Recently, Dida Chuxing submitted its IPO application to the Hong Kong Stock Exchange, which is its third submission for Hong Kong stock listing after two unsuccessful listings.
On February 20, Dida Chuxing (Chinese:嘀嗒出行) submitted its IPO application to the Hong Kong Stock Exchange, which is its third submission for Hong Kong stock listing after two unsuccessful listings. The Dida Chuxing's IPO was co-sponsored by CICC (Chinese: 中金公司), Haitong International Securities Group Limited (Chinese: 海通国际) and Nomura Orient International Securities Co., Ltd (Chinese: 野村国际).
Dida Chuxing opened up the market by ride-sharing service. In 2014, it launched the ride-sharing service, which is also its largest source of income. In the past three years, Dida Chuxing's ride sharing service accounted for more than 89% of its revenue. In the first nine months of 2022, Dida Chuxing's ride-sharing service revenue accounted for 91.1%, smart taxi service revenue accounted for 3.6%, and advertising and other service revenue accounted for 5.3%.
As of September 30, 2022, Dida Chuxing provided ride-sharing services in 366 cities across the country, with approximately 12.4 million private car owners on the platform. According to the Frost & Sullivan report, Dida Chuxing was the largest ride-sharing platform in China in 2021, based on the total transaction volume and the number of rides. The transaction volume (GTV) of Dida Travel was CNY 8.1 billion in 2020, CNY 7.8 billion in 2021, and CNY 4.6 billion in the first nine months of 2022.
The ride-sharing service is a high-margin business. In 2020 and 2021, the gross profit margin of Dida Chuxing Shunfeng was above 85%, and the first nine months of 2022 decreased compared with the same period in 2021. In 2020, 2021, and the first nine months of 2022, the gross profit margins of Dida Chuxing's ride-sharing services were 86.7%, 85.4%, and 80.5%, respectively.
Regarding the decline in gross profit margin, Dida Chuxing's prospectus explained that due to the increase in subsidies for private car owners and the increase in the upper limit of ride-sharing travel insurance, the growth rate of ride-sharing service costs is higher than the growth rate of revenue.