) which are driven by its global ambitions and its desire to provide a broad array of service offerings to consumers and drivers. This ecosystem strategy is sensible for a company that possesses a highly profitable and cash generative core business. Unfortunately, Didi’s core china mobility business is not close to achieving this status and the international and other initiatives business look like unnecessary and costly distractions. Today, <a href="https://www.reuters.com/business/autos-transportation/exclusive-chinas-ipo-bound-didi-probed-antitrust-violations-sources-2021-06-17/" target="_blank" rel="noopener">Reuters reported</a> that China's market regulator (SAMR) has begun an antitrust probe into Didi. SAMR is examining if Didi used any competitive practices that squeezed out smaller rivals unfairly. The regulator is also examining whether the pricing mechanism used by Didi's china mobility business is sufficiently transparent. Didi declined to comment on "unsubstantiated speculation from unnamed source(s)."<div class="content-highlight">In this note, we examine the key financial metrics of Didi china mobility and international business to the relevant business units of its peers - Uber, <a href="https://www.smartkarma.com/entities/lyft-inc" target="_blank" data-smartkarma-citation="entities:24423:1" rel="noopener">Lyft Inc (LYFT US)</a> and <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a>. Our analysis suggests that Didi offers a trade-off between growth and profitability in comparison to its peers. Overall, in combination with the ongoing regulatory overhang, we are inclined to remain on the sidelines.   </div>

DiDi Chuxing (DIDI US)/Xiaoju Kuaizhi 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. Xiaoju Kuaizhi is best known for its DiDi Chuxing app in China where consumers can access mobility and other essential services. Didi is seeking to raise as much as $10 billion through a US listing, according to press reports. Didi is backed by Softbank Vision Fund (21.5% stake), Uber (UBER US) (12.8%), Tencent (700 HK) (6.8%), Alibaba Group (BABA US) and Toyota Motor (7203 JP). In Didi Chuxing (Xiaoju Kuaizhi) Initiation: In for a Bumpy Ride?, we opined that Didi’s core china mobility business is heading on the right trajectory with rising growth and improving margin. However, Didi is saddled with two other businesses (international and other initiatives) which are driven by its global ambitions and its desire to provide a broad array of service offerings to consumers and drivers. This ecosystem strategy is sensible for a company that possesses a highly profitable and cash generative core business. Unfortunately, Didi’s core china mobility business is not close to achieving this status and the international and other initiatives business look like unnecessary and costly distractions. Today, Reuters reported that China's market regulator (SAMR) has begun an antitrust probe into Didi. SAMR is examining if Didi used any competitive practices that squeezed out smaller rivals unfairly. The regulator is also examining whether the pricing mechanism used by Didi's china mobility business is sufficiently transparent. Didi declined to comment on "unsubstantiated speculation from unnamed source(s)."In this note, we examine the key financial metrics of Didi china mobility and international business to the relevant business units of its peers - Uber, Lyft Inc (LYFT US) and Grab (0967655D SP). Our analysis suggests that Didi offers a trade-off between growth and profitability in comparison to its peers. Overall, in combination with the ongoing regulatory overhang, we are inclined to remain on the sidelines.   

Xiaoju Kuaizhi (Didi Chuxing) IPO: Growth Vs Margin

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

Headline Developments SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit - the first launch with a reused rocket.  The launch of the GPS III SV05 for Space Force (below) will take place using the same Falcon 9 rocket booster that launched GPS III SV04 last November.

Headline Developments SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit - the first launch with a reused rocket.  The launch of the GPS III SV05 for Space Force (below) will take place using the same Falcon 9 rocket booster that launched GPS III SV04 last November.

Telco/Internet specialist

Kirk Boodry

Redex Research

Didi Chuxing is the dominant ride-hailing platform in one of the world’s most compelling markets for shared mobility. It is a global leader in some respects (number of active users, drivers, and transactions) and its IPO could represent the second-largest China IPO in the US trailing only eCommerce giant Alibaba Group. We value Didi Chuxing at $63/share (the ADR exchange has not yet been announced) which implies a pre-IPO equity value for the entire company of $70bn. This report includes full financial forecasts, valuation, a summary of investment highlights and a list of questions we would ask on the roadshow.

Didi Chuxing is the dominant ride-hailing platform in one of the world’s most compelling markets for shared mobility. It is a global leader in some respects (number of active users, drivers, and transactions) and its IPO could represent the second-largest China IPO in the US trailing only eCommerce giant Alibaba Group. We value Didi Chuxing at $63/share (the ADR exchange has not yet been announced) which implies a pre-IPO equity value for the entire company of $70bn. This report includes full financial forecasts, valuation, a summary of investment highlights and a list of questions we would ask on the roadshow.

Didi Chuxing and Softbank - Long Awaited IPO of China’s Mobility Giant Worth $70bn

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.

The Chinese mobility technology platform <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>  has filed for an IPO to list its shares in the US. According to news media outlets, the company could raise around US$10bn at a rumoured valuation close to US$100bn and according to Bloomberg, the company was reportedly trading at a valuation of about US$95bn in the secondary market in the recent months.

The Chinese mobility technology platform DiDi Chuxing (DIDI US)  has filed for an IPO to list its shares in the US. According to news media outlets, the company could raise around US$10bn at a rumoured valuation close to US$100bn and according to Bloomberg, the company was reportedly trading at a valuation of about US$95bn in the secondary market in the recent months.

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)

DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In "Others", Generally Valuable

DIDI dominates the car hailing market and has a second app to defend from small companies. None of the minor business has advantage in their market...

Ming Lu

Xiaoju Kuaizhi (Didi Chuxing) IPO: Growth Vs Margin

We examine the key financial metrics of Didi to the relevant business units of its peers. Overall, in combination with the ongoing regulatory...

Arun George

Weekly Innovation Review (WIRE) #36

Headline Developments: SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit.

Granite Bay Capital

Didi Chuxing and Softbank - Long Awaited IPO of China’s Mobility Giant Worth $70bn

This report includes full financial forecasts/valuation, the investment case top down and bottom-up,, Uber comps and a list of questions we would...

Kirk Boodry

Didi IPO: A Rough Ride

The Chinese mobility technology platform Didi has filed for an IPO to list its shares in the US. According to news media outlets, Didi could raise...

Shifara Samsudeen, ACMA, CGMA

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