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

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.

<p>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 Chuxing (DIDI US)</a>  has filed for an IPO to list its shares in the US. According to news media outlets, the company could raise around US$10bn at a rumoured valuation close to US$100bn and according to Bloomberg, the company was reportedly trading at a valuation of about US$95bn in the secondary market in the recent months.</p>

The Chinese mobility technology platform DiDi Chuxing (DIDI US)  has filed for an IPO to list its shares in the US. According to news media outlets, the company could raise around US$10bn at a rumoured valuation close to US$100bn and according to Bloomberg, the company was reportedly trading at a valuation of about US$95bn in the secondary market in the recent months.

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

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>In this insight, we discuss in detail our initial thoughts on the valuation range of <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> IPO. Didi was last valued at $65 billion in its latest fundingraising round in August 2020. The media have mentioned that the valuations of Didi Chuxing could be about <a href="https://techcrunch.com/2021/06/10/softbank-uber-tencent-set-to-reap-rewards-from-didi-ipo/?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAMj5A2PgL-33D8uIOLSUl0PGX8TWig2FrftAae5MrH0qB7Jm7ZwviMBR8Ca6R2uOSje6Ep9uNZNsMwEy3FYscaBJf7P9FQXuaOZ5NXJHihyhXCPjXlAjwL5gNJKBVC-zQSM2Z1oGfH5A7b8-JakCHOHtZDR9n3PhDYPB7Lv7s9og" target="_blank" rel="noopener">$70 billion to $100 billion. </a></p><div class="content-highlight">
<p>Our initial valuation analysis of Didi Chuxing suggests a base case market cap valuation of $138 billion. Our valuation ranges from $77 billion (low case) to $215 billion (high case). The IPO price range is not yet available from the bankers but we plan to narrow our valuation once the IPO price range becomes public. </p>
<p>Although we do not know how the bankers will price the deal, if the IPO is priced at about $100 billion, our base case valuation of $138 billion would be 38% higher and given the solid upside, we would be positive on the IPO. </p>
</div>

In this insight, we discuss in detail our initial thoughts on the valuation range of DiDi Chuxing (DIDI US) IPO. Didi was last valued at $65 billion in its latest fundingraising round in August 2020. The media have mentioned that the valuations of Didi Chuxing could be about $70 billion to $100 billion. 
Our initial valuation analysis of Didi Chuxing suggests a base case market cap valuation of $138 billion. Our valuation ranges from $77 billion (low case) to $215 billion (high case). The IPO price range is not yet available from the bankers but we plan to narrow our valuation once the IPO price range becomes public. 
Although we do not know how the bankers will price the deal, if the IPO is priced at about $100 billion, our base case valuation of $138 billion would be 38% higher and given the solid upside, we would be positive on the IPO. 


Initial Thoughts on the Didi Chuxing Valuation

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.

<p><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>/Xiaoju Kuaizhi is the world's largest mobility technology platform by annual active users and by average daily transactions for the twelve months ended 31 March 2021, according to CIC. Xiaoju Kuaizhi is best known for its <em>DiDi Chuxing</em> app in China where consumers can access mobility and other essential services. It acquired rival Kuaidi Dache in February 2015 for $2.2 billion and then acquired the China operations of Uber Technologies for $7.0 billion in August 2016.  </p><p>Didi is seeking to raise as much as $10 billion through a US listing, according to press reports. Didi is backed by Softbank Vision Fund (21.5% stake), <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> (12.8%), <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (6.8%), <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> and <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>. </p><p>Ride-hailing platforms depend heavily on customers in high-density populated cities. China which has 14 metropolitan areas with a population of over 10 million offers the ideal conditions for ride-hailing platforms to flourish. Didi’s core china mobility business is heading on the right trajectory with rising growth and improving margin. </p><div class="content-highlight"><p>However, Didi is saddled with two other businesses (international and other initiatives) which are driven by its global ambitions and its desire to provide a broad array of service offerings to consumers and drivers. This ecosystem strategy is sensible for a business that is trying to make it costlier for customers to switch to rival platforms by leveraging a core business that is highly profitable and cash generative. Unfortunately, Didi’s core business is not close to achieving this status and the international and other initiatives business look like unnecessary and costly distractions. In combination with the ongoing regulatory overhang and less than ideal financial disclosure, we are inclined to give the Didi IPO a pass.</p></div><p><em><strong>For readers interested in Didi's peers which are also seeking IPOs/SPAC deals, we highlight our research notes:</strong></em> </p><p><a href="https://www.smartkarma.com/insights/grab-spac-deal-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:50305" rel="noopener">Grab SPAC Deal: Delivering the Goods</a> </p><p><a href="https://www.smartkarma.com/insights/grab-spac-deal-a-sensible-super-app-valuation" target="_blank" data-smartkarma-citation="insights:50344" rel="noopener">Grab SPAC Deal: A Sensible Super-App Valuation?</a> </p><p><a href="https://www.smartkarma.com/insights/hello-ipo-initiation-goodbye" target="_blank" data-smartkarma-citation="insights:50795" rel="noopener">Hello IPO Initiation: Goodbye</a> </p><p><a href="https://www.smartkarma.com/insights/hello-ipo-1q21-update-does-not-change-the-avoid-tag" target="_blank" data-smartkarma-citation="insights:51119" rel="noopener">Hello IPO: 1Q21 Update Does Not Change the Avoid Tag</a> </p><p><a href="https://www.smartkarma.com/insights/dida-ipo-initiation-sharing-a-lift" target="_blank" data-smartkarma-citation="insights:47652" rel="noopener">Dida IPO Initiation: Sharing a Lift</a> </p>

DiDi Chuxing (DIDI US)/Xiaoju Kuaizhi is the world's largest mobility technology platform by annual active users and by average daily transactions for the twelve months ended 31 March 2021, according to CIC. Xiaoju Kuaizhi is best known for its DiDi Chuxing app in China where consumers can access mobility and other essential services. It acquired rival Kuaidi Dache in February 2015 for $2.2 billion and then acquired the China operations of Uber Technologies for $7.0 billion in August 2016.  Didi is seeking to raise as much as $10 billion through a US listing, according to press reports. Didi is backed by Softbank Vision Fund (21.5% stake), Uber (UBER US) (12.8%), Tencent (700 HK) (6.8%), Alibaba Group (BABA US) and Toyota Motor (7203 JP). Ride-hailing platforms depend heavily on customers in high-density populated cities. China which has 14 metropolitan areas with a population of over 10 million offers the ideal conditions for ride-hailing platforms to flourish. Didi’s core china mobility business is heading on the right trajectory with rising growth and improving margin. However, Didi is saddled with two other businesses (international and other initiatives) which are driven by its global ambitions and its desire to provide a broad array of service offerings to consumers and drivers. This ecosystem strategy is sensible for a business that is trying to make it costlier for customers to switch to rival platforms by leveraging a core business that is highly profitable and cash generative. Unfortunately, Didi’s core business is not close to achieving this status and the international and other initiatives business look like unnecessary and costly distractions. In combination with the ongoing regulatory overhang and less than ideal financial disclosure, we are inclined to give the Didi IPO a pass.For readers interested in Didi's peers which are also seeking IPOs/SPAC deals, we highlight our research notes: Grab SPAC Deal: Delivering the Goods Grab SPAC Deal: A Sensible Super-App Valuation? Hello IPO Initiation: Goodbye Hello IPO: 1Q21 Update Does Not Change the Avoid Tag Dida IPO Initiation: Sharing a Lift 

Didi Chuxing (Xiaoju Kuaizhi) Initiation: In for a Bumpy Ride?

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 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

Didi IPO: A Rough Ride

The Chinese mobility technology platform Didi has filed for an IPO to list its shares in the US. According to news media outlets, Didi could raise...

Shifara Samsudeen, FCMA, CGMA

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

Initial Thoughts on the Didi Chuxing Valuation

Our initial valuation analysis of Didi Chuxing suggests a base case market cap valuation of $138 billion. Our valuation ranges from $77 billion...

Douglas Kim

Didi Chuxing (Xiaoju Kuaizhi) Initiation: In for a Bumpy Ride?

Didi is seeking to raise as much as $10 bn. Due to the costly distractions of the non-core business, regulatory overhang and less than ideal...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)