China's Didi Global Reports Q2 Profit Flip

Didi Global, the leading ride-hailing company in China, has posted a net profit of 1.4 billion yuan ($196.24 million) for the second quarter, marking a dramatic shift from a loss of 300 million yuan in the same period last year. This profit rebound comes as the company recovers from a challenging period marked by regulatory issues.

The company’s revenue for the quarter climbed by 4.1% to 50.9 billion yuan. This improvement follows intense scrutiny from China’s cyberspace regulator starting in 2021, when Didi’s attempt to launch an IPO in the U.S. without proper authorization triggered an investigation. As a result, the company was barred from adding new users, and its apps were removed from major app stores.

In 2022, Didi was hit with a $1.2 billion fine for data privacy breaches, but it was permitted to reinstate its apps early the following year.

Jean Liu, a co-founder of Didi, resigned earlier this year from her roles as president and board director but remains involved as a "permanent partner" and continues to serve as chief people officer.

Didi, often seen as China’s equivalent to Uber, primarily earns from its domestic market but also holds significant positions in Brazil and Mexico through key ride-hailing services.

In June, the total number of ride-hailing trips soared to 971 million, reflecting a 27.3% year-over-year increase, according to data from the Ministry of Transport.

The company also divested its electric vehicle (EV) development unit to Xpeng for $744 million, receiving a 3.25% ownership stake in Xpeng as part of the deal.

($1 = 7.1340 Chinese yuan)