Didi’s earnings plummet as China’s regulatory crackdown hits businesses


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A sign for the Chinese rideshare service Didi can be seen at its headquarters in Beijing, China on July 5, 2021. REUTERS / Tingshu Wang

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Dec. 29 (Reuters) – Chinese rideshare company Didi Global on Wednesday announced a 1.7% drop in third-quarter revenue, as its domestic operations were hit by a regulatory crackdown.

Daniel Zhang, CEO of Chinese e-commerce giant Alibaba Group Holding, who served on Didi’s board since 2018, has resigned, the company said.

He is replaced by Yi Zhang, senior legal director of the Alibaba group.

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After its listing on the New York Stock Exchange in June, Chinese authorities severely criticized Didi, asking him to remove his app from mobile app stores while the Cyberspace Administration of China (CAC) investigated his handling of customer data.

The restriction hit Didi, co-founded in 2012 by former Alibaba employee Will Wei Cheng and backed by SoftBank Group (9984.T), which was China’s leading rideshare company.

The company now faces stiff competition from car-sharing services from car manufacturers Geely (GEELY.UL) and SAIC Motor (600104.SS).

Under pressure from Chinese regulators concerned about data security, Didi decided in December to withdraw from the New York Stock Exchange and continue a listing in Hong Kong.

Shares of Didi, which had soared during their IPO giving the company a valuation of $ 80 billion and marking the highest US listing by a Chinese company since 2014, have since fallen 65%.

Didi said on Wednesday that his board of directors had authorized him to continue listing his class A common stock on the main board of the Hong Kong Stock Exchange.

“The company is executing the above plans and will notify investors in due course,” Didi said.

Revenue for the third quarter ended Sept. 30 fell to 42.7 billion yuan ($ 6.71 billion) from 43.4 billion yuan a year earlier.

Didi, which is expanding its presence in Europe and South America, said revenue from its international operations nearly doubled to 966 million yuan in the quarter.

The net loss attributable to common shareholders was 25.91 yuan.

($ 1 = 6.3680 Chinese yuan)

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Report by Chavi Mehta in Bangalore; Editing by Shinjini Ganguli

Our Standards: Thomson Reuters Trust Principles.

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