Didi Global reports widening losses as Beijing restrictions bite
The Chinese ride-hailing firm Didi Global has reported widening losses and a decline in third-quarter revenue, after its domestic business took a hit from a regulatory crackdown by Beijing.
The company said operating losses hit $6.3bn (£4.68bn) in the nine months to the end of September, while revenue fell nearly 2% in its third quarter.
Chinese authorities have come down hard on Didi since its New York Stock exchange listing in June, demanding that it take down its software from mobile app stores while the Cyberspace Administration of China (CAC) investigated its handling of customer data.
The restriction came as a blow for Didi – co-founded in 2012 by former Alibaba employee Will Wei Cheng and backed by SoftBank Group – which was the dominant ride-hailing company in China. The company now faces stiff competition from ride-hailing services by automakers Geely and SAIC Motor.
Under pressure from Chinese regulators concerned about data security, Didi decided in December to delist in New York and pursue a Hong Kong listing.
Shares in Didi soared after its initial public offering (IPO), giving the company a valuation of $80bn and marking the biggest US listing by a Chinese firm since 2014, but have since declined by 65%.
Didi said on Wednesday its board had authorised it to pursue a listing of its class A ordinary shares on the main board of the Hong Kong stock exchange. “The company is executing above plans and will update investors in due course,” Didi said.
The company also announced that Daniel Zhang, the chief executive officer of the Chinese e-commerce company Alibaba who had served as a director on Didi‘s board since 2018, has resigned. He is succeeded by Yi Zhang, a senior legal director of Alibaba Group.