Didi Chuxing made a huge net loss of 30 billion yuan (US$4.7 billion) in the third quarter of 2021, according to its financial report released on Dec. 29.
Analysts said that China’s regulator banned new users from registering Didi, resulting in the company’s revenue decline.
Didi’s financial report shows that in the third quarter of 2021, the total number of ride orders via Didi’s core platform was 2.86 billion in the third quarter, down by 150 million from the second quarter. The volume of ride orders via China Travel’s platform was 2.36 billion, declining by 210 million from the previous quarter.
Didi Chuxing was listed in New York stock exchange on June 29, 2021, ignoring the warning from the Chinese authorities. On July 4, China’s State Internet Information Office announced the removal of the Didi Travel app.
Since the communist regime announced the crackdown on Didi, the company’s shares have plummeted.
Didi’s IPO price was US$14, and its market value was briefly close to US$80 billion. However, information from FactSet showed that Didi’s share prices fell to US$5.30 on Dec. 24, and its market value fell to US$25.6 billion.
Wang Jun, former director of the International Department of the Beijing Tianze Economic Research Institute, said that Didi will become a junk stock following this trend.
Wang said that Didi’s domestic market has not added any new users since the government’s crackdown, only existing users can utilize the platform. As a result, the company retains its old consumers, but this is not guaranteed because customers may transfer to other online car-hailing companies.
An important reason why Didi has become a target of the government is its massive traffic data. In 2017, Didi launched the Orange Dashboard. More than 10 million Didi vehicles pass Orange every day to become Didi’s real-time street view surveying and mapping vehicle.
Back in 2015, Didi Media Research Institute, in conjunction with Xinhuanet’s New Media Center, released a “Competition of Ministries and Commissions Working Overtime in Hot Weather”. The article revealed that Didi has mastered the travel patterns of officials from the Ministry of Public Security, the Ministry of Supervision, the Ministry of Civil Affairs, the Ministry of Justice, and the Ministry of Finance.
On July 16, seven parts of the Chinese Communist Party jointly stationed in Didi and launched a “cyber security” review.
Didi announced on Dec. 3 that it will delist from the New York Stock Exchange and move to the Hong Kong Stock Exchange. However, Didi’s Hong Kong listing journey is unpredictable due to its massive losses.