Didi, the Chinese Ride-Hailing Giant, Makes His Wall Street Debut

Didi, the leading Chinese ride-hailing platform, made its Wall Street debut on Wednesday, ending a year in which ride-hailing and travel companies struggled to overcome intermittent pandemic lockdowns.

Didi began trading at $16.82 a share on the New York Stock Exchange, a 20 percent increase from a price of $14 a share that gave the company a market cap of approximately $67 billion.

The company’s IPO, trading under the ticker DIDI, arrives as Wall Street continues to embrace high-growth tech companies regardless of their ability to make a profit. But due to ongoing tensions between the United States and China, it could be viewed unusually critically by investors.

The US government has placed some Chinese technology companies on lists that limit their ability to do business with the United States or its trading partners. The Trump administration had also threatened to ban other Chinese companies from accessing Wall Street.

The ride-hailing industry has been battered by the pandemic and faces an uncertain recovery as the coronavirus continues to spread and new variants emerge. Countries in Latin America, a region that Didi has focused on for global expansion, continue to experience increasing caseloads, adding uncertainty to the business.

In China, Didis’ rise mirrors that of other tech powerhouses, including ByteDance, TikToks parent and food delivery giant Meituan. But in recent months, Chinese antitrust authorities have begun investigating the country’s major internet companies like never before, and Didis’s dominance in the ride business has come to resemble a potential target on the company’s back.

Shortly after Didi struck a deal in 2016 to acquire Ubers’ operations in China, Chinese market authorities said they were investigating the sale on antitrust grounds. No action was then taken. And even as dozens of companies big and small have joined the ride booking business in China, Didi has remained a leader.

Two separate incidents in 2018 in which Didi drivers raped and murdered female passengers spurred the company to make changes to its service, but did not seriously spoil its appeal to users.

However, as of last year, Chinese regulators began cracking down on what they termed unfair and anti-competitive trade practices in the internet industry. A group of taxi industry wrote the country’s antitrust watchdog in December, which urged the agency to re-examine Didis’ purchase of Uber China. The letter accused Didi of using unfair subsidies to detain passengers and of issuing ride orders to unlicensed drivers and vehicles.

In April, Didi was one of nearly three dozen Chinese internet companies that were brought before regulators and ordered to make sure they comply with anti-monopoly rules and put the interests of the nation first.

Didi promptly issued a statement, which the antitrust regulator published on its website, with the vow to promote the development and prosperity of socialist culture and science and to strictly obey the law.

Didi Dache was founded in Beijing in 2012 and merged with a Chinese rival, Kuaidi Dache, in 2015 to form Didi Chuxing. Although Uber tried to compete in the Chinese market, it eventually sold its Chinese operations to Didi in exchange for a stake in the company.

In an filing for his IPO, Didi said sales fell 8 percent to $21.63 billion last year as a result of the pandemic. Didi lost $1.6 billion last year, although it reported a $30 million profit in the first quarter of this year.

While Didi is dominant in China and operates in 14 other countries, including Australia, Brazil, Mexico and Russia, the valuation is significantly lower than Uber’s $95 billion. Still, it overshadows Lyft, the second-largest company in the United States, which is valued at nearly $20 billion.

Didi said it had the opportunity to continue to grow as it expands its business into new international markets. We aspire to become a truly global technology company, Didis founders Cheng Wei and Jean Liu wrote in a letter enclosed with the application.

Didi was valued at $56 billion in 2017 and his investors include SoftBank of Japan; Mubadala, an Abu Dhabi state fund; Alibaba and Tencent, China’s two main internet goliaths; and Apple, which invested $1 billion in 2016 to show its support for the Chinese market.

Before leaving office this year, President Donald J. Trump banned Americans from investing in companies associated with the Chinese military. But his administration has failed in efforts to curb access to US capital markets for a wider range of Chinese companies.

A slew of Chinese companies have sold shares on US exchanges in recent months, including those in industries such as electric vehicles, which have become entangled in trade tensions between Washington and Beijing. Chinese electric car maker Nio raised $2.6 billion on the New York Stock Exchange in December.