Author: Zhou Yuan / Wall Street Insight
Recently, Dida Chuxing (02559.HK) released its first annual report since going public.
Dida Chuxing is an internet transportation platform founded in 2014 by Beijing Changxing Information Technology Co., Ltd., primarily engaged in ride-sharing and smart taxi services. On June 28, 2024, Dida Chuxing was listed on the main board of the Hong Kong Stock Exchange, becoming the first stock in China's shared mobility sector.
According to Dida Chuxing's 2024 financial report, the company's performance last year showed characteristics of &#34;declining revenue and inflated profits&#34;: its core business is facing growth bottlenecks, and the strategic transformation has yet to yield results.
At the same time, Dida Chuxing's ride-sharing business is facing strong competition from Hello, which is creating increasing market pressure on Dida Chuxing. How did they achieve this?
<h2>Downturn: Is it all paper profits?</h2>
In 2024, Dida Chuxing's total revenue was 787 million yuan, a year-on-year decrease of 3.4%; the main revenue source, ride-sharing, accounted for 95.81%, generating 754 million yuan, a year-on-year decrease of 2.7%; the revenue from the smart taxi service segment and advertising and other services was 6.154 million yuan and 27.551 million yuan, respectively, down 45.7% and 7.4% year-on-year.
Although the net profit looks very impressive, with a year-on-year increase of 234.4% to 1.004 billion yuan during the reporting period, this growth almost entirely relied on the fair value changes of preferred shares (870 million yuan); excluding this non-recurring gain, Dida Chuxing's adjusted net profit was 211 million yuan, a year-on-year decrease of 6.6%.
This indicates that Dida Chuxing's net profit exceeding 1 billion yuan in 2024 primarily came from investment income, unrelated to its core business.
The capital market has a clear stance on this &#34;paper profit lacking core business&#34;: since Dida Chuxing went public, its stock price has fallen from the issue price of 6 Hong Kong dollars per share to 1.18 Hong Kong dollars per share at the close on April 2, 2025, a decline of over 80%.
Wall Street Insight noted that last year, the cost of Dida Chuxing's main revenue source, ride-sharing, increased by 10.2% year-on-year to 207 million yuan, but by significantly reducing driver and passenger incentives (from 67.07 million yuan to 38.46 million yuan, a decrease of 42.66%) and simultaneously increasing the average revenue per user, the segment profit only decreased slightly by 2.3% to 508 million yuan.
In terms of efficiency, Dida Chuxing's marketing expenses in 2024 decreased by 26.8% year-on-year to 17.1 million yuan, mainly relying on algorithm optimization for precise customer acquisition.
This indicates that Dida Chuxing is maintaining its profitability through &#34;reducing subsidies and improving efficiency&#34; (cost reduction and efficiency enhancement).
Dida Chuxing's CFO Jiang Zhenyu stated at the annual performance meeting that the ride-sharing industry in China is still in the development stage, and market demand has not been fully released. In the future, they will seek more growth through deep cooperation with third-party platforms.
However, it should be noted that despite significantly reducing driver and passenger incentives, which temporarily &#34;withstood&#34; the pressure of declining net profits in the ride-sharing business, it has lost market attractiveness
According to financial report data, by the end of 2024, Dida Chuxing had 18.9 million certified car owners for its ride-sharing service. Although this represents a year-on-year increase of over 21%, the order volume decreased by 8.5% year-on-year (from 130 million in 2023 to 119 million in 2024). The average annual order volume per car owner also dropped from 8.3 to 6.3, a decline of 24%, reflecting low activity levels among new car owners and the risk of &#34;zombie car owners&#34; on the platform.
It is noteworthy that Dida Chuxing's competitor, Hello, has put significant pressure on Dida Chuxing in the ride-sharing business.
According to a report from Frost &amp; Sullivan, publicly available data from Hello's ride-sharing service, and the 2024 annual reports of Dida Chuxing and Didi Chuxing, Hello ranked first in the transaction volume of China's ride-sharing market in 2024, accounting for 47%. Dida Chuxing came in second with a market share of 31.8%, while Didi Chuxing ranked third with a share of 17.3%. Other platforms shared the remaining market share.
From the ranking of shares, it is clear that Dida Chuxing is significantly lagging behind Hello. Additionally, the number of certified car owners for Hello's ride-sharing service exceeded 33 million in 2024, which is 14.1 million more than Dida Chuxing.
<h2>The Challenger Hello's Weapons</h2>
Hello was established in September 2016, starting with a single bike business and has spent over eight years building a &#34;mobility + local life&#34; business landscape consisting of two-wheeled shared services, four-wheeled mobility services, and emerging local life services, with a cumulative registered user base exceeding 750 million.
In 2022, Hello announced a brand upgrade to &#34;Hello,&#34; marking the beginning of a new development phase transitioning from a mobile mobility platform to a local mobility and life service platform.
Hello's main business is divided into three parts: 1. Shared two-wheeled mobility services (bikes + e-bikes), which is the cornerstone of Hello's business and holds an absolute dominant position; 2. Ride-sharing and four-wheeled mobility services, which are strategic growth points and high-margin businesses under a light asset model; 3. Emerging local life services (including hotels, in-store group buying, freight, etc.), which serve as a testing ground for ecological extensions.
Why does Hello's ride-sharing business perform better than Dida Chuxing, which focuses primarily on this service?
One reason is that Hello has introduced innovative features such as a highway fee sharing mechanism and an order PK model, effectively enhancing user experience and car owner engagement.
In 2023, Hello was the first in the industry to launch a highway fee negotiation feature, allowing passengers to express their willingness to pay and share proportions (such as full or partial responsibility) when placing an order, enabling car owners to choose whether to accept the order based on passenger preferences.
This measure significantly improved user experience. According to publicly available information from Hello, the complaint rate from users regarding highway fee issues decreased by 25%.
In 2024, Hello introduced the order PK model: based on criteria such as order acceptance distance, route alignment, completion rate, and service evaluation, a comprehensive score is calculated for car owners participating in specific order PKs, allowing only those with higher scores to accept corresponding orders.
According to Hello's public disclosures at the time: &#34;This year, we surveyed over ten thousand users, and more than 95% of passengers hope the platform will increase the screening standards for accepting orders. In a survey among car owners, about 82% also expressed a desire to introduce an order competition mechanism.&#34;
Wall Street Journal noted that although the ride-sharing market accounts for a small proportion of China's overall travel market, F&amp;S estimates that in 2024, the scale of China's ride-sharing market will reach 37.1 billion yuan; by 2028, the total scale will reach 103.9 billion yuan, with a compound annual growth rate of over 29%.
Currently, the ride-sharing market is rapidly recovering, closely related to changes in consumer behavior against the backdrop of the macro economy.
As residents become more rational in their travel consumption, ride-sharing, with a price advantage of about 50% lower than ride-hailing, has become the preferred choice for intercity commuting and holiday travel.
According to reports from several domestic media, the demand for ride-sharing during the Spring Festival in 2025 is expected to be around 120 million trips. Among them, Caijing quoted official news from Hello, stating, &#34;It is expected that this year's Spring Festival holiday will see over 60 million ride-sharing trips, an increase from last year, setting a new record for the platform.&#34;
There is evidence that Hello is still expanding this competitive advantage. Wall Street Journal learned from authoritative sources that Hello's ride-sharing business department is significantly increasing brand investment.
An industry authority revealed to Wall Street Journal that based on a positive outlook for the ride-sharing market, Hello's ride-sharing business department has launched a &#34;growth campaign,&#34; with the first goal focusing on marketing and brand promotion to expand its market advantage.
<h2>Transformation: Support from Listed Companies</h2>
Why is Hello increasing its investment in ride-sharing at this time?
This can be observed through Hello's indirect control of the A-share listed company &#34;Yong'an Xing (603776.SH).&#34;
On March 14 this year, through a series of capital actions, such as equity transfer, relinquishing voting rights, and a private placement plan, Shanghai Hamao Business Consulting Co., Ltd. (hereinafter referred to as Shanghai Hamao), which is indirectly wholly owned by Hello, along with Hello co-founder and CEO Yang Lei's personal holdings, acquired 38.4% of the voting rights of Yong'an Xing for approximately 1.5 billion yuan.
On March 16, Yong'an Xing announced that its controlling shareholder had changed to Shanghai Hamao, and the actual controller had changed to Yang Lei.
From March 17 to March 21, Yong'an Xing's stock hit the daily limit for five consecutive days, as the market interpreted this as a prelude to Hello's indirect listing, referring to Yong'an Xing as the &#34;first stock of shared bicycles.&#34; On March 19, Yong'an Xing issued a &#34;clarification&#34;: there are no asset injection plans within the next 12 months.
Although Yong'an Xing denied short-term asset injection, the market generally believes that Hello may gradually inject its core businesses (such as ride-sharing and local life services) into Yong'an Xing through private placements or restructuring measures after 36 months, starting from March 2028.
Hello's ride-sharing market share exceeds 47%, occupying a dominant market position, while there is an overlap between Yong'an Xing's public bicycle users and ride-sharing users (such as commuters), allowing Hello to enhance user stickiness through scenario linkage.
According to public information, Hello has invested a total of 3.3 billion yuan in R&amp;D for its two-wheeled business, with safety management capabilities such as AI scheduling, Tianyan monitoring system, and riding safety monitoring being industry firsts
By holding a controlling stake in Yong'anxing, Hello can integrate smart transportation data (such as heat analysis of docked bike parking), optimize ride-sharing route planning algorithms, shorten order pickup distances by 10%, and improve the matching efficiency of intercity orders.
In addition, relying on a traffic pool of 750 million registered users, Hello may intend to integrate multi-brand shared bike resources to build a &#34;mobility + lifestyle&#34; service closed loop.
Hello's largest business, &#34;shared bikes,&#34; combines the genes of mobility users and local service characteristics, helping Hello consolidate and enhance its market and competitive advantages in the ride-sharing business.
Through the flywheel effect of &#34;high-frequency mobility driving low-frequency consumption,&#34; as well as the scale and synergy effects in the shared mobility sector, Hello is expected to solidify its leading position in the ride-sharing market.
In the foreseeable future, Hello will use shared mobility as the foundation for its growth flywheel, acquiring and retaining users through shared mobility services at the front end, while other services will continuously evolve from this foundation to deepen the value chain. Thus, Hello will transform from the increasingly fading &#34;shared bike player&#34; to a &#34;comprehensive mobility service provider.&#34;
The weak performance of Dida Chuxing's 2024 annual report, contrasted with Hello's strong growth, marks the entry of the ride-sharing industry into a new stage dominated by the &#34;Matthew Effect.&#34;
Hello's triple moat built through scale barriers (33 million car owners), technological innovation (highway fee sharing/order PK model), and ecological synergy (750 million user matrix) will create a competitive advantage that is difficult to replicate.
Under the trillion-dollar market dividend predicted by Sullivan, Hello's leading position is not only difficult to shake but is also expected to reshape the overall landscape of China's shared mobility industry; while players relying on a single business may face a dual shrinkage of market share and capital value

How did Hello Group break through against the trend?

- Dida Chuxing's first annual report post-IPO reveals a decline in revenue and inflated profits, with a 3.4% drop in total revenue to 787 million yuan in 2024.  
- The company faces increasing competition from Hello Chuxing, which has captured 47% of the market share in the ride-sharing sector, compared to Dida's 31.8%.  
- As Dida struggles with its core business, Hello's innovative strategies and market expansion position it strongly for future growth in the rapidly evolving ride-sharing market.

The 2024 Annual Report of Dida Reflects Changes in the Ride-Hailing Industry