Equity Analyst, LightStream Research

Aqila Ali

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 Capital Markets

<a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (1284375D CH)</a>’s rival <a href="https://www.smartkarma.com/entities/dida-inc" target="_blank" data-smartkarma-citation="entities:29701:1" rel="noopener">Dida (DIDA HK)</a> has taken the lead to file for an IPO, being the first Asian ride-hailing company to go public. In this note, we have taken a look at the company’s business model and its growth prospects by comparing the company with its rival Didi. Based on our first look, the key points we highlight are:<ul>
<li>85% of Dida’s revenue is from Carpooling where it holds a 66.5% market share which appears to be a defensible share.</li>
<li>Dida became the leading player specialising in Carpooling services when Didi had to suspend its carpooling app due to two murder incidents. Dida claims their app has better safety features.</li>
<li>Though the company is exposed to the growth potential of ride-sharing through the niche of carpooling, we believe the risks from COVID are higher for carpooling because the number of strangers per ride is higher. This is likely to be highly negative in the short-term and our question is, will it really get easier over time?</li>
<li>For ride-hailing services (around 5% of revenue), Dida mainly partners with taxi companies but is still struggling to keep pace with Didi. Thus, we question whether the company can ever benefit from the major segment of the ride-sharing market?</li>
<li>The company claims its asset-light model will help them reach profitability soon and it did generate a positive adjusted NP in 2019, and in 1H FY12/2020. However, given the struggles of most companies in the sector and the use of items below the operating line to generate a NP, we believe some caution is warranted. We are sceptical about this claim and intend to investigate the path to profitability more closely in a follow-up note.</li>
</ul>

DiDi Chuxing (1284375D CH)’s rival Dida (DIDA HK) has taken the lead to file for an IPO, being the first Asian ride-hailing company to go public. In this note, we have taken a look at the company’s business model and its growth prospects by comparing the company with its rival Didi. Based on our first look, the key points we highlight are:
85% of Dida’s revenue is from Carpooling where it holds a 66.5% market share which appears to be a defensible share.
Dida became the leading player specialising in Carpooling services when Didi had to suspend its carpooling app due to two murder incidents. Dida claims their app has better safety features.
Though the company is exposed to the growth potential of ride-sharing through the niche of carpooling, we believe the risks from COVID are higher for carpooling because the number of strangers per ride is higher. This is likely to be highly negative in the short-term and our question is, will it really get easier over time?
For ride-hailing services (around 5% of revenue), Dida mainly partners with taxi companies but is still struggling to keep pace with Didi. Thus, we question whether the company can ever benefit from the major segment of the ride-sharing market?
The company claims its asset-light model will help them reach profitability soon and it did generate a positive adjusted NP in 2019, and in 1H FY12/2020. However, given the struggles of most companies in the sector and the use of items below the operating line to generate a NP, we believe some caution is warranted. We are sceptical about this claim and intend to investigate the path to profitability more closely in a follow-up note.


Dida Pre-IPO: Carpool-Focused, But Is Main Business in Short-Term Risk?

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/dida-inc" target="_blank" data-smartkarma-citation="entities:29701:1" rel="noopener">Dida (DIDA HK)</a> (Dida), a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com, Hillhouse, Ctrip, Bitauto and a host of other investors.Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost &amp; Sullivan (F&amp;S) report. Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20.

Dida (DIDA HK) (Dida), a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com, Hillhouse, Ctrip, Bitauto and a host of other investors.Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost &amp; Sullivan (F&amp;S) report. Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20. 

Dida Pre-IPO - Making Hay While Big Brother Retreats

China

Dida Inc. operates a technology driven mobility platform. The Company provides carpooling marketplace, taxi-hailing, and other services. Dida also offers advertising services. Dida serves customers in China.

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Dida (2559 HK)

Dida Pre-IPO: Carpool-Focused, But Is Main Business in Short-Term Risk?

Didi’s rival Dida takes the lead to file for an IPO, and would be the first Asian ride-hailing company to go public. We compare Dida's business...

Aqila Ali

Dida Pre-IPO - Making Hay While Big Brother Retreats

Dida, a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com,...

Sumeet Singh

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