Didi Global Inc., the Chinese ride-hailing giant, has announced its first quarterly profit since the regulatory crackdown by Beijing authorities in 2021. Under the leadership of CEO Cheng Wei, the company reported on Monday a net income of 107 million yuan ($14.7 million) for the third quarter, marking a significant turnaround from its previous financial struggles.
The company's revenue saw a substantial increase of 25% to reach 51.4 billion yuan, indicating a robust recovery from the challenges it faced, including increased regulatory scrutiny and its delisting from the New York Stock Exchange (NYSE). Didi has been actively working towards regaining its footing in the market; it resumed new user registration in January and launched a $1 billion share-buyback program.
Despite stiff competition from rivals like Meituan, Didi has managed to maintain a strong market presence. Currently trading on the pink-sheets market, Didi has achieved a market valuation of $17 billion and enjoyed a 40% surge in its share price since May.
In a strategic move to streamline its operations, Didi sold its electric vehicle development division to Xpeng (NYSE:XPEV) Inc. This decision appears to have paid off as the company's average daily transactions climbed to 31.3 million in the September quarter.
With influential backers such as Tencent Holdings (OTC:TCEHY) Ltd. and Alibaba (NYSE:BABA) Group Holding Ltd., Didi's recent financial success is seen as a positive sign not only for the company but also for the broader Chinese economy. The ride-hailing firm is planning to list in Hong Kong in 2024, signaling confidence in its future growth prospects and potential for further recovery within China's tech sector.
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