Beijing-based ride-hailing platform Dida has filed for an initial public offering to raise new funds from the capital market, ahead of its major rival Didi Chuxing, according to its prospectus filed with the Stock Exchange of Hong Kong on Wednesday.
The company has not revealed any other details concerning the IPO.
Dida runs an app allowing car owners to offer vacant seats to passengers with similar travel itineraries, allowing both to cut travel expenses. The company claims to be the largest carpooling marketplace in China, with a market share of 66.5% of total carpooling rides in 2019, according to a report by consultancy Frost & Sullivan (F&S) cited in the prospectus.
However, Dida’s dominance in the carpooling market came at a time when Didi Chuxing, China’s largest ride-hailing platform, suspended similar services, called Didi Hitch, after two female passengers were sexually assaulted and killed in separate incidents in 2018.
The Dida app matched 48.2 million rides in 2018, up from 23.6 million in 2017, and facilitated 178.5 million rides in 2019 at a time when Didi Hitch was under suspension. Didi, which resumed Hitch in late November 2019, got hit by government investigations stemming from the 2018 incidents, slowing down its growth and fundraising moves.
In addition to carpooling services, Dida also offers taxi-hailing services, ranking as the second largest online mobility platform in China’s taxi market in terms of the number of rides, according to the F&S report.
However, Dida does not offer as many services as Didi. The two companies both operate carpooling and taxi-hailing services, while Didi lets users order a transportation service offered by a private car owner, who just works like a taxi driver on a daily basis but is not affiliated with any taxi operator, with its Didi Express and Didi Premier platforms, respectively, while Dida does not have similar services.
Didi generated a deficit of up to RMB 10.9 billion (USD1.61 billion) in the 2018 financial year, KrASIA reported in February 2019, mainly due to the cost of attracting and hiring qualified drivers for its ride-hailing services, who must have at least three years’ of driving experience and no criminal record.
Dida said in the prospectus that the company has become profitable in terms of adjusted net profit since 2019.
The company generated RMB 172.4 million (USD 26 million) in adjusted net profit in 2019 and RMB 150.8 million (USD 22.5 million) in the first half of this year even at a time when the COVID-19 pandemic hit the mobility sector, representing an adjusted net profit margin of 29.7% and 48.6% respectively.
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