Woori BMO Group Comments on Didi Seeking 2021 Hong Kong IPO, Targeting $60 Billion Valuation

TORONTO, October 20, 2020 (Newswire.com) - Woori BMO Group has today commented on Didi Chuxing, the leading ride-hailing firm in China, as it considers Hong Kong for its multibillion-dollar initial public offering (IPO) next year, re-evaluating previous plans to list in New York.

Headquartered in Beijing, Didi is aiming for a company valuation of over $60 billion by the time it launches the IPO which is currently scheduled for the first half of 2021.

"Didi has already begun talks with investment banks who will manage their forthcoming IPO," commented Andrew Williams, Director of Institutional Equity at Woori BMO Group. "At present, the company's shares are trading well below the valuation of $56 billion, which it achieved in 2017. Therefore, in an effort to boost its current valuation, Didi will seek another funding round ahead of the IPO," Williams added.

Founded eight years ago and backed by Alibaba, SoftBank and Tencent, Didi has started generating healthy profit since the second quarter of the year, and a handful of its investors are now eager to cash in.

For years, Didi had targeted an IPO in the U.S. because of the prestige of a New York share offering, the presence of comparable peers like Lyft and Uber and a better liquidity position.

Uber and Didi have long-standing ties following an expensive campaign to penetrate the Chinese market. Uber in 2016 sold its business unit to Didi in exchange for a 17.5% stake in the Chinese company, which in turn would make a $1 billion investment in Uber.

Particularly in Hong Kong, the initial public offering market has heated up. JD.com Inc. and NetEase Inc. have raised billions in the market, while smaller firms like Yeahka Ltd. have seen their shares surge with high demand.

"$28.8 billion worth of IPOs and secondary listings have already been carried out in Hong Kong over this year to date. If Didi completes its IPO, it will further bolster the city's status as one of the globe's leading capital market hubs," commented Christian Harper, Director of EMEA Wealth Management at Woori BMO Group.

According to researchers at Woori BMO Group, underwhelming stock performances by Uber and Lyft have also discouraged Didi from exploring a U.S. IPO. Both Uber and Lyft are trading below their IPO price, with Lyft's shares plummeting over two-thirds in price since its share offering.

About Woori BMO Group

Founded in 2007, Woori BMO Group is a full-service wealth management company providing both corporate institutions and private clients a tailored financial advisory service from its retail office in Toronto, Canada.

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Source: Woori BMO Group