Initial Thoughts on the Didi Chuxing Valuation

Didi Chuxing and Softbank - Long Awaited IPO of China’s Mobility Giant Worth $70bn

Softbank Group - As Another Investment Moves to IPO, YTD Gains Evaporate

Softbank Group - Shares Drift as Discount Settles in 40% Range

Gravity Works As WeWork Doesn't; Now Plan B

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>We plan to do a deep dive on Didi Chuxing now that the prospectus is out but there are a few points related to Softbank that are worth highlighting in advance. In general, the IPO needs to be wildly successful to provide a meaningful bump in sentiment and anything less is probably factored into Softbank’s share price already. At equity valuations of $70-100bn, the upside for SBG shareholders would be ¥93-291/share. That is positive of course but relatively less than what Uber shareholders could expect (6% Didi exposure v SBG 4%) and also a smaller gain that that offered by the headline listings from Beike, DoorDash and Coupang in the last three periods. The good news is a placement before quarter-end helps the public portfolio which is down $8bn+ QTD.</p>

We plan to do a deep dive on Didi Chuxing now that the prospectus is out but there are a few points related to Softbank that are worth highlighting in advance. In general, the IPO needs to be wildly successful to provide a meaningful bump in sentiment and anything less is probably factored into Softbank’s share price already. At equity valuations of $70-100bn, the upside for SBG shareholders would be ¥93-291/share. That is positive of course but relatively less than what Uber shareholders could expect (6% Didi exposure v SBG 4%) and also a smaller gain that that offered by the headline listings from Beike, DoorDash and Coupang in the last three periods. The good news is a placement before quarter-end helps the public portfolio which is down $8bn+ QTD.

Softbank Group - Initial Thoughts on the Didi Chuxing IPO Filing