China’s Didi Global reports its first quarterly profit since 2021

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China’s largest ride-hailing company, Didi Global, backed by giants including Alibaba, Tencent, and SoftBank, reported its first Q1 profit on Monday since 2021. The report shows the company could bounce back from strict regulatory issues amid a recovery phase in China’s mobility services.

In the three months ended September 30, Didi Global reported net income attributable to shareholders of $14.66 million (107 million yuan), compared to a loss of 2 billion yuan a year ago. Revenue in the quarter went up about 25% to hit 51.40 billion yuan.

During the Monday announcement, the company also announced plans to purchase up to $1 billion in shares over the next 24 months and committed to a marketing boost to supercharge growth.

The regulatory troubles

In 2021, the company was targeted by China’s cyberspace watchdog for going after a US stock listing without approval. What followed was a regulatory investigation into the company that barred it from signing up new users and led to dozens of its apps receiving bans in major app stores.

By 2022, the company had been delisted from the New York Stock Exchange and was fined an eye-watering $1.2 billion in July 2022 over data security incidents. It began its ascent out of that predicament, a process that kicked off in earnest this January when it was allowed to restore its apps.

What happens going forward?

During the tumultuous period, the company took steps to streamline business operations and hone in on its core ride-hailing services.

In August, the company announced it would sell its electric vehicle business to Chinese EV startup Xpeng for a reported $744 million.

Chairman and CEO Chei Weng said the company expects to continue expanding its core businesses while improving its product and service capabilities to “provide better services to our consumers, drivers, and ecosystem partners.”

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