The Cyberspace Administration of China (CAC) on Friday informed executives of domestic ride-hailing giant Didi Chuxing that its proposals to ensure security and prevent data leaks had fallen short of rectification requirements, according to sources cited by Bloomberg. Didi Chuxing and its sponsor agencies have stopped preparations for a public listing in Hong Kong through introduction, scheduled for sometime this summer.
Meanwhile, Didi Chuxing is still working hard to complete its fourth quarter earnings report, which is required by the listing prospectus. In July 2021, some apps owned by the company were removed from domestic app stores, and have not been recovered yet, although apps and WeChat programs that have already been installed on a device are still functional. According to the report, the CAC may announce results of its review of the platform during the next few weeks.
In June 2021, the company carried out a $4.4 billion U.S. public listing. Just days later, Chinese regulators launched a security review of the firm and removed its services from domestic app stores. Its share price has dropped by about 78% since the IPO.
Subsequently, on December 3, 2021, Didi Chuxing announced that, after careful study, the company would start the delisting process from the NYSE, planning instead to complete an IPO in Hong Kong. The company’s board of directors supported the decision, authorizing the company to start preparations for the Hong Kong listing. It plans to entrust Goldman Sachs, CMB International and CCB International to arrange the transaction.
Companies generally require between six and 12 months to complete an IPO in Hong Kong, of which the preparation of audit and listing documents takes about four months. After the formal submission of a listing application form, the stage of answering further questions usually takes three months. Lastly, it takes four to six weeks to attract and accept investor participation.