Chinese ride-hailing giant Didi to delist from the US and prepare to go public in Hong Kong

December 3, 2021 11:45 am

Didi, the Chinese ride-hailing behemoth, said on Friday that it will begin delisting from the New York Stock Exchange and plans to list in Hong Kong.

The company announced the decision on Weibo, adding that it was made after thorough consideration.

Didi’s debut on June 30 was the biggest US listing by a Chinese company since Alibaba in 2014. 

However, shortly after its IPO, citing data security concerns, the Cyberspace Administration of China (CAC) launched an investigation into Didi and ordered all app stores in China to remove the app.

As part of the overhaul of the Internet industry, China's regulators have stepped up their scrutiny of data security for tech companies and are considering revising the rules for Chinese companies seeking overseas listings.

Regulators are working on new regulations that would require companies with more than one million customers to undergo a cybersecurity review before listing outside of China. Meanwhile, variable interest entities (VIE) structure, an offshore structure commonly used by Chinese companies to list on foreign stock exchanges, will also be banned.

The US is also strengthening its control over US-listed Chinese stocks. Didi’s announcement comes less than 24 hours after the US Securities and Exchange Commission finalized rules that allow it to delist foreign stocks for failing to meet audit requirements.

As the two sides have tightened their policies, it has become arduous and costly for startups to seek a listing abroad, therefore, listing in Hong Kong has become a compromise choice.

Didi shares have plunged 44% since its IPO, closing at $7.80 on Thursday.