Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

Uber Technologies  / Equity Capital Markets

In <a href="https://www.smartkarma.com/insights/lyft-wouldn-t-it-be-ironic-if-this-was-an-ipo-to-rent-but-not-own" target="_blank" data-smartkarma-citation="insights:28868">LYFT: Wouldn't It Be Ironic if This Was an IPO to Rent but Not Own?</a> we noted our  scepticism for the business models of ride sharing companies and the assertion that autonomous driving would benefit rather than hurt them. Despite our scepticism about the long-term viability of the names we believed that <a href="https://www.smartkarma.com/entities/24423" target="_blank" data-smartkarma-citation="entities:24423:1">Lyft Inc (LYFT US)</a>'s positioning as the first ride sharing unicorn to list was likely to result in at least temporary success. This proved correct and though we were of the opinion that an exit on the first trading day itself was prudent, the speed which with the stock price has corrected has been slightly surprising. With Lyft now 19% below its IPO price we feel that market conditions are not particularly constructive for <a href="https://www.smartkarma.com/entities/430" target="_blank" data-smartkarma-citation="entities:430:1">Uber Technologies (0084207D US)</a>'s upcoming listing.<a href="https://www.smartkarma.com/profiles/4" target="_blank" data-smartkarma-citation="accounts:4">Sumeet Singh</a> has provided excellent coverage of a lot of Uber's fundamentals, Uber Eats and Uber's position vs. Lyft in a series of insights that we would recommend investors read for further analysis:<ul>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-uber-eats-the-us-703m-guzzler-is-growing-fast-but-it-s-not-moving-up-the-leaderboard" target="_blank" data-smartkarma-citation="insights:29227">Uber Pre-IPO - Uber Eats the US$703m Guzzler Is Growing Fast but It's Not Moving up the Leaderboard</a></li>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-what-lyft-lacks-in-scale-it-makes-up-for-in-growth-the-fight-for-drivers-continues" target="_blank" data-smartkarma-citation="insights:29195">Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues</a></li>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-big-on-ambition-low-on-disclosures" target="_blank" data-smartkarma-citation="insights:29173">Uber Pre-IPO - Big on Ambition, Low on Disclosures</a></li>
</ul>Below we examine the company's financials to analyse what underlying marginal profitability might look like while also noting risks to the Latin American business posed by <a href="https://www.smartkarma.com/entities/27467" target="_blank" data-smartkarma-citation="entities:27467:1">DiDi Chuxing (1284375D CH)</a>'s aggressive expansion in the region.

In LYFT: Wouldn't It Be Ironic if This Was an IPO to Rent but Not Own? we noted our  scepticism for the business models of ride sharing companies and the assertion that autonomous driving would benefit rather than hurt them. Despite our scepticism about the long-term viability of the names we believed that Lyft Inc (LYFT US)'s positioning as the first ride sharing unicorn to list was likely to result in at least temporary success. This proved correct and though we were of the opinion that an exit on the first trading day itself was prudent, the speed which with the stock price has corrected has been slightly surprising. With Lyft now 19% below its IPO price we feel that market conditions are not particularly constructive for Uber Technologies (0084207D US)'s upcoming listing.Sumeet Singh has provided excellent coverage of a lot of Uber's fundamentals, Uber Eats and Uber's position vs. Lyft in a series of insights that we would recommend investors read for further analysis:
Uber Pre-IPO - Uber Eats the US$703m Guzzler Is Growing Fast but It's Not Moving up the Leaderboard
Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues
Uber Pre-IPO - Big on Ambition, Low on Disclosures
Below we examine the company's financials to analyse what underlying marginal profitability might look like while also noting risks to the Latin American business posed by DiDi Chuxing (1284375D CH)'s aggressive expansion in the region.

Uber: Weak Marginal Profits and Didi's Assualt on Latin America

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.

<a href="https://www.smartkarma.com/entities/430" target="_blank" data-smartkarma-citation="entities:430:1">Uber Technologies (0084207D US)</a> aims to raise US$10bn+ in its US IPO at a US$90-100bn valuation, as per media reports.
I've covered some of the details linked to Uber's and <a href="https://www.smartkarma.com/entities/24423" target="_blank" data-smartkarma-citation="entities:24423:1">Lyft Inc (LYFT US)'s</a> IPO in my previous insights:
<ul>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-big-on-ambition-low-on-disclosures" target="_blank">Uber Pre-IPO - Big on Ambition, Low on Disclosures</a></li>
<li><a href="https://www.smartkarma.com/insights/lyft-pre-ipo-drivers-and-shared-rides-hold-the-key-but-the-numbers-are-missing" target="_blank">LYFT Pre-IPO - Drivers and Shared Rides Hold the Key But the Numbers Are Missing</a></li>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-what-lyft-lacks-in-scale-it-makes-up-for-in-growth-the-fight-for-drivers-continues" target="_blank">Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues</a></li>
</ul>
In this insight, I'll comment more on Uber Eats and how and why the take rate has been moving in the wrong direction despite which the company hasn't been moving up the leaderboard.

Uber Technologies (0084207D US) aims to raise US$10bn+ in its US IPO at a US$90-100bn valuation, as per media reports.
I've covered some of the details linked to Uber's and Lyft Inc (LYFT US)'s IPO in my previous insights:

Uber Pre-IPO - Big on Ambition, Low on Disclosures
LYFT Pre-IPO - Drivers and Shared Rides Hold the Key But the Numbers Are Missing
Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues

In this insight, I'll comment more on Uber Eats and how and why the take rate has been moving in the wrong direction despite which the company hasn't been moving up the leaderboard.

Uber Pre-IPO - Uber Eats the US$703m Guzzler Is Growing Fast but It's Not Moving up the Leaderboard

<a href="https://www.smartkarma.com/entities/430" target="_blank" data-smartkarma-citation="entities:430:1">Uber Technologies (0084207D US)</a> aims to raise US$10bn+ in its US IPO at a US$100bn valuation, as per media reports.
I've covered some of the details linked to Uber's and <a href="https://www.smartkarma.com/entities/24423" target="_blank" data-smartkarma-citation="entities:24423:1">Lyft Inc (LYFT US)'s</a> IPO in my previous insights:
<ul>
<li><a href="https://www.smartkarma.com/insights/uber-pre-ipo-big-on-ambition-low-on-disclosures" target="_blank">Uber Pre-IPO - Big on Ambition, Low on Disclosures</a></li>
<li><a href="https://www.smartkarma.com/insights/lyft-pre-ipo-drivers-and-shared-rides-hold-the-key-but-the-numbers-are-missing" target="_blank">LYFT Pre-IPO - Drivers and Shared Rides Hold the Key But the Numbers Are Missing</a></li>
</ul>
In this insight, I'll do a quick comparison of Uber versus Lyft in terms of scale and growth. I'll also comment on how the two firms seem to be still fighting it out for recruiting and retaining drivers.

Uber Technologies (0084207D US) aims to raise US$10bn+ in its US IPO at a US$100bn valuation, as per media reports.
I've covered some of the details linked to Uber's and Lyft Inc (LYFT US)'s IPO in my previous insights:

Uber Pre-IPO - Big on Ambition, Low on Disclosures
LYFT Pre-IPO - Drivers and Shared Rides Hold the Key But the Numbers Are Missing

In this insight, I'll do a quick comparison of Uber versus Lyft in terms of scale and growth. I'll also comment on how the two firms seem to be still fighting it out for recruiting and retaining drivers.

Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues

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.

Event-Driven

<a href="https://www.smartkarma.com/entities/430" target="_blank" data-smartkarma-citation="entities:430:1">Uber Technologies (0084207D US)</a> as kicked off its IPO by posting its S-1 filing last Thursday. <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a>, through the SoftBank Vision Fund, is Uber’s single largest shareholder with a 16.3% stake. SoftBank has invested around $7.7 billion to acquire its current Uber stake at an effective price of $34.49 per share. <div class="content-highlight">SoftBank stands to make 70-130% of its total investment if Uber achieves its rumoured IPO valuation range of $90-120 billion. It is unclear if the gains will be returned to shareholders or recycled for future big bets. Overall, we believe that SoftBank is a big winner in Uber’s IPO from both on an ROI and credibility perspective.</div>

Uber Technologies (0084207D US) as kicked off its IPO by posting its S-1 filing last Thursday. Softbank Group (9984 JP), through the SoftBank Vision Fund, is Uber’s single largest shareholder with a 16.3% stake. SoftBank has invested around $7.7 billion to acquire its current Uber stake at an effective price of $34.49 per share. SoftBank stands to make 70-130% of its total investment if Uber achieves its rumoured IPO valuation range of $90-120 billion. It is unclear if the gains will be returned to shareholders or recycled for future big bets. Overall, we believe that SoftBank is a big winner in Uber’s IPO from both on an ROI and credibility perspective.

SoftBank Group: Uber IPO a Welcome Shot in the Arm

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth</li>
<li>Widespread adoption of Hydrogen considered unlikely</li>
<li>41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand</li>
<li>Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies</li>
<li>Hybrid premium ~ 8% like-for-like over a combustion vehicle </li>
<li>Carpooling/ride-share platforms have hallmarks of being a macro-trend</li>
<li>W. Asian carpool CAGR of 77.6% over past 11 years</li>
<li>Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership
</li>
<li>Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance </li>
<li>Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum</li>
<li>Primary platinum-surplus to grow in time, downward pressure on price</li>
</ul>
Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?


Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth
Widespread adoption of Hydrogen considered unlikely
41% of Platinum &amp; 84% of Palladium reliant on autocatalyst demand
Hybrids in Europe up 107% in three years at 1:7 to diesel counterparts, without subsidies
Hybrid premium ~ 8% like-for-like over a combustion vehicle 
Carpooling/ride-share platforms have hallmarks of being a macro-trend
W. Asian carpool CAGR of 77.6% over past 11 years
Est. by close 2019 &gt;62m people globally will utilise trans. platforms, forgoing car ownership

Adverse impact on vehicle growth, models, drive-trains, R&amp;D, insurance &amp; finance 
Logistics industry diesel transitioning will affect LT PGM demand, in particular platinum
Primary platinum-surplus to grow in time, downward pressure on price

Auto-catalysts make up the majority of platinums (41%) and in particular, palladium (84%) end use demand.  To determine the future demand profile for PGMs, therefore, we examined the types and likelihood of future drivetrains, as well as technologies affecting unit demand.
Hydrogen's key attraction is its potential green credentials, and if it was to ever became a reality, resultant PGM catalyst demand would outstrip all existing suppliers.  To achieve that noble aim, however, gargantuan energy resources would be needed to conduct electrolysis of water, thermodynamically, a very energy intensive process.  Our analysis concludes that hydrogen will remain a boutique industry, confined to economies with abundant hydrocarbon production, with conversion relying on steam reformation.  Overall impact of hydrogen on PGM demand, will be marginal at best.
Presently, EVs have substantial range and recharge hurdles to overcome before they could ever be a primary mode of transport for many; with global demand primarily driven by Chinese directives, not by the Western consumer.  In the short to medium-term, we do not expect EVs to impact PGM demand significantly.  However, we preface that statement by our belief that in the longer-term, the largest adopter of EVs will be within the commercial logistics sector, currently dominated by diesel power plants, which rely on a substantial amount of platinum within its auto-catalysts.  Widespread adoption of EVs and robotic drones and the replacement of traditional diesel drivetrains will only exacerbate current over-supply in platinum, in time, we forecast its price to fall substantially.
Hybrid sales are up 107% in Europe over the past three years without any state subsidies.  It is reasonable to assume that potential demand of PGMs have, and will continue to be, stymied by hybrid advances.  But we expect overall (even modest) growth in car volume sales should maintain current market dynamics, in the short to medium term.
Carpooling and a host of other transactional transport options are now a realistic, flexible and affordable life-style choice, that contradict the necessity of car ownership.  Especially among the inner-city urbanites, with Asia averaging a CAGR of 77.6% over the past decade.  Car manufacturers are already experiencing significant sales headwinds.  On average it has been found that members/fleet ratio (i.e. No. of cars divided by No. of members) range between 61 – 76, a fraction of unit demand when compared with an average Western family of three or four members, often owning two vehicles.  Using decade average regional CAGRs, projecting three years in advance, the potential number of decreased car sales globally could reach 62m by the close of 2019.  To put that into context, Volkswagen and Toyota produce between 10 to 11m  units each pa.  This raises the question of whether recent sluggish global car sales is somehow related to the almost exponential growth in carpooling/ride-share platforms?

PGMs: Facing Technological Obsolescence? (P. 2)

United States

Lyft, Inc. provides online ridesharing services. The Company offers ride booking, payment processing, and car transportation services. Lyft serves customers in the United States.

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Lyft (LYFT US)

Uber: Weak Marginal Profits and Didi's Assualt on Latin America

In LYFT: Wouldn't It Be Ironic if This Was an IPO to Rent but Not Own? we noted our scepticism for the business models of ride sharing companies...

Mio Kato

Uber Pre-IPO - Uber Eats the US$703m Guzzler Is Growing Fast but It's Not Moving up the Leaderboard

Uber Technologies (0084207D US) aims to raise US$10bn+ in its US IPO at a US$90-100bn valuation, as per media reports. I've covered some of the...

Sumeet Singh

Uber Pre-IPO - What Lyft Lacks in Scale It Makes up for in Growth; the Fight for Drivers Continues

Uber Technologies (0084207D US) aims to raise US$10bn+ in its US IPO at a US$100bn valuation, as per media reports. I've covered some of the...

Sumeet Singh

SoftBank Group: Uber IPO a Welcome Shot in the Arm

Uber Technologies (0084207D US) as kicked off its IPO by posting its S-1 filing last Thursday. Softbank Group (9984 JP), through the SoftBank...

Arun George

PGMs: Facing Technological Obsolescence? (P. 2)

Transportation industries Kodak Moment embracing Hybrids, modest near-term EV growth Widespread adoption of Hydrogen considered unlikely 41% of...

Boost Research

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