Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, 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 ride hailing giant <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>  was ordered on Sunday (4th July) by The Cyberspace Administration of China (CAC) to remove its app from app stores for violating users’ personal data two days after it announced an investigation into Didi. According to news media outlets, the order was imposed after Cyberspace Administration has found that Didi had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.Didi responded on Sunday by saying that it would remove its app from app stores and stop registering new users on its platform. The company also has mentioned that it will make changes to its app to comply with the regulations.

The Chinese ride hailing giant DiDi Chuxing (DIDI US)  was ordered on Sunday (4th July) by The Cyberspace Administration of China (CAC) to remove its app from app stores for violating users’ personal data two days after it announced an investigation into Didi. According to news media outlets, the order was imposed after Cyberspace Administration has found that Didi had illegally collected personal data of its users and was asked to make changes to comply with the country’s data protection rules.Didi responded on Sunday by saying that it would remove its app from app stores and stop registering new users on its platform. The company also has mentioned that it will make changes to its app to comply with the regulations.

Didi Chuxing: Didi Removes Its App from App Stores Over Privacy Concerns

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.

Event-Driven

<div>
<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>, the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. It is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, along with other investors.
While the company has been at the receiving end of regulatory oversight before, the announcements over the past few days have come at unusual velocity. In this note, we will talk about the recent updates.
</div><div>We have covered the deal background and financials overview in our previous notes<a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-one-of-asia-s-largest-ipos-this-year-tearsheet" target="_blank" rel="noopener"></a>:</div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-one-of-asia-s-largest-ipos-this-year-tearsheet" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - One of Asia’s Largest IPOs This Year - Tearsheet</a>.</li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-has-a-principal-agent-problem-rumoured-target-valuation-is-a-stretch" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-pre-ipo-competitive-in-car-hailing-uncompetitive-in-others-generally-valuable" target="_blank" rel="noopener">DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In “Others”, Generally Valuable</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-peer-comparison" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Peer Comparison</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-valuation" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-pre-ipo-bull-case-index-inclusion-uber-exit" target="_blank" rel="noopener">DiDi Chuxing Pre-IPO - Bull Case, Index Inclusion, Uber Exit</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-ipo-at-fair-value-with-partial-lock-up-and-index-inclusion-pulling-it-either-way" target="_blank" rel="noopener">DiDi Chuxing IPO - At Fair Value, with Partial Lock-Up and Index Inclusion Pulling It Either Way</a></li>
<li><a href="https://www.smartkarma.com/insights/didi-chuxing-ipo-trading-upsize-will-ensures-index-inclusion-lock-up-remains-a-wildcard" target="_blank" rel="noopener">DiDi Chuxing IPO Trading - Upsize Will Ensures Index Inclusion, Lock-Up Remains a Wildcard</a></li>
</ul></div>


DiDi Chuxing (DIDI US), the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. It is backed by Softbank Group (9984 JP) and Tencent (700 HK), along with other investors.
While the company has been at the receiving end of regulatory oversight before, the announcements over the past few days have come at unusual velocity. In this note, we will talk about the recent updates.
We have covered the deal background and financials overview in our previous notes:

DiDi Chuxing Pre-IPO - One of Asia’s Largest IPOs This Year - Tearsheet.
DiDi Chuxing Pre-IPO - Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch
DIDI (滴滴) Pre-IPO: Competitive in Car Hailing, Uncompetitive In “Others”, Generally Valuable
DiDi Chuxing Pre-IPO - Peer Comparison
DiDi Chuxing Pre-IPO - Valuation
DiDi Chuxing Pre-IPO - Bull Case, Index Inclusion, Uber Exit
DiDi Chuxing IPO - At Fair Value, with Partial Lock-Up and Index Inclusion Pulling It Either Way
DiDi Chuxing IPO Trading - Upsize Will Ensures Index Inclusion, Lock-Up Remains a Wildcard


Telco/Internet specialist

Kirk Boodry

Redex Research

<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>  shares are down 5% on news that the Cyberspace Admin of China has ordered app stores to pull <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> 's mobile app. The intra-day ~¥365/share decline seems overdone as Didi’s total value to SBG shareholders is c. ¥470 yen but this is Vision Fund's largest single investment and any hopes that it would build on the upside from <a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , <a href="https://www.smartkarma.com/entities/doordash-inc" target="_blank" data-smartkarma-citation="entities:28881:1" rel="noopener">DoorDash Inc (DASH US)</a> and <a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> have been sidelined. Plus, the company's target to list 20+ companies this year seems less impressive if this is the kind of performance that will result.

Softbank Group (9984 JP)  shares are down 5% on news that the Cyberspace Admin of China has ordered app stores to pull DiDi Chuxing (DIDI US) 's mobile app. The intra-day ~¥365/share decline seems overdone as Didi’s total value to SBG shareholders is c. ¥470 yen but this is Vision Fund's largest single investment and any hopes that it would build on the upside from Coupang (CPNG US) , DoorDash Inc (DASH US) and KE Holdings Inc (BEKE US) have been sidelined. Plus, the company's target to list 20+ companies this year seems less impressive if this is the kind of performance that will result. 

Softbank Group and Didi Chuxing - Regulatory Pressure on the Rise

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<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> - China's largest ride-hailing app/service which is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> launched, then upsized, a mega-IPO to raise US$4.4bn. It was MUCH discussed on Smartkarma pre-IPO. Shares rose 1% on the IPO, rose 16% on Day 2, then fell 5% on Day 3 as the Cyberspace Administration of China <a href="http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm" target="_blank" rel="noopener">announced</a> (<a href="http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm</a>) a cyber security review of the Didi Travel app. Didi said they would cooperate with regulators. But there was a background to this.On 11 June, the Cyberspace Administration of China <a href="http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm" target="_blank" rel="noopener">announced</a> (<a href="http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm</a>) that 129 apps were being investigated for illegal collection and use of personal information. The investigation was noted in the IPO documents and Didi said then that they were working with regulators. Less well noted in public commentary because the list was long and the "work requirement" was all the way at the bottom of the page was that "the relevant App operator[s] shall complete the rectification within 15 working days from the date of this announcement, and send the rectification report with an official seal to" such-and-such an email address, and "If the rectification is not completed within the time limit, our office will deal with it in accordance with the law."Friday 2 July was the 15th working day. Today, the Cyberspace Administration of China took it one step further, <a href="http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm" target="_blank" rel="noopener">announcing</a> (<a href="http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm" target="_blank" rel="noopener">http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm</a>) it was instructing all platforms to remove the app from distribution. The stock was down 11% on Friday at one point before closing -5%. Monday is a holiday on the NYSE but a lot of attention will be paid to this news. Didi now has pride of place at the top of the league table for Who Has The Most Mentions On The Front Page of Regulator Websites.That's not necessarily a good thing for the stock. A brief review follows.

DiDi Chuxing (DIDI US) - China's largest ride-hailing app/service which is backed by Softbank Group (9984 JP) and Tencent (700 HK) launched, then upsized, a mega-IPO to raise US$4.4bn. It was MUCH discussed on Smartkarma pre-IPO. Shares rose 1% on the IPO, rose 16% on Day 2, then fell 5% on Day 3 as the Cyberspace Administration of China announced (http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm) a cyber security review of the Didi Travel app. Didi said they would cooperate with regulators. But there was a background to this.On 11 June, the Cyberspace Administration of China announced (http://www.cac.gov.cn/2021-06/11/c_1624994586637626.htm) that 129 apps were being investigated for illegal collection and use of personal information. The investigation was noted in the IPO documents and Didi said then that they were working with regulators. Less well noted in public commentary because the list was long and the "work requirement" was all the way at the bottom of the page was that "the relevant App operator[s] shall complete the rectification within 15 working days from the date of this announcement, and send the rectification report with an official seal to" such-and-such an email address, and "If the rectification is not completed within the time limit, our office will deal with it in accordance with the law."Friday 2 July was the 15th working day. Today, the Cyberspace Administration of China took it one step further, announcing (http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm) it was instructing all platforms to remove the app from distribution. The stock was down 11% on Friday at one point before closing -5%. Monday is a holiday on the NYSE but a lot of attention will be paid to this news. Didi now has pride of place at the top of the league table for Who Has The Most Mentions On The Front Page of Regulator Websites.That's not necessarily a good thing for the stock. A brief review follows.

Didi Chuxing - Slammed by Regulators, Again. A Review of the Regulatory Timeline

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:<a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>, <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>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:AIA Group Ltd (1299 HK), DiDi Chuxing (DIDI US)

Global Emerging Markets Weekly: 2 July 2021

China

DiDi Chuxing Inc operates passenger transportation platforms. The Company provides mobility solutions, cloud computing, and other application based services. DiDi Chuxing serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

DiDi Global (DIDIY US)

Didi Chuxing: Didi Removes Its App from App Stores Over Privacy Concerns

The investigation into Didi collecting and using personal information of users could offer further evidence for the ongoing antitrust probe and it...

Shifara Samsudeen, FCMA, CGMA

DiDi Chuxing - Double Regulatory Whammy

DiDi Chuxing (DIDI US), the world’s largest mobility technology platform, raised around US$4.4bn in its US listing. The company has been at the...

Sumeet Singh

Softbank Group and Didi Chuxing - Regulatory Pressure on the Rise

Softbank is down 5% and the holdco discount is over 45% on Didi weakness. We think our forecasts cover regulatory pressure but the VF IPO flywheel...

Kirk Boodry

Didi Chuxing - Slammed by Regulators, Again. A Review of the Regulatory Timeline

Didi is slammed by regulators. Again. March, then April, then June by the CAC, then June by SAMR, then Friday by CAC, now Sunday. A message is...

Travis Lundy

Global Emerging Markets Weekly: 2 July 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)