The latest news shows that Didi Chuxing, a Chinese online ride-hailing giant, has been wooed by US stock investors.
On Tuesday, June 29, a source familiar with the matter revealed that Didi told investors that it plans to set the issue price for listing in the US at the upper end or perhaps exceeding the target range of $13 to $14.
According to its updated prospectus, Didi is expected to issue 288 million American depositary shares. Didi will raise $4.03 billion with a share price set at $14 a piece. If the underwriters fully exercise their over-allotment option, Didi’s fundraising is expected to reach $4.64 billion, which would represent the second largest IPO of Chinese stocks in the United States behind Alibaba’s 2014 listing.
Some bankers, investors and lawyers have noticed that Didi made clear the issue price three working days after launching the roadshow, which is one of the fastest IPO publicity moves in recent years.
When Didi announced its filing for listing more than two weeks ago, the media speculated that Didi’s valuation might exceed $70 billion.
On June 11, Didi submitted its IPO prospectus to the SEC., under the ticker symbol “DIDI”. Goldman Sachs, Morgan Stanley, JP Morgan Chase and Huaxing Capital are acting as underwriters in the filing. Other underwriters for the IPO include CICC, BOC International, Bank of Communications International, CCB International, CMB International, ICBC International and Guotai Junan International.
In Q1 2021, Didi turned losses into profits. From 2018 to 2020, the firm’s annual net loss were 15 billion yuan, 9.7 billion yuan and 10.6 billion yuan, respectively. However, in the first quarter of this year, Didi’s net profit reached 5.5 billion yuan. In March, Didi split from Orange Heart Optimal, a community group buying business, and collected an equity revenue of 9.1 billion yuan. In terms of equity, Cheng Wei and Liu Qing now hold a total of 8.7%, while SoftBank and Tencent are institutional shareholders.