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Editor's Note: Below is a flashback on our long Didi (DIDIY) research calls from our China analyst Felix Wang. Click HERE for further in-depth retail research included in China Pro. |
JUNE 9TH, 2022
My #2 survivor pick is DIDI, and it's certainly a controversial one. At its IPO debut only a year ago, DIDI was trading above US$80bn market cap. Today, it trades at US$12bn. Pretty incredible.
Delisting from NYSE is finally here for DIDI (June 12th) but shares will likely trade on the OTC markets afterwards. A Hong Kong re-listing is also definitely on the table.
I share the majority of DIDI's shareholders' view that this delisting is a turning point for DIDI to placate China and SEC regulators over their cybersecurity, anti-monopoly & compliance investigations. US delisting will hurt DIDI's global appeal, but shares have been over-punished.
DIDI is ridiculously cheap right now and could interest deep value & special situation investors. DIDI's troubles contributed to a 50% discount to DIDI's shares vs UBER on a core business comparison.
I also think if investors can get comfortable with DIDI's path to smaller losses without impacting growth within a framework of a China recovery, $3.5-$4 equity value (market cap: US$17bn-20bn) isn't out of the question, which is 40%-60% higher from current prices.
JULY 19TH, 2022
This morning, a WSJ article mentioned that the ride-hailing giant Didi (DIDIY) may receive a fine of more than $1 billion for data security breaches and probably its infamous decision to ignore the CAC's (Cyberspace Administration of China) remark to delay its US IPO.
Once the large fine is announced, DIDIY can resume adding new users to its platform and allow Didi's apps to be restored to domestic app stores. More importantly, DIDI can also make preparations for a HK IPO.
