'Chinese Uber' Didi Chuxing Ahead of IPO, Aiming for Valuation up to 75 Trillion Won

Likely to Be the Biggest US Stock Market IPO This Year
Risks Including Inflation and Regulatory Pressure Also Exist

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] China’s largest ride-sharing company Didi Chuxing is reportedly pursuing an initial public offering (IPO) with a target valuation of up to $67 billion (approximately 75 trillion KRW). This has led to expectations that Didi Chuxing will be the biggest IPO on the U.S. stock market this year.

According to Bloomberg and The Wall Street Journal (WSJ) on the 24th (local time), Didi Chuxing recently announced in its filing that it is conducting an IPO aiming for a valuation between $62 billion and $67 billion.

Didi Chuxing also stated that it plans to price its American Depositary Shares (ADS) at $13 to $14 and sell 288 million shares in this IPO.

The company expects to raise approximately $3.9 billion through this offering.

Didi Chuxing said it will use the funds raised to develop new technologies and expand its business beyond China.

Given that the Chinese market overwhelmingly accounts for the majority of its total revenue, this indicates the company’s intention to accelerate overseas expansion for sustainable growth.

Previously, after Uber sold its China business to Didi Chuxing in 2016 and withdrew from the Chinese market, Didi Chuxing gained a monopolistic position in China’s ride-sharing market.

However, the $67 billion valuation target is lower than the $100 billion estimate reported by Bloomberg in April.

With growing concerns over inflation and increasing uncertainty in financial markets, investors have shifted their focus from high-risk growth stocks to value stocks that offer more stable returns, impacting the IPO market as well. Analysts suggest that the lowered valuation outlook for Didi Chuxing, a representative growth stock in the ride-sharing sector, reflects this trend.

Additionally, intensified pressure from Chinese regulatory authorities is another risk factor for Didi Chuxing.

The Chinese government is currently conducting an antitrust investigation into Didi Chuxing regarding the opacity of its pricing policies and whether the company has engaged in unfair competitive practices against other competitors.

According to major foreign media, a source said the company believes that the pricing policy issues under investigation by the government are minor and that the IPO plans are unlikely to be disrupted.

This content was produced with the assistance of AI translation services.