Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight">
<p>Didi Chuxing (Didi) is getting ready to complete its IPO in the coming weeks. The company claims to be the world's largest mobility technology platform in terms of annual active users and by average daily transactions for the 12 months ended March 2021. </p>
<p>Didi is the number player for shared mobility services in China including ride hailing, taxi hailing, chauffeur, hitch, and other forms of shared mobility. The company operates in 15 countries globally and its platform provides services to over 493 million active annual users and powered 41 million average daily transactions for 12 months ended March 31, 2021.</p>
<p><a href="https://www.ft.com/content/bb80e462-fbb9-49d1-8a87-b3ad511c1d4e" target="_blank" rel="noopener">Didi Chuxing</a> was last valued at $65 billion in a 2018 fund raising round. Major investors in Didi include Softbank which has invested more than $10 billion in this company. Softbank's Vision Funds own a 21.5% stake in Didi Chuxing, followed by <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> with a 12.8% stake, 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> which has a 6.8% stake. </p>
</div><p>The company's long term vision is to capitalize on AI and big data to power shared, electric, smart, and autonomous mobility networks. The company estimates the mobility service market was $6.7 trillion globally in 2020, which is expected to increase to $16.4 trillion in 2040. Shared mobility and electric vehicles penetration rates were 2% and 1%, respectively in 2020. Shared mobility and electric vehicles penetration rates are expected to reach 23.6% and 29.3%, respectively in 2040.</p>


Didi Chuxing (Didi) is getting ready to complete its IPO in the coming weeks. The company claims to be the world's largest mobility technology platform in terms of annual active users and by average daily transactions for the 12 months ended March 2021. 
Didi is the number player for shared mobility services in China including ride hailing, taxi hailing, chauffeur, hitch, and other forms of shared mobility. The company operates in 15 countries globally and its platform provides services to over 493 million active annual users and powered 41 million average daily transactions for 12 months ended March 31, 2021.
Didi Chuxing was last valued at $65 billion in a 2018 fund raising round. Major investors in Didi include Softbank which has invested more than $10 billion in this company. Softbank's Vision Funds own a 21.5% stake in Didi Chuxing, followed by Uber (UBER US) with a 12.8% stake, and Tencent (700 HK) which has a 6.8% stake. 
The company's long term vision is to capitalize on AI and big data to power shared, electric, smart, and autonomous mobility networks. The company estimates the mobility service market was $6.7 trillion globally in 2020, which is expected to increase to $16.4 trillion in 2040. Shared mobility and electric vehicles penetration rates were 2% and 1%, respectively in 2020. Shared mobility and electric vehicles penetration rates are expected to reach 23.6% and 29.3%, respectively in 2040.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <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/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>. Shorts increased in the Consumer Discretionary and Health Care sectors, while decreasing in Financials and Industrials sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-building-fund-inc" target="_blank" data-smartkarma-citation="entities:1900:1" rel="noopener">Nippon Building Fund (8951 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>, <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-prime-realty-investmen" target="_blank" data-smartkarma-citation="entities:495:1" rel="noopener">Japan Prime Realty Investmen (8955 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/inpex-corp" target="_blank" data-smartkarma-citation="entities:20665:1" rel="noopener">Inpex Corp (1605 JP)</a>, <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a>, <a href="https://www.smartkarma.com/entities/showa-denko-k-k" target="_blank" data-smartkarma-citation="entities:1496:1" rel="noopener">Showa Denko K.K. (4004 JP)</a> and <a href="https://www.smartkarma.com/entities/medley-inc" target="_blank" data-smartkarma-citation="entities:31041:1" rel="noopener">Medley (4480 JP)</a>. Shorts increased on Consumer Staples, Real Estate and Communication Services, while reducing on Industrials, Energy and Consumer Discretionary names.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a> and <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a>, <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/nanya-technology-corp" target="_blank" data-smartkarma-citation="entities:3269:1" rel="noopener">Nanya Technology (2408 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a> and <a href="https://www.smartkarma.com/entities/hannstar-display-corp" target="_blank" data-smartkarma-citation="entities:13922:1" rel="noopener">Hannstar Display (6116 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/china-airlines-ltd" target="_blank" data-smartkarma-citation="entities:4591:1" rel="noopener">China Airlines (2610 TT)</a>, <a href="https://www.smartkarma.com/entities/fitipower-integrated-technology-inc" target="_blank" data-smartkarma-citation="entities:8712:1" rel="noopener">Fitipower Integrated Technology (4961 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> and <a href="https://www.smartkarma.com/entities/ase-technology-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:27270:1" rel="noopener">ASE Technology Holding Co Ltd (3711 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Meituan (3690 HK), JD Health (6618 HK), Kuaishou Technology (1024 HK), Smoore International (6969 HK) and Microport Scientific (853 HK) while there was short covering on Ping An Insurance (H) (2318 HK), AIA Group Ltd (1299 HK), Tencent (700 HK), Sunny Optical (2382 HK) and HSBC Holdings (5 HK). Shorts increased in the Consumer Discretionary and Health Care sectors, while decreasing in Financials and Industrials sectors.In Japan, stocks increased on Kirin Holdings (2503 JP), Nippon Building Fund (8951 JP), NTT (Nippon Telegraph &amp; Telephone) (9432 JP), Hulic Co Ltd (3003 JP) and Japan Prime Realty Investmen (8955 JP) while there was short covering on Toshiba Corp (6502 JP), Inpex Corp (1605 JP), Casio Computer (6952 JP), Showa Denko K.K. (4004 JP) and Medley (4480 JP). Shorts increased on Consumer Staples, Real Estate and Communication Services, while reducing on Industrials, Energy and Consumer Discretionary names.In Korea, shorts increased on HMM Co., Ltd. (011200 KS), Doosan Heavy Industries &amp; Construction (034020 KS), LG Display (034220 KS) and Hanwha Solutions (009830 KS) while shorts were covered on Samsung Electronics (005930 KS), Naver Corp (035420 KS), SK Hynix (000660 KS) and LG Chem Ltd (051910 KS).In Taiwan, shorts increased on Asustek Computer (2357 TT), Unimicron Technology (3037 TT), Nanya Technology (2408 TT), Innolux Corp (3481 TT) and Hannstar Display (6116 TT) while shorts covered on Evergreen Marine Corp (2603 TT), China Airlines (2610 TT), Fitipower Integrated Technology (4961 TT), Mediatek Inc (2454 TT) and ASE Technology Holding Co Ltd (3711 TT).

Asia Shorts: Meituan, JDH, Smoore, Ping An, Kirin, NTT, Toshiba, HMM, Doosan, LGD, Hanwha, Evergreen

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.

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<p><a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>, an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.</p>
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<p>We have covered various aspects of the deal in our earlier notes <a href="https://www.smartkarma.com/insights/kanzhun-pre-ipo-bumble-meets-linkedin" target="_blank" rel="noopener">Kanzhun Pre-IPO -Bumble meets Linkedin</a> and <a href="https://www.smartkarma.com/insights/kanzhun-ipo-fast-growth-strong-investor-support-cash-flow-positive" target="_blank" rel="noopener">Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive...</a>.</p>
<p>In this note, we look at deal dynamics and provide an update on valuation.  </p>
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Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK). Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.



We have covered various aspects of the deal in our earlier notes Kanzhun Pre-IPO -Bumble meets Linkedin and Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive....
In this note, we look at deal dynamics and provide an update on valuation.  


Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

<p><a href="https://www.smartkarma.com/entities/dingdong-maicia" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicia (DDL US)</a>, a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global, General Atlantic and Softbank.</p><p>Dingdong Maicai (DM) is an on-demand e-commerce company in China which provides users and households with fresh produce, meat and seafood and other daily necessities via its self-operated frontline fulfillment grid. As of 1Q21, DM had 6.9m monthly transacting users, who had placed 69.7m orders during the quarter. Its FY20 gross merchandise value was RMB13bn, representing a 10%+ market share for the on-demand ecommerce fresh groceries and daily necessities market.</p><p>Its core product category is fresh groceries and it procures most of its products directly and offers to deliver them to customers within 30mins of having received an order.</p>

Dingdong Maicia (DDL US), a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global, General Atlantic and Softbank.Dingdong Maicai (DM) is an on-demand e-commerce company in China which provides users and households with fresh produce, meat and seafood and other daily necessities via its self-operated frontline fulfillment grid. As of 1Q21, DM had 6.9m monthly transacting users, who had placed 69.7m orders during the quarter. Its FY20 gross merchandise value was RMB13bn, representing a 10%+ market share for the on-demand ecommerce fresh groceries and daily necessities market.Its core product category is fresh groceries and it procures most of its products directly and offers to deliver them to customers within 30mins of having received an order.

Dingdong Maicai Pre-IPO - Increasing Market Share, Fast Growth but No Signs of Profit

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/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel). </p><p>AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports. AiHuiShou is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> (34.7% of the outstanding shares), Morningside China (14.0%), Shunwei China Internet Fund IV (7.3%) and Tian Tu Capital (8.5%). </p><p>There are 2,615 million consumer electronic devices in circulation that still have use-value in China in 2020, which 3x times the 869 million devices in circulation in the US, according to CIC. This huge volume of devices in circulation has supported the demand for second-hand or pre-owned devices in China. Currently, the penetration rate of traded pre-owned devices relative to the number of consumer electronic devices in circulation is a low 3.7% in 2020. However, this rate is forecasted to reach 9.4% by 2025, and the market is expected to grow at a 30.8% CAGR from 2020 to 2025 to reach RMB967.3 billion by 2025, according to CIC. </p><div class="content-highlight"><p>AiHuiShou as the largest player as measure by GMV and transacted devices is well-positioned to capture this market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. For investors willing to brave the risk that the current market selloff in high growth stocks persists, we think that the AiHuiShou story warrants a closer look.    </p></div>

Aihuishou (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel). AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports. AiHuiShou is backed by JD.com Inc (ADR) (JD US) (34.7% of the outstanding shares), Morningside China (14.0%), Shunwei China Internet Fund IV (7.3%) and Tian Tu Capital (8.5%). There are 2,615 million consumer electronic devices in circulation that still have use-value in China in 2020, which 3x times the 869 million devices in circulation in the US, according to CIC. This huge volume of devices in circulation has supported the demand for second-hand or pre-owned devices in China. Currently, the penetration rate of traded pre-owned devices relative to the number of consumer electronic devices in circulation is a low 3.7% in 2020. However, this rate is forecasted to reach 9.4% by 2025, and the market is expected to grow at a 30.8% CAGR from 2020 to 2025 to reach RMB967.3 billion by 2025, according to CIC. AiHuiShou as the largest player as measure by GMV and transacted devices is well-positioned to capture this market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. For investors willing to brave the risk that the current market selloff in high growth stocks persists, we think that the AiHuiShou story warrants a closer look.    

AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

Didi Chuxing IPO Preview

Didi Chuxing is the number player for shared mobility services in China. The media have mentioned that the valuations of Didi Chuxing could be...

Douglas Kim

Asia Shorts: Meituan, JDH, Smoore, Ping An, Kirin, NTT, Toshiba, HMM, Doosan, LGD, Hanwha, Evergreen

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK).

Sumeet Singh

AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One

AiHiuShou is seeking to raise $0.5-1.0 bn through an NYSE listing. AiHuiShou is delivering on its market opportunity through strong revenue growth,...

Arun George

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52-week Range

Market Cap (USDm)

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Didi Chuxing IPO Preview

Didi Chuxing is the number player for shared mobility services in China. The media have mentioned that the valuations of Didi Chuxing could be...

Douglas Kim

Asia Shorts: Meituan, JDH, Smoore, Ping An, Kirin, NTT, Toshiba, HMM, Doosan, LGD, Hanwha, Evergreen

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK).

Sumeet Singh

Dingdong Maicai Pre-IPO - Increasing Market Share, Fast Growth but No Signs of Profit

Dingdong Maicia (DDL US), a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global,...

Sumeet Singh

AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One

AiHiuShou is seeking to raise $0.5-1.0 bn through an NYSE listing. AiHuiShou is delivering on its market opportunity through strong revenue growth,...

Arun George