--- title: "Dida Chuxing: Considering a speculative play in the ride-sharing lane" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/21968848.md" description: "Let me get straight to the point. Whether to subscribe to DiDi Chuxing's stock, personally I think although DiDi Chuxing's fundamentals are average, its float size is relatively suitable for small-cap speculation opportunities. If you want to try, you can take a speculative position. The gambling element in the IPO market is still quite significant now. DiDi Chuxing I. Company Overview DiDi Chuxing is a technology-driven platform that mainly provides hitch ride-sharing services to utilize idle seats in private cars, aiming to create more transportation capacity while reducing environmental impact. It also offers relatively small-scale smart taxi services..." datetime: "2024-06-20T15:08:20.000Z" locales: - [en](https://longbridge.com/en/topics/21968848.md) - [zh-CN](https://longbridge.com/zh-CN/topics/21968848.md) - [zh-HK](https://longbridge.com/zh-HK/topics/21968848.md) author: "[南山必胜客w](https://longbridge.com/en/profiles/9869624.md)" --- # Dida Chuxing: Considering a speculative play in the ride-sharing lane Let me get straight to the point: whether to subscribe to Didi Chuxing's stock. Personally, I think Didi Chuxing's fundamentals are mediocre, but its relatively small float size makes it suitable for speculative plays. If you want to take a shot, you can try a small position. The current IPO market is heavily driven by speculation.[Didi Chuxing](https://admin.winbull.vip/h5/analyst/$%E5%98%80%E5%97%92%E5%87%BA%E8%A1%8C\(02559.HK\)$) **1\. Company Overview** Didi Chuxing is a technology-driven platform primarily offering ride-sharing services by utilizing idle seats in private cars, aiming to increase transportation capacity while reducing environmental impact. It also provides a relatively smaller smart taxi service designed to improve efficiency for stakeholders in China's taxi industry, thereby enhancing the travel experience for everyone. Since its inception and as of December 31, 2023, the company has served approximately 69.4 million unique ride-sharing passengers. In terms of gross transaction value (GTV) and ride-sharing trips, Didi Chuxing operated China's second-largest ride-sharing platform in 2023, with a GTV of RMB 8.6 billion and 130.3 million ride-sharing trips, capturing 31.8% of the market by GTV and 31.0% by trip volume. As of December 31, 2023, the company provided app-based ride-sharing services in 366 cities across China, with about 15.6 million certified private car owners, of which 5 million (32.0%) were active in 2023. The company launched its smart taxi service in 2017, focusing on ride-hailing solutions provided through the Didi Taxi Driver App. As of the latest practicable date, the company offered taxi-hailing services in 91 Chinese cities, including 80 cities where it charges service fees to taxi drivers for facilitated rides. In 2023, its market share by completed trips was 0.09%, while its share of China's total taxi market GTV was 0.07%. Didi Chuxing shares idle seats in private cars through its ride-sharing platform and enhances taxi capacity utilization and user experience via its smart taxi service. **2\. IPO Details** The subscription period runs from June 20 to June 25, with the stock expected to list on the Hong Kong Stock Exchange's main board on June 28 under the ticker $DIDA INC(2559.HK). The offer price range is HKD 5-7 per share, with a board lot of 500 shares and an entry cost of HKD 3,535.30. The company plans to issue 39.091 million shares globally, with CICC, Haitong, and Nomura acting as sponsors. There is a greenshoe option but no cornerstone investors. **Financial Overview** In terms of revenue, Didi Chuxing recorded RMB 780.6 million in 2021, RMB 569.1 million in 2022, and RMB 815.1 million in 2023. In terms of profitability, the company's adjusted net profit (non-IFRS) was RMB 238 million in 2021, RMB 84.7 million in 2022, and RMB 225.6 million in 2023, with adjusted net profit margins (non-IFRS) of 30.5%, 14.9%, and 27.7%, respectively. Gross profit was RMB 631.3 million in 2021, RMB 427.6 million in 2022, and RMB 605.4 million in 2023, with gross margins of 80.9%, 75.1%, and 74.3%, respectively. **Use of Proceeds** The company expects net proceeds of approximately HKD 147.2 million (based on the mid-point offer price of HKD 6.0). According to the prospectus, about 50.0% of the proceeds will be used to expand the user base through rewards, subsidies, online and offline marketing campaigns; 35.0% will enhance technological capabilities and upgrade safety mechanisms; and 15.0% will improve monetization. **3\. Industry Outlook** According to Frost & Sullivan, China's car passenger market includes hailed taxis, ride-hailing taxis, ride-hailing services, and ride-sharing. In 2023, taxis, ride-hailing, and ride-sharing accounted for 54.2%, 41.4%, and 4.4% of the market by GTV, respectively. The GTV of China's car passenger market is expected to grow from RMB 722.7 billion in 2024 to RMB 1,238.9 billion in 2028, a CAGR of 14.4%. The ride-sharing market is expected to grow steadily, with GTV projected to increase from RMB 37.1 billion in 2024 to RMB 103.9 billion in 2028, a CAGR of 29.4%. From 2024 to 2028, the taxi market's GTV is expected to grow at a CAGR of 7.3%, while the ride-hailing market's GTV is projected to grow at a CAGR of 19.5%. As the largest segment in China's car passenger market, taxis accounted for 54.2% of GTV in 2023 and are expected to maintain a significant 39.4% share by 2028. Ride-hailing and ride-sharing are projected to account for 52.2% and 8.4% of the market by GTV, respectively, by 2028. **4\. Personal Plan** 1\. From a performance perspective, Didi Chuxing's growth has been limited in recent years, with fluctuations, but it still ranks second in China's ride-sharing industry. 2\. The sponsors are CICC, Haitong, and Nomura. CICC and Haitong have decent track records, especially Haitong, while Nomura is participating in a Hong Kong IPO sponsorship for the first time. 3\. Didi Chuxing's issuance size is relatively small, with an estimated float of around HKD 230 million at the mid-point, which is not particularly large compared to recent IPOs. 4\. Recent IPO sentiment has improved, and whether a stock performs well has little to do with fundamentals—speculation plays a big role. Personally, I suggest trying a small position if you're interested in playing the field. **In summary, after analyzing multiple angles, Didi Chuxing's fundamentals may be mediocre, but its float size makes it suitable for speculative plays. If you're inclined, you can take a small speculative position.** **This article is a personal analysis of the IPO and reflects my thoughts within my capabilities. I welcome criticism and corrections. Additionally, this article does not constitute investment advice—readers should think independently.** ### Related Stocks - [02559.HK](https://longbridge.com/en/quote/02559.HK.md)