UBER - DiDi Drives Back Into Growth Lane As Aggregators Encroach On Its Turf | Benzinga
Key Takeaways:
- DiDi Global’s first-quarter revenue grew 14.9% to 49.1 billion yuan, marking a fifth straight quarter of double-digit growth
- The ride hailing app has moved past earlier regulatory headwinds, but has lost market share to competition and smaller rivals using aggregating platforms
By Hugh Chen
Nearly two years after driving headlong into a regulatory wall, China’s leading ride-hailing app DiDi Global Inc. finally began to regain some of its former momentum early last year as its woes receded. Those woes dated back to the company’s June 2021 New York IPO, when it was accused of misusing user data and listing its shares despite objections from Chinese regulators.
The company, often called the "Uber of China,” passed a milestone in January last year when its apps reappeared in Chinese app stores, following a crippling nearly two-year suspension that was part of a punishment meted out by regulators. It has continued to publish earnings reports even after de-listing its shares in June 2022. The latest of those, published in late May, signals that DiDi is regaining some of its momentum, as it recorded double-digit revenue growth, building on similar strong growth over the previous four quarters.
Still, the company is unlikely to ever return to its former position as China’s dominant ride-sharing service due to changes in the market, most notably from slowing growth and the rise of aggregating platforms that make it easier for new rivals to set up and quickly gain traction.
DiDi reported first-quarter revenue of 49.1 billion yuan ($6.78 billion), up 14.9% year-on-year. That followed increases of 19%, 53%, 25%, and 55% over the previous four quarters, respectively.
Equally important, the formerly money-bleeding company has finally found a road to profits, at least on an adjusted basis. In the latest quarter, it reported adjusted net income of 1.4 billion yuan, even though it lost money on a GAAP basis due to investment losses related to its 3.25% stake in electric vehicle maker Xpeng. That news will certainly ease concerns of potential new investors as DiDi prepares to relist – most likely in Hong Kong.
China’s ride-hailing ...