Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Capital Markets

<p>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. </p><p>This report includes full financial forecasts, valuation, a summary of investment highlights and a list of questions we would ask on the roadshow.</p>

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

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.

Full Truck Alliance   / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a> (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.</p></div><div><p>In our earlier notes, we spoke about the positive and negatives aspects of the deal, <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-positives-category-leader" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Positives - Category Leader</a> and <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-negatives-still-a-mixed-bag" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag,</a> as well as valuations in <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-valuation-even-the-previous-round-might-have-been-a-stretch" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch</a>.</p></div><div><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework. </p></div>

Full Truck Alliance (YMM US) (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.In our earlier notes, we spoke about the positive and negatives aspects of the deal, Full Truck Alliance Pre-IPO - The Positives - Category Leader and Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag, as well as valuations in Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch.In this note, we will talk about the deal dynamics and run the deal through our ECM framework. 

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

<p><a href="https://www.smartkarma.com/entities/cloud-village-inc" target="_blank" data-smartkarma-citation="entities:33412:1" rel="noopener">Cloud Village (CLV HK)</a> (CVI), also known as NetEase Music, plans to raise around US$1bn in its Hong Kong IPO. The company has also obtained investments from <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> and <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>, along with other investors.</p><p>As of Dec 20, it had 181m online music MAUs, 16m online music services monthly paying users, 327,000 social entertainment services monthly paying users. It had over 60m music tracks, of which more than 1m were created by registered independent artists. Its daily active users on average spent 76mins daily listening to music. </p><p>CVI’s revenue has grown 4.3x over FY18-20, to RMB4.9bn. There have been no signs of slowdown as its revenue increased by 102% in FY19 and was up another 111% in FY20. Both online music services and social entertainment services revenue have shown strong growth. Online music services revenue grew by 73% in 2019 and another 47.6% in 2020. Social entertainment services revenue was the largest driver of growth, as it grew by 344% in 2019 and was up another 320% in 2020.</p><p>However, it remains a distant second player in the market and has yet to make a profit.</p>

Cloud Village (CLV HK) (CVI), also known as NetEase Music, plans to raise around US$1bn in its Hong Kong IPO. The company has also obtained investments from Baidu (BIDU US) and Alibaba Group (BABA US), along with other investors.As of Dec 20, it had 181m online music MAUs, 16m online music services monthly paying users, 327,000 social entertainment services monthly paying users. It had over 60m music tracks, of which more than 1m were created by registered independent artists. Its daily active users on average spent 76mins daily listening to music. CVI’s revenue has grown 4.3x over FY18-20, to RMB4.9bn. There have been no signs of slowdown as its revenue increased by 102% in FY19 and was up another 111% in FY20. Both online music services and social entertainment services revenue have shown strong growth. Online music services revenue grew by 73% in 2019 and another 47.6% in 2020. Social entertainment services revenue was the largest driver of growth, as it grew by 344% in 2019 and was up another 320% in 2020.However, it remains a distant second player in the market and has yet to make a profit.

Cloud Village (NetEase Music) Pre-IPO - Was in the Slow Stream, Playing Catch-Up

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Dingdong has the most app active users among all fresh food retailers.</li>
<li>Frontline warehouses are closer to customers, but fresh food have low gross margin.</li>
<li>Competition also came from new retail and O2O retailers.</li>
</ul>


Dingdong has the most app active users among all fresh food retailers.
Frontline warehouses are closer to customers, but fresh food have low gross margin.
Competition also came from new retail and O2O retailers.


Dingdong (叮咚买菜): Fresh Food Competition in and Outside of Frontline Warehouse

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.

<p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> , the pre-owned consumer electronics transaction and services platform in China has announced the indicative price range for its IPO at US$13-15 per ADS. The company plans to issue 16.23m ADSs (18.7m shares including the over-allotment) and each ordinary share represents 1.5 ADSs of the company. At the midpoint of the IPO price range of US$14 per share, Aihuishou will raise net proceeds of US$205.7m at a market capitalisation of US$3.1bn and a post-money enterprise value of US$2.85bn.</p><p>In our previous insight, we examined Aihuishou’s business model and its financials and concluded that the company’s revenues will continue to see strong growth and at the same time, we expect the company’s profitability to improve going forward.</p>

Aihuishou (RERE US) , the pre-owned consumer electronics transaction and services platform in China has announced the indicative price range for its IPO at US$13-15 per ADS. The company plans to issue 16.23m ADSs (18.7m shares including the over-allotment) and each ordinary share represents 1.5 ADSs of the company. At the midpoint of the IPO price range of US$14 per share, Aihuishou will raise net proceeds of US$205.7m at a market capitalisation of US$3.1bn and a post-money enterprise value of US$2.85bn.In our previous insight, we examined Aihuishou’s business model and its financials and concluded that the company’s revenues will continue to see strong growth and at the same time, we expect the company’s profitability to improve going forward.

AiHuiShou IPO: Peer Comparison and Valuation

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com Inc (ADR) (JD US)

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

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

Full Truck Alliance (YMM US), China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing....

Sumeet Singh

Cloud Village (NetEase Music) Pre-IPO - Was in the Slow Stream, Playing Catch-Up

Cloud Village (CLV HK), also known as NetEase Music, plans to raise US$1bn in its Hong Kong IPO. The company has also obtained investments from...

Sumeet Singh

Dingdong (叮咚买菜): Fresh Food Competition in and Outside of Frontline Warehouse

Dingdong has the most app active users among all fresh food retailers. Frontline warehouses are closer to customers, but have low margin....

Ming Lu

AiHuiShou IPO: Peer Comparison and Valuation

We believe there will be limited upside to the company’s indicative IPO price range and would be inclined to buy only if the company sets the final...

Shifara Samsudeen, ACMA, CGMA

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