Didi'S Listing: A Hundred Billion Dollar Valuation Problem To Be Solved?

Didi may be a good thing.

Recently, the rumor rhythm about Didi's listing has suddenly accelerated. On March 24, it was reported in the media that didi travel preferred to go public in the United States rather than Hong Kong, China, with an expected valuation of $100 billion. According to another source, Didi travel is considering listing in the United States and listing in Hong Kong for a second time.

On March 19, it was reported that didi might complete its listing on the Hong Kong Stock Exchange in the second quarter and the third quarter of this year, with a target valuation of more than $60 billion.

It should be noted that in the latest IPO rumors of Didi, the listing location has been adjusted to the United States, and the valuation has greatly increased from the previous $60 billion to $100 billion, even exceeding the current market value of Uber, the "originator of online car Hailing", at $97.68 billion.

When the figure of $60 billion to $80 billion was just released, there was controversy in the industry whether didi could sustain this valuation. Now in a short period of time, the value of Didi's rumor has jumped to $100 billion, which makes people wonder.

Some people believe that Didi's diversified development since last year is actually aimed at increasing the imagination of valuation. However, it is obvious that diversified development needs investment, and boundary logic such as community group buying is totally different from travel logic, so how didi is competent remains to be considered.

Others in the industry believe that Didi's core business itself has high valuation prospects. "In terms of the general direction, diversification is just an ornament at present," Zhang Yi, CEO of AI media consulting, told 21st century economic report, "I think the more valuable place of didi than Uber lies in the fact that Didi's main battlefield is in China, which has enough market space. This large enough market space itself also provides unlimited imagination space for Didi's future performance and growth."

However, some investment bank executives told the 21st century economic reporter that the relevant valuation needs to be judged according to the specific financial data, "didi can make a more specific interpretation after the subsequent disclosure of the IPO materials."

A hundred billion dollar valuation?

In the past year, Didi has been listed frequently.

In July and October 2020, there have been two IPO speculation about didi travel. According to different media reports, Didi travel will consider listing in Hong Kong as early as the first half of 2021, and its IPO valuation will exceed $60 billion.

In January this year, there was news again that didi planned to go public in 2021, or choose Hong Kong as the listing location. The target valuation is about $60 billion to $80 billion, and is in contact with investment banks including Goldman Sachs and JPMorgan Chase.

But now, the latest news of Didi's listing is adjusted to go to the U.S., with a valuation of $100 billion.

"Is $100 billion a little high? All caught up with Baidu, which just went public for the second time. " Several investors to the 21st century economic reporter doubt, "not to mention the current market downturn, 100 billion dollars feel difficult to achieve."

To be sure, from Didi's point of view, the higher the valuation, the better. Didi, founded in 2012, is now in its ninth year. According to the 21st century economic report, Didi has completed 21 times of financing since its establishment, and the announced financing amount has exceeded 20 billion US dollars. Investors are all real gold and silver, there is a natural demand for exit.

In fact, as early as Didi's recent listing news, there have been didi investors' equity transfer action. In July 2020, the project named "equity of the world's leading online car Hailing travel platform company" on Alibaba's auction website will be auctioned with a starting price of 92 million yuan, and the shares to be auctioned are A-X preferred shares. Although the auction project was withdrawn later, it also reflected the withdrawal psychology of some investors.

However, what kind of valuation is reasonable remains to be discussed. Judging from historical information, Didi's valuation in 2019 should stay between $40 billion and $55 billion.

In July 2019, 137500 shares of didi travel were publicly listed and transferred on the Shanghai United Property Exchange. The company's overall valuation was US $55 billion (about 389.235 billion yuan). The transfer price of the equity was based on the overall valuation of US $47.544 billion (about 336.469 billion yuan).

In October 2019, according to media reports, some of Didi's shareholders began to seek to realize their shares. Among them, two original didi shareholders from China and the United States proposed to sell their shares and bid at the valuation of $40 billion and $43 billion respectively.

"We think it is still a challenge for didi to reach such a valuation, and it is difficult for didi to surpass Uber in market value." An investor told the 21st century economic news reporter that, like Uber, Didi is still in a loss state on the whole. In the past two years, Didi has also appeared the situation that early venture investors are eager to sell Didi's equity. At the same time, under the current competitive situation, there may be variables in the market, and didi may also face certain policy risks, so its high valuation Implementation can be quite challenging.

However, in Zhang Yi's opinion, if didi can grasp the travel demand of "clothing, food, housing and transportation", and through the establishment of a nationwide network, it can bring into play the unique value that traditional urban transportation is difficult to meet the individual needs of users, then it may realize a leap in valuation.

"I don't think didi is worse than Uber. Although its internationalization is not as high as that of Uber, I personally think that didi is better than Uber in terms of overall service, so I think didi has its own strength and opportunities." Zhang Yi pointed out.

Didi's story

From the various actions of didi in the past year, it is obvious that didi is also paving the way for listing.

As early as 2018, the news that didi was going to be listed began to spread. At that time, some investment banks gave a valuation of up to $220 billion. However, in the same year, a series of vicious incidents occurred on didi platform, causing public criticism. The listing has run aground.

In 2019, after getting ready for the winter, Didi released more than 40 safety measures and even released a "didi safety standard for car Hailing" with 96 clauses and 19 safety systems, which is also the first safety standard in the industry.

After a year of safety rectification, Didi will start to re develop in 2020. In April of that year, Didi held the internal 2020 annual strategy meeting. At the company's strategy meeting, Didi travel CEO Cheng Wei announced the strategic goal of the next three years - "0188": safety is the cornerstone of Didi's development, without safety, everything will go to zero; within three years, the global daily service will reach 100 million; the domestic travel penetration rate will be 8%; the global service user Mau will exceed 800 million.

Almost at the same time, Didi travel president Liu Qing began to signal to the outside world: core business has been profitable. The so-called core business mainly refers to online car Hailing.

In addition, in order to meet the three-year target of service list and user volume, Didi began to vigorously carry out diversified development to increase user stickiness. Today, in addition to online car hailing, Didi has developed businesses including bicycles, errands, freight transport, community group buying, etc., and the traditional online car Hailing business has also derived businesses with segmented demands such as green vegetable carpooling and huaxiaozhu.

However, there are also many controversies among these emerging businesses. "Community group buying does not mean that as long as investment can be made, it involves complex commodities and even fresh supply chain, which requires enterprises to have higher control ability." Previously, in an interview with the 21st century economic reporter, an enterprise strategic personage who focused on community group buying said frankly, "at present, Didi is doing this more for valuation, and it will be verified by time in the future."

Of course, some investors believe that Didi, as a travel service provider, uses travel data to carry out peripheral business. With the continuous expansion of its scale, the value of the expanded didi will also rise, which is worthy of long-term prospect However, this person also thinks that the premise of expansion is that the main business can obtain profits or even higher profits under the continuous competition, "otherwise, the surrounding business is difficult to do well."

Zhang Yi also believes that although the strategic goal of "0188" puts forward the layout for the diversification of Didi, at least before and after listing, the main value of didi is still around the travel itself, and the cognition and demands of investors for didi are also concentrated here.

"The layout of other products has more stories to tell for Didi's platform system, which supports greater value and serves users well. However, Didi makes performance and profit in its own industry, makes better financial data, and then makes horizontal layout diversification, so that the corresponding story will be more sexy." Zhang Yi pointed out.