BABA - DiDi: Manifestation Of Risks

• News broke over the weekend that the Cyberspace Administration of China ordered app stores to remove DiDi's app.
• The prompt conclusion of the investigation leading to the suspension of app downloads just days after DiDi went public led to wild speculations about Beijing's intentions.
• DiDi's large ride-hailing market share and societal value suggest that the authorities would not take drastic actions against the ride-hailing platform.
• However, user boycott may prove damaging, whether the national security concerns are valid or not.
• Mitigating factors such as alternative ways to hail DiDi rides and an autonomous future could soften the blow but near term investor sentiment is very fragile.

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