China's Didi bounces back, posts first quarterly profit since 2021
Didi Global, China's top ride-hailing firm, has registered its first quarterly profit since 2021, indicating a recovery from regulatory hurdles. For the quarter ending September, the company recorded a net income attributable to shareholders of 107 million yuan (Rs. 124.4 crore). This is a major improvement from the 2 billion yuan (Rs. 2,325.8 crore) loss in the corresponding quarter of the previous year. During the same period, revenue surged by 25% to 51.4 billion yuan (Rs. 58,694.7 crore).
Plans for share repurchase and business growth
The company, supported by Alibaba, Tencent, and SoftBank Group, unveiled plans to buy back up to $1 billion (Rs. 8,331.3 crore) in shares over the next two years, and increase marketing efforts to promote further business expansion. Although Didi did not disclose its quarterly results in 2022, it reported an annual net loss of 23.78 billion yuan (Rs. 27,655 crore).
Overcoming regulatory troubles
In 2021, Didi encountered regulatory scrutiny from China's cyberspace watchdog for pursuing a US stock listing without permission. This led to a probe that prevented the company from registering new users and resulted in the removal of numerous apps from major app stores. Didi was delisted from the New York Stock Exchange in 2021 and fined $1.2 billion (nearly Rs. 10,000 crore) in July 2022 for data-security violations but started recovering in January after being permitted to reinstate its apps.
Streamlining business operations and future plans
To concentrate on its primary ride-hailing services, Didi has taken measures to streamline its business operations. In August, the company declared it would sell its electric vehicle division to Chinese EV start-up Xpeng for up to $744 million. "In the future, we expect to continue expanding our core businesses while enhancing our product and service capabilities in order to provide better services to our consumers, drivers, and ecosystem partners," stated Didi Chairman and CEO Wei Cheng.
