Dida Chuxing to Become Asia's First Ride-Hailing Stock
With JD.com, Trip.com and the NYSE-listed car-maker NIO as its backers, the DiDi rival is expected to raise as much as USD 500 million.
On October 8th, Dida Chuxing formally submitted a prospectus to the Hong Kong Stock Exchange, with the intention of becoming Asia's first ride-hailing company to go public. The joint sponsors of this IPO are Haitong International Securities Group and Nomura International (Hong Kong).
The prospectus shows that Dida is China's leading technology-driven mobile travel platform, focusing on the development of ride-hailing and taxis. According to a report by Frost & Sullivan, in 2019, Dida ranked first in the downwind market with a market share of 66.5%. As of June 30, 2020, Dida has provided ride-hailing services in 366 cities across the country, with approximately 19.2 million registered and 9.8 million certified ride-hailing riders.
At the same time, the F&S report shows that Dida ranks second in the taxi online booking market. As of June 30, 2020, Dida has provided taxi-hailing services in 86 cities and has established strategic partnerships with municipal or district-level taxi associations in 17 cities. According to the prospectus, Dida completed 110 million online taxi-hailing orders in 2019 and provided online taxi-hailing services in 86 cities across the country.
Other than that, in August this year, Dida Chuxing announced a plan to cooperate with US-listed EV-maker NIO. The aim of the cooperation is to encourage NIO's car owners to join its hitching service platform, in order to increase Dida's supply of transport capacity.
As for the financial data, according to the prospectus that the operating income in the past three years of 2017, 2018, and 2019 was CNY 49 million, CNY 118 million and CNY 581 million, an increase of nearly 12 times in the three years. According to the firm, Dida does not own vehicles, and there is no need to continue to pay large-scale incentives and subsidies to downwind car owners and taxi drivers, making fixed and variable costs very small. This asset-light business model has enabled Dida to rapidly expand its business scale with minimal investment, and effectively promote the growth of revenue and net profit.