Daily BriefsTMT/Internet

TMT: Ming Yuan Cloud Group, DoorDash Inc and more

In today’s briefing:

  • Hang Seng TECH Index Rebalance: Two Changes as Assets Continue to Grow
  • DoorDash Inc IPO Preview – A Big Winner in the U.S. Prepared Food Delivery Services Market

Hang Seng TECH Index Rebalance: Two Changes as Assets Continue to Grow

By Brian Freitas

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 13 November. The constituent changes will be effective after the close of trading on 4 December.

For the Hang Seng TECH Index, there are 2 inclusions and 2 exclusions.

The inclusions are Ming Yuan Cloud Group (909 HK) and Archosaur Games (9990 HK), while the deletions are HengTen Ltd (136 HK) and Netdragon Websoft (777 HK).

 One way turnover is 7.97% due to the inclusions/ exclusions, capping, and free float changes.

Both inclusions have 0.67 days of ADV to buy, HengTen Ltd (136 HK) has 0.6 days of ADV to sell, while Netdragon Websoft (777 HK) has 1 day of ADV to sell.


DoorDash Inc IPO Preview – A Big Winner in the U.S. Prepared Food Delivery Services Market

By Douglas Kim

DoorDash IPO is a big winner and it is likely to generate enormous institutional investors’ interest. Founded in 2012, DoorDash Inc provides on-demand, prepared food delivery service mainly from restaurants. DoorDash has a nearly 50% market share in the U.S. on-demand, prepared food delivery services. DoorDash founders include Stanford students including Tony Xu, Stanley Tang, Andy Fang, and Evan Moore. 

DoorDash has shown tremendous improvement in sales and operating leverage in the past three years. DoorDash has clearly been one of the major beneficiaries of the extended COVID-19 pandemic and various lockdown measures in the US, forcing people to eat at home which resulted in a massive increase in delivery of prepared foods to home.

DoorDash’s sales increased by 204% YoY to $885 million in 2019. Its sales continued to increase very fast by 226% YoY to $1,916 million in 1Q-3Q2020. The company’s operating margins were relatively steady at -72.2% in 2018 and -69.8% in 2019. A most impressive figure was the company’s HUGE improvement in operating margin to -6.8% in 1Q-3Q 2020, down from -81.6% in 1Q-3Q 2019.

As of June 2020, DoorDash was last valued at $16 billion. Since its establishment, DoorDash has raised more than $700 million. Major investors in DoorDash include Sequoia Capital, Khosla Ventures, and Softbank.

We are including DoorDash in our model portfolio.


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