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Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost & Sullivan (F&S) report. As of Jun 2020, it offered its carpooling marketplace in 366 cities in China, with approximately 19.2m registered private car owners. Since inception, it has served 36.7m carpooling riders and approximately 60.9m taxi riders.
Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20. The rapid increase in revenue over the past few years, has aided gross profit growth, with gross profit margins expanding from 49.5% in 2017 to 79.5% by 2019. At the same time, Dida has also cut down on its user incentives as well. This enabled Dida to turn a profit in 2019 and remain profitable over 1H20. However, a closer look at the operations shows that Dida only started growing once the market leader, Didi, exited the space.
We’ve covered the background of the company in our previous notes, Dida Pre-IPO - Making hay while big brother retreats and Dida Pre-IPO - Peer comparison - Lagging in scale, leading in profitability. In this note, we will talk about forecasts and valuation.
Dida Pre-IPO
Dida, a technology driven mobility platform in China, aims to raise around US$400m in its Hong Kong IPO. The company is backed by JD.com, Hillhouse, Ctrip, Bitauto and a host of other investors.Dida claims to operate the largest carpooling marketplace in China with a market share of 66.5% in terms of the number of carpooling rides in 2019, as per Frost & Sullivan (F&S) report. As of Jun 2020, it offered its carpooling marketplace in 366 cities in China, with approximately 19.2m registered private car owners. Since inception, it has served 36.7m carpooling riders and approximately 60.9m taxi riders.
Over 2017-19, Dida’s total revenue increased by 11.87x. Revenue was up another 66% over 6M20. Revenue coming from carpooling has grown 19x over 2017 to 2019 and was up another 66% over 6M20. The rapid increase in revenue over the past few years, has aided gross profit growth, with gross profit margins expanding from 49.5% in 2017 to 79.5% by 2019. At the same time, Dida has also cut down on its user incentives as well. This enabled Dida to turn a profit in 2019 and remain profitable over 1H20. However, a closer look at the operations shows that Dida only started growing once the market leader, Didi, exited the space.
We’ve covered the background of the company in our previous notes, Dida Pre-IPO - Making hay while big brother retreats and Dida Pre-IPO - Peer comparison - Lagging in scale, leading in profitability. In this note, we will talk about forecasts and valuation.
Underlying
Dida Inc
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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