The company's revenue fell by about 44% in the second half of last year, worsening from a 29% decline in the first half.
<h4>Key Points:</h4>
<ul>
<li>In the six months ending December last year, DIDA INC's revenue was nearly halved, and the company likely incurred losses during this period.</li>
<li>The company's difficulties mainly stem from its relatively small scale, inefficiencies in its ride-sharing model, and the rise of a new generation of open ride-hailing platforms.</li>
</ul>
Yang Ge
Is the ride-hailing service provider DIDA INC (2559.HK) heading towards its end?
This question was particularly concerning in the profit warning released last Friday. DIDA INC is the first major ride-hailing company in China to go public. The announcement indicated a significant decline in DIDA INC's revenue for 2025, with a further worsening in the second half of the year. The company's profits also showed a similar trend, with potential losses in the second half.
DIDA INC attributed its rapid decline in performance to intensified market competition and a slowing Chinese economy. Unlike larger competitors like Didi and CaoCao Chuxing (2643.HK), DIDA INC primarily focuses on providing ride-sharing services for price-sensitive passengers. The prices for these services are typically lower than traditional ride-hailing, but the condition is that a single vehicle may need to pick up and drop off multiple passengers at different locations during one trip.
This can lead to longer travel times for individual passengers, and if the pickup and drop-off locations are far apart, the time may be significantly extended. DIDA INC referred to this issue as its main pain point and stated that it is working to optimize drivers' route planning to minimize each passenger's travel time.
Despite this pain point, in the context of a slowing Chinese economy where consumers are looking to cut costs, one might think that such low-priced services would be more popular. However, DIDA INC's situation is clearly not the case. According to the profit warning, DIDA INC expects its revenue for 2025 to be between 480 million and 530 million yuan (69 million USD), which, based on the median, represents a year-on-year decline of about 36% from 787 million yuan in 2024.
Based on the company's previously released data for the first half of last year and the median of the full-year revenue forecast range, DIDA INC's revenue in the second half nearly halved, falling by about 44% year-on-year. In contrast, the company's revenue in the first half declined by 29% year-on-year, indicating a significant deterioration in the second half.
Similar calculations show that the company's adjusted profit (excluding certain non-cash items) plummeted by 92% year-on-year in the second half, leaving only 8.2 million yuan, while it had grown by 4.7% year-on-year in the first half. Worse still, the company expects a full-year net profit of 123 million to 136 million yuan, with the median lower than the 134 million yuan profit recorded in the first half, indicating that DIDA INC likely incurred losses in the second half of 2025.
Investors are concerned about this pessimistic report. On the first trading day following the announcement (Monday), DIDA INC's stock price fell by 4.8%. Excluding the larger Didi, which briefly listed in the U.S. in 2021, DIDA INC became the first ride-hailing company in China to go public in 2024, attracting market attention at the time. However, the company issued shares at a price of 6 Hong Kong dollars per share, but as of Monday's close, the stock price was only 1.60 Hong Kong dollars, with its market value evaporating by about three-quarters
<h4>Under Pressure from Giant Competitors</h4>
DIDA INC is facing multiple challenges, and under its current business model centered on ride-sharing, these difficulties may be hard to overcome.
Scale may be its biggest challenge. The company is up against several larger competitors, including Didi, Cao Cao Mobility, and various city-based ride-hailing companies supported by local taxi operators or automobile manufacturers. For example, Didi, known as the Chinese version of Uber (UBER.US), generated 53.9 billion yuan in ride-hailing service revenue in the first nine months of 2025, approximately 100 times DIDA INC's annual revenue scale. Cao Cao Mobility's revenue in the first half of last year was close to 10 billion yuan, also about 20 times DIDA INC's annual revenue.
Another significant disadvantage for DIDA INC is the rise of a new generation of open platforms. These platforms can connect multiple ride-hailing companies, allowing small and medium-sized operators to conduct business without investing huge amounts of capital to build their own platforms. Such open platforms are typically operated by large companies like Baidu and Amap, which have ample resources to develop applications that can compete with traditional independent platforms like DIDA INC or Didi.
Another issue is the previously mentioned pain point, where using DIDA INC's services often takes twice as long or even longer than traditional one-on-one ride-hailing services.
In its mid-2025 report, DIDA INC stated that it is taking measures to improve its ride-sharing algorithms to plan more reasonable routes and shorten travel times for passengers and drivers. The company will also launch taxi services in 2024, which will primarily adopt a more traditional one-on-one model, where one driver corresponds to one passenger. However, this business still accounts for a very small proportion of overall revenue, with less than 1% of revenue in the first half of last year.
One of DIDA INC's few advantageous areas is its gross margin, as it earns more revenue per ride than most of its peers. In the first half of last year, the company's gross margin was 67%, while Uber and U.S. competitor Lyft (LYFT.US) had gross margins of about 40%. Cao Cao Mobility's gross margin was only 8.4%, mainly due to its business model using its own fleet rather than vehicles provided by drivers, resulting in higher costs. However, even in terms of gross margin, DIDA INC has seen a decline, dropping from 73.3% in the same period two years ago, while Cao Cao Mobility's gross margin has been rising.
DIDA INC's cash reserves are also relatively ample, holding about 1 billion yuan in cash as of the end of June last year, roughly the same as a year earlier. This means the company should not face the risk of running out of funds in the next year or two. However, if it cannot reverse the trend of significant declines in revenue and profit, once its existing funds are gradually depleted, the company may still face cash tightness in the future

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DIDA INC's revenue fell by approximately 44% in the second half of last year, further widening from a 29% decline in the first half, and it may have already fallen into a loss. The company is facing challenges from intensified market competition and economic slowdown, primarily focusing on providing ride-sharing services for price-sensitive passengers. Revenue is expected to decline to between 480 million and 530 million yuan in 2025, a year-on-year decrease of about 36%. Adjusted profit plummeted by 92% in the second half, leaving only 8.2 million yuan

With both revenue and profit plummeting, is DIDA INC. heading towards its twilight?