On June 10, US Eastern Time, Didi officially submitted an IPO application to the US Securities and Exchange Commission (SEC) to be listed on the new york Stock Exchange with the stock code "Didi". People familiar with the matter once told Reuters that Didi's IPO would raise about $654.38+00 billion, seeking a valuation close to $654.38+00 billion.
According to the prospectus, the net losses of Didi in 20 18, 20 19 and 2020 were 654.38+05 billion yuan, 9.7 billion yuan and 654.38+006 billion yuan respectively. Among the three major business segments of Didi, international business (international travel and take-away business) and other businesses (car service, freight, autonomous driving and other businesses) are in a loss state, and only China travel business (China online car rental, taxi, driving and hitchhiking business) is profitable after 20 19.
However, for the only profitable travel business segment, Didi also disclosed three internal risks of the business in the prospectus: First, the pricing model was questioned by the outside world and may be forced to adjust; Second, the compliance of vehicles and drivers is under regulatory pressure. Didi said in the prospectus that both will affect the company's financial situation and operational results. Third, it faces great competition from existing, mature and low-cost substitutes.
Wang Chikun's interpretation of Didi's listing in the United States echoes the above three risks and expounds the same fact: Didi urgently needs to improve its performance, which is not easy to achieve under the existing business model, but compared with the option of "listing after the performance improves", listing and financing first and switching to new business are the most effective channels to improve its performance and profit model.
The goal of switching to new business has been reflected in the prospectus: Didi plans to use about 30% of the funds raised from this listing to improve its technical capabilities including * * * travel, electric vehicles and autonomous driving; About 20% is used to launch new products and expand existing product categories to continuously improve the user experience.
McKinsey, a global management consulting firm, released a report predicting that by 2040, the amount of travel service orders based on autonomous driving will reach about 940 billion US dollars. In the field of autonomous driving, the new round of cross-border car-building project in China has set a new threshold of "65.438+0 billion US dollars"-the gold track burns a lot of money and has a heavy sense of crisis. The story has just begun.
Profit challenge under triple risk
The profit of Didi Travel Plate does not surprise the industry. * * * The business model and profit model of enjoying travel is the high flyers of the Internet. * * * Enjoy high-frequency travel, just need it. The turnover rate is very high, the cost of new products and traffic is very low, and there is no cost pressure of hardware recycling, which is better than most Internet projects. Wang Chikun said.
Regarding the losses of Didi's other two major businesses, economist Song Qinghui said that Didi's international business and other businesses are in the stage of "burning money" expansion, especially the international business is still facing the pressure of foreign epidemics, so it is difficult to quickly dilute the cost and still need external continuous "blood transfusion". In 2020, the profit rate of domestic network car service is only 3. 1%, and the profit is meager. In the short to medium term, it is not easy for Didi to turn losses into profits as a whole.
It should be noted that for the profitable "only child" of China Travel Service, Didi did not conceal the hidden worry of the pricing model that determines the income of this business in the prospectus.
According to the prospectus, in 20 19, the transaction volume of China's cultural tourism business was 8.669 billion, down 1.36% year-on-year, and it was 7.75 billion in 2020, down 10.8% year-on-year. Although the transaction volume has declined for two consecutive years, the overall income level of this business has performed well. In 2020, affected by the epidemic, China's tourism business income was 65.438+033.654 billion yuan, lower than 2009' s 2065.438+04794 billion yuan, but still higher than 2065.438+08.
According to Zhang Xiang, an analyst in the automotive industry, in the travel business, Didi may boost the average income growth of each order in various ways, and then maintain the income level in the case of a decline in transaction volume. "Now the price of each order is gradually approaching or even exceeding the price of taxis, reaching a level of more market-oriented operation." He said.
Some media investigated the opaque rules of picking up cars in the intranet, including the Didi special car platform. Faced with the pressure of public opinion and supervision, Sun Shu, CEO of Didi.com, issued an open letter on May 26th, saying that Didi began to investigate on May 7th, and the proportion of orders taken by more than 30% had dropped to 0.03%.
For Didi, the adjustment of pricing model may adversely affect the company's operation. Didi said in the prospectus, "The company's revenue depends on the pricing model used to calculate the user's fare and driver's income, which has been and will continue to be challenged. In an emergency, it may be restricted, and the company may be forced to change the pricing model of some operating cities, but this may require a lot of management time and company resources, thus further affecting the company's financial situation and operating results. "
At the same time, the qualification issue is also a major risk factor that Didi cannot circumvent. In China, travel platforms need to obtain relevant permits issued by the local government before they can provide online car service in different cities, and vehicles used to provide online car service must meet certain conditions before they can obtain necessary transportation permits.
Didi said frankly in the prospectus, "A large number of vehicles on our platform may not have the necessary transportation permits. If a platform like ours does not have the necessary license or permit, it may be subject to administrative punishment. " Any such punishment may disrupt our business operations and have a significant adverse impact on our business, financial status and operating results. "
Due to the above problems, Didi was interviewed by the traffic control department of Dongguan, Guangdong Province in April this year. The data shows that there are more than 40,000 vehicles in Dongguan, of which 26,000 are compliant vehicles, and about 30,000 of the 40,000 drivers have licenses; Among the nearly 9,000 bicycles received by Hua Xiaozhu, another platform of Didi, the compliance rate was 12%.
In addition, increased competition may also pose a threat to Didi's profitability. Didi said in the prospectus that * * * enjoys fierce competition in the travel industry, and Didi faces great competition from existing, mature and low-cost alternatives. In the future, Didi is expected to face competition from new market entrants.
In the past two years, automobile companies such as Chang 'an, SAIC, FAW and Dongfeng have successively entered the travel market, and travel platforms such as T3 Travel and Enjoy Road Travel have been born, covering low-end and high-end market segments. In addition, the Internet forces Meituan and Gaode have aggregated a large number of second-and third-line carpooling platforms by virtue of their traffic advantages, which not only makes them a pole in the travel market, but also makes many weak platforms more competitive in the face of Didi.
On the one hand, the influx of new players, on the other hand, the market growth slowed down. China Internet Network Information Center's 47th Statistical Report on China's Internet Development shows that after 20 18 years, the growth rate of China's car users and user utilization rate slowed down, and even declined after 2020. From June 5438 to February 2020, the number of automobile users in China was 365 million, which was 6.2 1% lower than that from June 2065438 to February 2008. The utilization rate is 36.9%, which is10/percentage point and 3.2 percentage points lower than that of February 20 18 and March 2020 respectively.
Transfer autopilot and electric car
"Didi achieved rapid development through high subsidies in its early years. In recent two years, with the strengthening of government supervision, the disorderly expansion of the travel market has been restricted. Coupled with the full entry of Geely and SAIC, it is difficult for Didi to rely solely on traffic dividends to maintain performance growth. " Zhang Xiang said that in the face of the stock market, Didi must find new ways of development and lay out new technologies and products.
At present, Didi's "four core strategic sectors" are * * * travel platform, car service network, electric vehicle and autonomous driving. Among them, electric vehicles and autonomous driving are regarded as their future market opportunities by Didi. Didi said in the prospectus that "the increasing popularity of electric vehicles and the commercialization of autonomous driving will promote the growth of mobile travel".
According to the prospectus, Didi has invested a lot of money to develop new products and technologies, including electric vehicles and autonomous driving, and intends to continue to invest in this area. Through the new technology layout represented by autonomous driving and electric vehicle industry chain, Didi hopes to become a technology-driven company from a network car travel company.
It is understood that Didi began to develop autonomous driving solutions on 20 16. In February 2020 and June 6+ 10/0 in 5438, Didi Autopilot Company completed the $525 million Series A financing jointly invested by Didi and Softbank Vision, with a valuation of $3.4 billion. After completing the financing, Didi still has an absolute controlling stake in the autonomous driving company, with a shareholding ratio of 70.4%. As of the first quarter of this year, Didi's self-driving team has more than 500 people and has a fleet of more than 65,438+000 self-driving cars.
McKinsey, a global management consulting firm, issued a report predicting that in China, autonomous driving will account for about 13% of the total passenger mileage by 2030, and the number of self-driving passenger cars will reach about13.5 million by 2040; By 2030, the total sales of self-driving cars will reach about 230 billion US dollars; The amount of travel service orders based on autonomous driving will reach about 940 billion US dollars by 2040.
As a solution to future urban traffic, the self-driving track is extremely crowded, including foreign giants such as Waymo, traditional Internet companies such as Baidu, and startups such as Ma Xiao Zhixing and Wenyuan Zhixing. Whether it is the test mileage or the team size, the strength of Didi is not outstanding.
However, Didi also has its own advantage, that is, the ability to collect data. In June 2020, Wei, CTO of Didi Autopilot, revealed that 50% of the online cars on Didi platform are equipped with orange vision recorders, which can collect the real road information of nearly 654.38+000 billion kilometers every year, which will be used for the training of autopilot models.
Around electric vehicles, Didi has already laid out the industrial chain. 20 19,1June, Didi's Xiao Ju Automobile Service and BAIC New Energy jointly invested in the establishment of Jujing New Energy, laying out new energy vehicle operation, network contract car building, charging and replacing electricity and other fields. In June 2020, 1 1, Didi and BYD launched D 1 specially designed for online car rental.
Zhang Xiang said that electric vehicles are a vent, and companies from all walks of life are in cross-border layout. Once the layout of the electric vehicle industry chain is successful, Didi will get a high return on investment. In the case that the online car service is restricted by supervision, it is a feasible way for Didi to rely on its own business resources to lay out the industrial chain of electric vehicles.
In the past two years, Didi's layout of electric vehicles has been concentrated in the middle and lower reaches of the industrial chain, and it has not yet set foot in the most imaginative vehicle manufacturing link. In April this year, some media reported that Didi started the car-making project. The person in charge is Yang Jun, vice president of Didi and general manager of Xiao Ju Special Vehicle. The team has started to dig people from the car factory.
It should be noted that the investment in the industrial chain of autonomous driving and electric vehicles is very large. Referring to Xiaomi, Baidu and other enterprises, the investment in this area is billions or even tens of billions. Didi's autopilot business is still in the stage of "burning money", and the financing of the travel industry in the primary market is becoming more and more difficult. In this context, listing is obviously an unavoidable choice for Didi.
In terms of autonomous driving, in 20 17, Baidu set up 10 billion yuan "Apollo Fund" for autonomous driving. In terms of electric vehicles, Li Bin, the founder of Weilai, once said that it takes at least 20 billion yuan to make a car. In March this year, Xiaomi announced to build a car, with an initial investment of 65.438+0 billion yuan, and an estimated investment of 65.438+0 billion US dollars in the next 65.438+00 years.
So, why did Didi choose to go public in the US instead of going to Hong Kong stocks or A shares? "The rapid development of Internet economy in China has brought excess returns to international investors who invest in China projects, and international capital is optimistic about the development of Internet economy in China as a whole. Didi's main business entities and businesses are mainly in Chinese mainland. If listed in the United States, some international capital optimistic about the mainland market can easily start with stocks and participate in Didi's investment. Didi to US stocks can make full use of international capital and enjoy a better capital premium. " Wang Chikun said.