Didi to Pull US Listing in Favor of Hong Kong

Didi Global, the China-based ride-hailing group, intends to delist in the U.S. and pursue a listing in Hong Kong, The Wall Street Journal reported.

The company board supports that course of action, the report says.

Didi has faced some trouble as of late, PYMNTS writes, with the Chinese state investors putting money into a rival, Cao Cao Mobility.

Didi’s difficulties included a ban on registering new users, while regulators did an investigation into the company’s data security. Regulators have been looking harder at ridesharing companies’ activities, with Didi along with Meituan falling under that scope.

But the situation was different from what it was a few years ago. Then, Didi had been seen as a near-invincible company, with rivals often not doing very well with capital. That all changed when the government began looking into regulatory issues with Didi.

Cao Cao said in September 2021 that the company got $588 million from a group of investors from the eastern city Suzhou, which it planned to use on more expansion and new innovations to make drivers safer.

PYMNTS wrote that Cao Cao had reaped the benefits of the negative reactions to Didi, with many investors looking for a domestic rival to the embattled company.

Read more: Amid Didi’s Regulatory Pressures, China Invests in Rival Mobility Platform

China has been changing its rules on raising overseas investments through making it so companies can’t do an IPO on foreign stock markets with variable interest entities.

This comes after the China Securities Regulatory Commission (CSRC) made it so tech firms couldn’t list on foreign markets as of last August.

The reasoning was sensitive data — with firms that don’t collect data, like pharmaceutical companies, likely being able to receive the green light to list overseas.

In addition, China is making a cross-ministry council to approve public listings in foreign markets.

See also: China to Prohibit Foreign IPOs