Dida Inc, a Chinese online platform that offers carpooling and taxi-hailing services, has renewed its Hong Kong listing plan in yet another attempt to sell shares in the Asian financial hub despite regulatory challenges faced by the country’s rapid-evolving ride-sharing industry.
Backed by China’s e-commerce giant JD.com, New York-listed Trip.com, and electric vehicle (EV) maker Nio’s investment arm, the nine-year-old firm submitted its application for an initial public offering (IPO) in Hong Kong on Monday.
It appointed China International Capital Corporation Hong Kong Securities Limited, Haitong International Securities Company Limited, and Nomura International (Hong Kong) Limited as the joint sponsors of its listing, shows its filing, although the firm has yet to disclose how much money it targets to raise from the market debut.
Beijing-headquartered Dida pressed the restart button for its listing plan after a few failed attempts in the prior years.
It had initially filed for a Hong Kong IPO in October 2020 in a race with the then privately-held, stronger domestic rival Didi Global to launch Asia’s first ride-hailing IPO. Its application lapsed in April 2021, immediately after which the firm submitted another listing application in Hong Kong but only to see it expire again after six months.
Dida had set a target to raise $300-500 million in its first listing attempt in 2020, Nikkei Asia reported at the time, citing two people familiar with the matter.
Regulatory challenges
Founded in 2014, Dida offered app-based carpooling marketplace services in 366 cities nationwide, with about 12.4 million certified private car owners as of September 30, 2022. Its smart taxi services connected passengers with over 150 million domestic taxi drivers as of 2021, according to its prospectus.
In its prospectus, Dida set forth potential regulatory changes as one of the main risk factors that “may materially or adversely affect” its business.
“An evolving market may also bring forth significant changes in the laws and regulations and in the regulatory landscape,” Dida said in the filing. “… New laws and regulations may be enacted to the disadvantage of our business. Regulators may also view matters or interpret current laws and regulations differently than they have in the past or in a manner adverse to our business.”
The firm continued: “We may fail to adapt to such changes timely and effectively, and we may incur significant compliance costs in this process.”
Its concerns over regulatory challenges highlighted the heavy scrutiny in China’s nascent ride-hailing industry, with Didi’s tarnished US IPO being a landmark event. In June 2021, Chinese regulators opened up a cybersecurity probe into Didi shortly after its $4.4-billion IPO on the New York Stock Exchange (NYSE).
In early 2022, Didi was reportedly in discussion to launch a listing in Hong Kong as it prepared to exit the New York Stock Exchange (NYSE). But the plan was halted later the same year, as sources said that Didi would not receive a green light to its relisting plan until it makes sufficient “rectifications” in accordance with probes conducted by China’s cyberspace administration, South China Morning Post reported.
With the economy and the stock market expected to come out of the pandemic, the firm is looking to ride on the more positive investor sentiment.
In Hong Kong, more than 100 new listings are expected to raise about HK$200 billion ($25.5 billion) in 2023, accounting firm PricewaterhouseCoopers (PwC) estimates. That compares to 2022, when Hong Kong booked only 89 new listings, the lowest since 2014, according to Shanghai-based financial data provider Wind.