UBER - Dida Wins Ride-Sharing Race To Market But Could Stay Stuck In First Gear | Benzinga
Key Takeaways:
- Dida has been approved to list in Hong Kong, reporting adjusted net profits in each of the last three years
- The ride-sharing company recently lost its title as China’s top carpooling platform to HelloRide, even as it relies heavily on the business
By Lau Chi Hang
Dida Inc. has taken pole position in the race to become China’s first publicly traded ride-sharing app, even as leading ride-sharing platform DiDi and other smaller rivals reportedly eye similar listings.
Dida is likely to cross the IPO finish line later this week, after its listing application was approved last week by the Hong Kong Stock Exchange. Having received that key green light, the company now plans to sell about 39 million shares for HK$5 to HK$7 apiece, raising up to HK$270 million ($35 million). The shares are expected to make their trading debut on Friday.
The road to Dida’s listing has been full of twists and turns, to say the least, including four previous attempts that ultimately stalled. With the end now in sight, it will be up to investors to determine the company’s worth.
Dida’s prospectus shows it’s zig-zagged in and out of profitability, reporting a profit of 1.73 billion yuan in 2021, only to swing to a loss of 180 million yuan the next year, and then zoom back to the black with a 300 million yuan profit last year. Part of the volatility owed to big fluctuations in the fair value of its preferred shares. Excluding that factor, it was profitable for each of the last three years, including a 238 million yuan adjusted profit in 2021, falling to 84.7 million yuan in 2022, before rebounding to 226 million yuan last year.
Small Niche In A Crowded Sea
Leading U.S. peer Uber (NYSE: UBER) and hometown market leader DiDi have only found profits in the last year, making Dida’s ability to record adjusted profits for the last three years all the more impressive. Much of that could owe to its target market, which, until recently, was relatively underserved ...