DiDi Chuxing Pre-IPO
DiDi Chuxing (Didi), the world’s largest mobility technology platform, aims to raise up to US$10bn in its US listing. Its large backers include Softbank with a 21.5% stake, Uber with 12.8% and Tencent with 6.8% stake.Didi, is the world’s largest mobility technology platform. It is present in over 4,000 cities, counties and towns across 15 countries. As of twelve months ending (LTM) 1Q21, it had 493m annual active users and 15m drivers, who participated in 41m average daily transactions. It generated a gross transaction value of RMB341bn over LTM1Q21
Didi is by far the market leader in China. While growth over the past year was hit by COVID-19 induced lockdowns, nonetheless the company has put in a resilient performance. However, the way it reports revenue is a mess, to put it bluntly. If one adjusts its reported revenue to only factor in its take rate, instead of its entire reported revenue, that would suggest that its targeted valuations would be a stretch. We have covered the background of the deal in our earlier note DiDi Chuxing Pre-IPO - A principal agent problem, rumoured target valuation is a stretch.
In this note, we will undertake a peer comparison and talk about valuations.
SoftBank Group is a holding company. Domestic Telecommunications business provides mobile communication services, mobile devices, broadband services to retail customers, and telecom services to corporate customers in Japan. Sprint business provides mobile communication services and fixed-line telecommunication services in the U.S. Yahoo Japan business operates Internet-based advertising and e-commerce business. Distribution business distributes mobile devices overseas, and sells software and mobile device accessories in Japan. ARM business designs microprocessor intellectual property and related technology. SoftBank Vision Fund & Delta Fund business is engaged in the investment activities.
Uber Technologies provides ride hailing services. The company develops application for road transportation, navigation, ride sharing, and payment processing solutions. The company serves customers in the United States and Canada, Latin America, Europe, Middle East, and Asia Pacific markets, excluding its discontinued China operations.
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.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
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