Alpha-Centric ESG Research

Kyle Rudden

This is a pre-IPO ESG assessment 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>, China's leading ride-hailing platform. DiDi is set to finalise its US$4 billion IPO at an implied valuation of US$65 billion – the largest IPO of a Chinese issuer on a U.S. exchange since Alibaba's (BABA US) US$25 billion IPO in 2014.Impressive, except for one minor nuance. That US$65 billion is less than DiDi's earlier expectations of US$100 million, despite strong interest. Economic factors (e.g., growth rates, profitability) had a lot to do with the lower valuation. Regulatory risk and uncertainty probably factored in as well.Therein lies the quandary of this ESG analysis. Regulatory risk and uncertainty.DiDi is committed to corporate social responsibility, and its ESG performance is strong (though not perfect) in critical areas under its control. DiDi is reducing emissions, improving safety, rooting out corruption, and is lightyears ahead of its peers on gender equality and empowerment of women.DiDi is doing all the right things, where it has some semblance of direct control.But then, there's that quandary. DiDi's ESG achievements are overshadowed by regulatory risks and uncertainty, all beyond DiDi's control. Nearly concerning enough to justify a bearish imperative but the "control" issue – proactive ESG positives, versus passive ESG negatives – ultimately won out.

This is a pre-IPO ESG assessment of DiDi Chuxing (DIDI US), China's leading ride-hailing platform. DiDi is set to finalise its US$4 billion IPO at an implied valuation of US$65 billion – the largest IPO of a Chinese issuer on a U.S. exchange since Alibaba's (BABA US) US$25 billion IPO in 2014.Impressive, except for one minor nuance. That US$65 billion is less than DiDi's earlier expectations of US$100 million, despite strong interest. Economic factors (e.g., growth rates, profitability) had a lot to do with the lower valuation. Regulatory risk and uncertainty probably factored in as well.Therein lies the quandary of this ESG analysis. Regulatory risk and uncertainty.DiDi is committed to corporate social responsibility, and its ESG performance is strong (though not perfect) in critical areas under its control. DiDi is reducing emissions, improving safety, rooting out corruption, and is lightyears ahead of its peers on gender equality and empowerment of women.DiDi is doing all the right things, where it has some semblance of direct control.But then, there's that quandary. DiDi's ESG achievements are overshadowed by regulatory risks and uncertainty, all beyond DiDi's control. Nearly concerning enough to justify a bearish imperative but the "control" issue – proactive ESG positives, versus passive ESG negatives – ultimately won out.

Pre-IPO ESG Analysis: DiDi's Exemplary ESG Achievements Eclipsed By Regulatory Risks and Uncertainty

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

Headline Developments SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit - the first launch with a reused rocket.  The launch of the GPS III SV05 for Space Force (below) will take place using the same Falcon 9 rocket booster that launched GPS III SV04 last November.

Headline Developments SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit - the first launch with a reused rocket.  The launch of the GPS III SV05 for Space Force (below) will take place using the same Falcon 9 rocket booster that launched GPS III SV04 last November.

Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.

Headline Developments It’s a big edition this week, so settle in! Elon Musk’s Boring Company (private) broke ground this week, shooting Tesla (TSLA) passengers through a high-speed tunnel under Las Vegas.  The loop comprises 2.7km of tunnels, built 30 feet under the Las Vegas Convention Center.

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of MS-China in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on XPENG, COSCO SHIP ENGY, MEITUAN, TENCENT, PDD, GCL TECHNOLOGY, Full Truck Alliance, KUNLUN TECH.</li>
</ul>


We analysed the earning revision of component stocks of MS-China in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on XPENG, COSCO SHIP ENGY, MEITUAN, TENCENT, PDD, GCL TECHNOLOGY, Full Truck Alliance, KUNLUN TECH.


MS-China Index Earning Revision (Jun): XPENG, COSCO SHIP ENGY, MEITUAN, TENCENT, PDD, GCL TECHNOLOGY

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The changes to a global index in May will be announced pre-market open Wednesday and will be implemented at the close of trading on 29 May.</li>
<li>The big market moves since the last rebalance result in many changes with the final number dependent on the day picked to compute market cap and free float market cap.</li>
<li>There have been big price moves in stocks over the last few months with the forecast adds continuing to perform well and the forecast deletes beginning to catch a bid.</li>
</ul>


The changes to a global index in May will be announced pre-market open Wednesday and will be implemented at the close of trading on 29 May.
The big market moves since the last rebalance result in many changes with the final number dependent on the day picked to compute market cap and free float market cap.
There have been big price moves in stocks over the last few months with the forecast adds continuing to perform well and the forecast deletes beginning to catch a bid.


Global Index: Potential Changes in May for Asia Pac

China

Full Truck Alliance Co. Ltd. operates as a software company. The Company develops digital freight and logistics platform.

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Full Truck Alliance (YMM US)

Pre-IPO ESG Analysis: DiDi's Exemplary ESG Achievements Eclipsed By Regulatory Risks and Uncertainty

DiDi boasts positive ESG achievements in areas under its control, but there's a big ESG issue beyond its control – regulatory risk. But, proactive...

Kyle Rudden

Weekly Innovation Review (WIRE) #36

Headline Developments: SpaceX (private) is set to launch The Pentagon’s next-generation national security satellite to orbit.

Granite Bay Capital

Weekly Innovation Review (WIRE) #35

Headline Developments It’s a big edition this week, so settle in!Elon Musk’s Boring Company (private) broke ground this week,...

Granite Bay Capital

MS-China Index Earning Revision (Jun): XPENG, COSCO SHIP ENGY, MEITUAN, TENCENT, PDD, GCL TECHNOLOGY

We analyzed MS-China's consensus for Jun 2026 and highlighted changes of EPS in XPENG, COSCO SHIP ENGY, MEITUAN, TENCENT, PDD, GCL TECHNOLOGY, Full...

Ke Yan, CFA, FRM

Global Index: Potential Changes in May for Asia Pac

The index rebalances at the close tomorrow and there will be huge volume in the constituent changes at the close. Since announcement, the adds have...

Brian Freitas

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