Didi Global revenue falls, losses climb in third quarter as tech giant prepares to deslist in US amid security probe

Didi announced a US$4.77 billion loss in the third quarter and a 1.7 per cent decline in revenue after growing in the first half of the year
Since Beijing launched a cybersecurity review into Didi in July, the ride-hailing giant said it would delist in New York in favour of Hong Kong

Didi Chuxing

Coco Fengin Beijing

Published: 1:00pm, 30 Dec 2021

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Chinese ride-hailing giant Didi Global announced a 30.4 billion yuan (US$4.77 billion) loss in the third quarter and a 1.7 per cent decline in revenue, showing the impact of Beijing’s ongoing cybersecurity review into the company that has reversed its growth from the first half of the year.

Revenue for the period ended September was 42.7 billion yuan, down from 43.4 billion yuan in the same period a year earlier, according to Didi’s disclosure on Wednesday. The company had also been profitable in the third quarter last year, with 672 million yuan in net income.

Didi’s fortunes took a turn on the second day of the quarter this year, days after its blockbuster US$4.4 billion initial public offering in New York in June, when the Cyberspace Administration of China announced its investigation into the company. The ride-hailing firm was then prevented from registering new users and had 25 of its apps removed from app stores.

How Didi forced its way from Beijing to New York - and ended up in Hong Kong

This month, Didi announced that it would delist from the New York Stock Exchange and pursue another listing in Hong Kong. It has barred employees from selling their stock until after the Hong Kong listing, which currently has no timeline.

Didi shares closed down 8.2 per cent to US$4.94 on Wednesday, nearly a third of its US$14 IPO price.

Leading up to the IPO, the company had been growing, with revenue up 75 per cent to 90.4 billion yuan in the six months ended June. However, losses increased fourfold during that period to 18.8 billion yuan amid a global expansion that has been upended by the security probe.

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Why China is tightening control over cybersecurity

Since a task force entered Didi’s offices in July, the investigation has gummed up operations at the world’s largest ride-hailing firm by revenue. Engineers and product managers had to shift priorities and were kept busy writing patches to close what regulators called technical loopholes in its data management system.

Revenue for Didi’s ride-hailing business in China, where it derives most of its income, has been especially hard-hit, falling 5.1 per cent in the third quarter to 39 billion yuan. The outlook was rosier for its much smaller overseas ride-hailing operations, which nearly doubled revenue to 966 million yuan.

Amid app disruptions and removals, Didi has also reportedly seen a decline in users, although the company does not publish the numbers itself. Average daily active users fell to 10.9 million in August from 15.6 million in June, the Financial Times reported in September, citing figures from Shenzhen-based market researcher Aurora Mobile. Other ride-hailing firms also saw a decline in users during the period, but by a smaller proportion.