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China’s Didi returns to profit for the first time since ill-fated IPO

Chinese ride-hailing giant Didi Chuxing on Monday reported a 25 per cent year-on-year revenue jump in the third quarter, marking a return to profit on the back of a rebound in its home market and a sharpened business focus.

Sales at the Beijing-based company reached 51.4 billion yuan (US$7 billion) in the quarter ended September 30, thanks to double-digit growth in both its China mobility and international businesses.

The China mobility segment, which makes up the bulk of Didi’s business, raked in 46.6 billion yuan during the period, up 26.6 per cent from last year, while the international business, active mostly in Latin American markets such as Brazil and Mexico, saw its revenue grow 27.7 per cent year-on-year to 2 billion yuan.

The company also swung back to profit for the first time since its ill-fated New York listing. Net income attributable to shareholders reached 107 million yuan in the third quarter, compared to a loss of 2.01 billion yuan a year ago.

Signage at the Didi offices in Hangzhou, China. Photo: Bloomberg

Will Cheng Wei, Didi’s founder, chairman and CEO, said the company benefited from “the recovery in domestic demand for mobility services” and the firm’s enhanced focus on its mobility business.

Didi in late August struck a deal to sell its electric vehicle unit to Xpeng – backed by e-commerce giant Alibaba Group Holding, which owns the Post – in exchange for shares worth HK$5.84 billion (US$744 million), withdrawing from an overcrowded Chinese market.
Ride-hailing has been one of China’s fastest-growing internet sectors since the central government lifted Covid-19 restrictions and began its post-pandemic economic recovery efforts early this year, according to a state-backed industry survey in August.
Ride-hailing services added 34.92 million new users in the first six months of the year, the survey showed, contributing to user growth for market players. That was especially true for Didi, which only returned to the Chinese app market in January this year, after Beijing banned it from registering new users for 18 months.

Chinese authorities announced a cybersecurity review into Didi in July 2021, just two days after the company went public in New York under the name Didi Global.

The company completed its delisting process last year, shortly before the Cyberspace Administration of China fined it 8.026 billion yuan for data violations, putting an end to a year-long investigation.

On Monday, Didi announced a plan to buy back up to US$1 billion of its shares over the next two years. The company is pursuing a listing on the Hong Kong stock exchange next year, according to a Bloomberg report last month, citing unnamed sources.

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