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.

Equity Bottom-Up

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 Global (DIDI US)</a> has had a tough time since its IPO in the US on the 30th of June. Two days after Didi’s IPO debut in the US, The Cyberspace Administration of China (CAC) announced on 2nd July that it had launched an investigation into Didi to protect national security and the public interest. On 4th July, CAC announced that it had found that Didi’s app had severely violated the country’s data protection laws by illegally collecting and using its users’ personal information and was ordered to remove its app from app stores. According to news media outlets, the Cyberspace Administration has found that the company had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.According to CIC, Didi operates the world’s largest mobility technology platform based on annual active users and by average daily transactions for the twelve months ended March 2021. Didi priced its IPO at US$14 per ADS and the company’s shares are currently trading at around 40% below its IPO price at US$8.62 per ADS.Since its app ban in July 2021, there has been rumours that the Chinese regulators could impose heavy fines on the company, would be asked to delist from the US Exchange and a complete state takeover of the company. On the other hand, Meituan (Meituan Dache) and other small ride-hailing operators have started to play catch up with Didi losing its momentum with the app ban. Meituan re-launched its stand-alone app for ride-hailing on app stores soon after Didi’s app ban while automaker Geely’s ride-hailing unit Cao Cao Mobility has been raising funds to grab market share from the company.Didi has not yet reported its quarterly earnings for the June quarter nor the company has provided any data for its operations, and in this insight, we present an outlook and our thoughts on the company’s current valuation.

The Chinese mobility technology platform DiDi Global (DIDI US) has had a tough time since its IPO in the US on the 30th of June. Two days after Didi’s IPO debut in the US, The Cyberspace Administration of China (CAC) announced on 2nd July that it had launched an investigation into Didi to protect national security and the public interest. On 4th July, CAC announced that it had found that Didi’s app had severely violated the country’s data protection laws by illegally collecting and using its users’ personal information and was ordered to remove its app from app stores. According to news media outlets, the Cyberspace Administration has found that the company had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.According to CIC, Didi operates the world’s largest mobility technology platform based on annual active users and by average daily transactions for the twelve months ended March 2021. Didi priced its IPO at US$14 per ADS and the company’s shares are currently trading at around 40% below its IPO price at US$8.62 per ADS.Since its app ban in July 2021, there has been rumours that the Chinese regulators could impose heavy fines on the company, would be asked to delist from the US Exchange and a complete state takeover of the company. On the other hand, Meituan (Meituan Dache) and other small ride-hailing operators have started to play catch up with Didi losing its momentum with the app ban. Meituan re-launched its stand-alone app for ride-hailing on app stores soon after Didi’s app ban while automaker Geely’s ride-hailing unit Cao Cao Mobility has been raising funds to grab market share from the company.Didi has not yet reported its quarterly earnings for the June quarter nor the company has provided any data for its operations, and in this insight, we present an outlook and our thoughts on the company’s current valuation.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

In this insight, we provide a bullish case for <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>. We argue that there are signs that Xi Jinping is starting to soften the brutal crackdown on China's Internet giants including Didi. At a meeting of Communist Party officials on Monday (18 October), <a href="https://uk.finance.yahoo.com/news/u-listed-chinese-stocks-track-093844642.html" target="_blank" rel="noopener">Xi Jinping</a> stated that “In recent years, the internet, big data, cloud computing, artificial intelligence, blockchain and other technologies have accelerated their innovation and are increasingly integrated into the entire economy and society.” We believe that this statement is a reflection of a softening stance on the Internet giants in China. Xi understands very well that if the government cracks down on China's tech giants too much, this is likely to crush the technological innovation and research. <div class="content-highlight">
Comparable Companies Valuation Analysis - Based on our revised down sales and earnings estimates of the company, our base case valuation of <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 implied market cap of $58 billion or target price of $12 per share. This represents a 39% upside to the current price of $8.62.
Given the recent softening stance towards China's Internet tech giants combined with their improving share prices in October, we believe that there is a solid upside for Didi Global and we have a Positive view on this stock at current levels.
Our base case valuation $58 billion market cap is based on EV/S multiple of 1.3x using our estimated sales of 236 billion RMB in 2022, which is 70% discount to the median EV/S valuation multiples of the four comps.
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In this insight, we provide a bullish case for DiDi Global (DIDI US). We argue that there are signs that Xi Jinping is starting to soften the brutal crackdown on China's Internet giants including Didi. At a meeting of Communist Party officials on Monday (18 October), Xi Jinping stated that “In recent years, the internet, big data, cloud computing, artificial intelligence, blockchain and other technologies have accelerated their innovation and are increasingly integrated into the entire economy and society.” We believe that this statement is a reflection of a softening stance on the Internet giants in China. Xi understands very well that if the government cracks down on China's tech giants too much, this is likely to crush the technological innovation and research. 
Comparable Companies Valuation Analysis - Based on our revised down sales and earnings estimates of the company, our base case valuation of DiDi Global (DIDI US) is implied market cap of $58 billion or target price of $12 per share. This represents a 39% upside to the current price of $8.62.
Given the recent softening stance towards China's Internet tech giants combined with their improving share prices in October, we believe that there is a solid upside for Didi Global and we have a Positive view on this stock at current levels.
Our base case valuation $58 billion market cap is based on EV/S multiple of 1.3x using our estimated sales of 236 billion RMB in 2022, which is 70% discount to the median EV/S valuation multiples of the four comps.


Didi Global: Xi Jinping Softening the Brutal Crackdown on China's Internet Giants?

Oshadhi Kumarasiri

Equity Capital Markets

Indian hospitality start-up, <a href="https://www.smartkarma.com/entities/oyo-pvt-ltd" target="_blank" data-smartkarma-citation="entities:28861:1" rel="noopener">Oyo (1698548D IN)</a> is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like <a href="https://www.smartkarma.com/entities/the-we-company" target="_blank" data-smartkarma-citation="entities:28061:1" rel="noopener">The We Company (WeWork) (WE US)</a> and <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a>. Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

Indian hospitality start-up, Oyo (1698548D IN) is a digital platform connecting over 157,000 storefronts (hotels and homestays) with consumers. The company is trying to ride the Indian IPO wave with a $1.1bn IPO in India.Oyo is 46.6% owned by the Softbank Vision Fund and it is another example of a typical Softbank Investment like The We Company (WeWork) (WE US) and Uber (UBER US). Oyo’s old business model was a complete disaster, and it almost ran the company into the ground. The new business model makes Oyo look more like a marketplace for lodging. Despite changes to the business model, we continue to have concerns as Oyo could be neither growth nor profits business under its new business model.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Uber Technologies  / Equity Capital Markets

<ul><li>This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery.</li><li>The Covid-19 pandemic adversely affected Uber’s ridesharing business but gave a much-needed boost to its food delivery segment.</li><li>Overall, we believe that despite the volatility and the steep valuation, Uber is a compelling investment today and we give it a ‘Buy’ rating.</li></ul>

This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery.The Covid-19 pandemic adversely affected Uber’s ridesharing business but gave a much-needed boost to its food delivery segment.Overall, we believe that despite the volatility and the steep valuation, Uber is a compelling investment today and we give it a ‘Buy’ rating.

Uber Technologies Inc. - Investment Thesis

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and DoorDash.<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and DoorDash.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

TMT Weekly: 3 Things that Stood Out the Week of September 24, 2021

United States

Uber Technologies Inc provides ride hailing services. The Company develops applications for road transportation, navigation, ride sharing, and payment processing solutions. Uber Technologies serves customers worldwide.

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Uber Technologies (UBER US)

DiDi: Buckle Up Your Seat Belts

Didi's Shares are currently trading at around 40% below its IPO price and our revised forecasts suggests that there is further upside of around 16...

Shifara Samsudeen, ACMA, CGMA

Didi Global: Xi Jinping Softening the Brutal Crackdown on China's Internet Giants?

In this insight, we provide a bullish case for DiDi Global. We argue that there are signs that Xi Jinping is starting to soften the brutal...

Douglas Kim

Oyo IPO: Flying Blind

Oyo is a typical Softbank Investment. Its old business model was a complete disaster, and it almost ran the company into the ground. The new...

Oshadhi Kumarasiri

Uber Technologies Inc. - Investment Thesis

This is our first report on Uber Technologies, one of the leading players across the globe in both, ridesharing and delivery. The Covid-19...

Baptista Research

TMT Weekly: 3 Things that Stood Out the Week of September 24, 2021

This week we take a look at IAC’s proposed acquisition of Meredith, Facebook’s weird week, and the insane valuation disconnect between Uber and...

Aaron Gabin

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