TMTPOST--Dida Chuxing, China's second-largest ride-hailer after Didi Chuxing, saw its share price tumble 22.5% from the issue price of HK$ 9 to close at HK$4.65 on its first trading day on the Hong Kong Stock Exchange (HKSE).
On Thursday evening, DiDa Chuxing announced its allotment results, with a final offering price of HKD 6 per share, resulting in an IPO market value of HKD 5.96 billion. The closing price was HKD 4.65 on Friday, down 22.5% from the issue price.
China International Capital, Haitong International Securities Group, and Nomura International are the joint sponsors, according to information released by the bourse.
The Beijing-based firm underwent five rounds of financing before its listing. According to the prospectus, prior to the submission, DiDa had about 2.955 billion shares outstanding, implying a valuation of around 9.3 billion yuan based on the last financing round. The valuation of 5.4 billion HKD at Friday closing marks a nearly halved value compared to its pre-IPO assessment of 9.3 billion HKD.
Originally known as DiDa Carpool, the company was established in 2014 as an early player in the carpooling sector.
DiDa Carpool's app was launched on May 1, 2014. By September 2017, it expanded into the taxi industry, transforming into a comprehensive mobile travel platform encompassing both taxis and carpooling. Subsequently rebranded as DiDa, the company was formed by a founding team of five, including Song Zhongjie, a former Google China executive.
According to the prospectus, DiDa's major shareholders, led by Song Zhongjie and his co-founders, collectively hold 34.43% through 5brothers Limited.
Despite its successful IPO, DiDa faces ongoing financial challenges as reflected in its recent operational data. In terms of market share, it lags behind Didi and Hello, two intimidating rivals.
DiDa divides its business into ride-sharing platform services, smart taxi services, and advertising. The company recorded a net profit of 300.4 million yuan (US$ 41.4 million) last year, compared with a net loss of 187.6 million yuan the year before. Revenue jumped 43% to 815.1 million yuan.
Dida plans to use the IPO proceeds to enlarge its user base, strengthen marketing and promotion initiatives, advance technological capabilities, upgrade safety mechanisms, and enhance monetization capabilities, according to its prospectus filed in March.
Other ride-hailing service providers also plan listings to replenish capital amid stiff competition in the Chinese market. Ruqi Mobility, a unit of auto giant GAC Group, filed for a Hong Kong IPO last October. Caocao Chuxing, under Geely Holding Group, followed suit this April. Both have been in the red over the past three years.