Let's Chat Didi Again: Risk-Reward Ratio Looks Good
Tools, like apps, that do not have entertainment and leisure functions usually open with a very clear intention of placing an order, so the DAU of the app largely represents the user's intention to place an order that day.
- After Didi was removed from all networks in July 2021 from the perspective of market share of app DAU, T3 and Didia have gained a certain market share, but currently T3 has continuously declined in market share, and Didia has remained stable at around 9%. Didi has declined from 85% to its current 80%.
- According to current data from the Ministry of Transport, the market share of the online ride-hailing orders was about 90% before it was removed, and dropped to between 80% and 81% within about ten months after it was removed, and the market share has now stabilized at this level this year.
The market share of DAU and orders is generally the same in verification: Didi has been removed for a year and a half, and no real competitors have emerged to challenge it. Its market share has stabilized.
Perhaps it has weak profitability, but its natural monopoly barrier is still very obvious. Such a monopoly position also means that after returning to normal operations, subsidies for passengers may still have a certain decrease, and the actual commission rate for domestic online ride-hailing may return to around 8-10%. Correspondingly, the annual operating profit is also conservative at between 10-15 billion after deducting taxes. With a normal valuation of 20 times, the conservative valuation should also be US$30 billion. Didi is currently valued at US$20 billion.
There are currently two core issues with Didi: restoration and secondary listing. If Didi's market value can rise from US$20 billion to US$30 billion in six months, which is the period of its restoration, this return on investment of 50% in six months doesn't seem too bad. Dolphin Analyst has taken Didi out of the observation warehouse and put it into the holding pool with a low configuration for now.
