Chinese ride-sharing giant Didi Chuxing Technology Co. is planning a Hong Kong IPO for this year while targeting a valuation in the range of approximately $60 to $80 billion.
Currently, Didi is in discussions with investment banks including Goldman Sachs and JPMorgan Chase, reported Chinese media outlet LatePost today.
While the company has accumulated billions in fundraising since its founding in 2012, Didi has watched its valuation slip in the last few years.
In 2017, Didi’s valued at around $56 billion. Then, one of its drivers was accused of raping and murdering one of its female passengers, an allegation which forced the company to introduce various new safety features.
However, Didi appears to be recovering despite these safety concerns and a global pandemic.
In June, Cheng Wei the founder and chief executive officer of Didi said its ride-sharing orders were back to pre-pandemic levels.
Didi told Reuters in an interview in October that following a year of “cultivating internal strength,” it feels confident it will experience growth in 2021.
Now, Didi will remain focused on Hong Kong rather than the United States for its IPO destination, as trade tensions between Beijing and Washington continue to pick up smoke.
In 2019, American ride-sharing giants Uber (NYSE: UBER) and LYFT (Nasdaq: LYFT) made their trading debuts, raising more than a cumulative $10 billion in their IPO’s. As of 2018, Uber maintained a 15.4% stake in Didi that was worth $7.95 billion. Meanwhile, Didi owns Uber’s Chinese operations.
According to the LatePost, an industry analyst noted that Didi chose Hong Kong due to uncertainties over a new bill aimed to delist Chinese companies that was recently signed into law by U.S. President Donald Trump. If Chinese firms refuse to provide auditing papers, they could find themselves booted off U.S. exchanges.
Late last week, the New York Stock Exchange said it was moving to delist three Chinese state-owned telecommunications companies that support the nation’s military by Jan. 11. That includes China Telecom, (NYSE: CHA), China Mobile Ltd. (NYSE: CHL), and China Unicom (NYSE: CHU).
Didi’s backers include Chinese internet giants Alibaba (NYSE: BABA; HKEX: 09988), Tencent (HKEX: 00700; OTC: TCEHY), and Japan's SoftBank Group Corp. (OTC: SFTBY).