Executive Summary / Key Takeaways

• DiDi Global Inc. has achieved a significant financial turnaround, reporting a profit of RMB1.3 billion (US$174.6 million) in 2024, following losses in previous years, driven by robust growth in its China Mobility and International segments.
• The company's core investment thesis is underpinned by its dominant ride-hailing network in China, accelerating international expansion, and strategic investments in electric mobility and autonomous driving, which are poised to unlock multi-year margin expansion.
• Technological differentiation, particularly in AI-powered supply-demand prediction, matching, and autonomous driving software, forms a critical competitive moat, enhancing operational efficiency and safety across its diverse service offerings.
• Despite past regulatory challenges in China, DiDi has demonstrated compliance and resumed new user registrations, while ongoing competitive pressures in international markets and the inherent risks of its VIE structure remain key factors for investors to monitor.
• The anticipated commercial rollout of autonomous driving by 2025 is a strong catalyst, expected to significantly improve safety, vehicle utilization, and reduce mobility costs, thereby widening DiDi's addressable market and long-term profitability.

Reinventing Urban Mobility: DiDi's Strategic Foundation and Technological Edge

DiDi Global Inc. has evolved from its 2012 origins as an online taxi service in China into a leading global mobility technology platform. The company's overarching strategy centers on building a comprehensive ecosystem that addresses diverse transportation needs, encompassing shared mobility, energy and vehicle services, electric mobility, and autonomous driving. This integrated approach, honed through strategic acquisitions like Kuaidi in 2015 and Uber China in 2016, has solidified its foundational strength in the competitive mobility landscape.

The global mobility sector is characterized by intense competition, rapid technological advancements, and evolving regulatory frameworks. DiDi operates within this dynamic environment, competing directly with global giants like Uber Technologies Inc. and regional players such as Grab Holdings Inc. (GRAB), as well as domestic rivals and traditional transportation services. DiDi's differentiated approach, particularly its deep localization and comprehensive service offerings, provides a competitive edge, especially in its home market.

A cornerstone of DiDi's strategy and competitive moat lies in its advanced technological differentiation. The company leverages proprietary AI algorithms and deep learning models for crucial operational functions. These include sophisticated supply-demand prediction, which dynamically adjusts incentives and provides driver recommendations to optimize resource deployment, and efficient driver-rider matching, which considers factors like distance, wait times, and preferences to reduce pickup times for customers and idle driving for drivers. This technological prowess directly translates into improved efficiency and enhanced monetization potential across its offerings.

DiDi is also at the forefront of electric mobility and autonomous driving innovation. Recognizing electric vehicles as a natural fit for shared mobility due to lower operating and maintenance costs, the company has built an extensive EV charging network covering over 240 cities in China. As of December 31, 2024, approximately 5.10 million electric vehicles were registered on its platform, accounting for about 68% of monthly ride-hailing mileage. This commitment to green mobility has demonstrably reduced greenhouse gas emissions by an equivalent of approximately 7.94 million tons of carbon dioxide. The strategic partnership with XPeng Inc. (XPEV) in August 2023 for smart electric vehicles and the recent Letter of Intent with UNEX EV to deploy battery-swapping vehicles in Mexico further underscore its dedication to this transformative trend.

In autonomous driving, DiDi is developing proprietary Level 4 full-stack software and custom hardware. This technology, powered by a vast repository of traffic data from its shared mobility fleet, enables key features such as localization, perception, prediction, planning, and vehicle control. The company launched fully driverless testing in Guangzhou and Beijing in 2024, with a stated goal of commercial rollout by 2025. This initiative is expected to meaningfully improve safety, significantly reduce accident risks, and enhance vehicle utilization, allowing cars to operate throughout the day and further reducing the cost of mobility. For investors, these technological advancements are not merely R&D expenditures but strategic investments that promise to widen DiDi's addressable market, reduce long-term operational costs, and solidify its competitive position against rivals globally.

Financial Momentum and Strategic Expansion

DiDi Global has demonstrated a significant financial turnaround, transitioning from substantial losses to profitability. For the year ended December 31, 2024, the company reported a profit of RMB1.3 billion (US$174.6 million), a notable improvement from losses of RMB4.8 billion in 2023 and RMB11.7 billion in 2022. This shift is further highlighted by the Adjusted EBITDA, a non-IFRS measure, which moved from a loss of RMB8.5 billion in 2022 to gains of RMB1.7 billion in 2023 and RMB7.4 billion (US$1.0 billion) in 2024, signaling improved operating performance. Similarly, Adjusted EBITA turned from losses of RMB12.6 billion in 2022 and RMB2.1 billion in 2023 to a gain of RMB4.3 billion (US$0.6 billion) in 2024.

Total revenues increased by 7.50% to RMB206.8 billion (US$28.3 billion) in 2024 from RMB192.4 billion in 2023. This growth was primarily driven by the China Mobility segment, which saw revenues increase by 6.10% to RMB185.7 billion (US$25.4 billion) in 2024. The segment's Gross Transaction Value (GTV) also grew by 11.30% to RMB301.4 billion (US$41.3 billion), indicating strong user engagement and transaction volume. The International segment exhibited even more robust growth, with revenues surging by 40.80% to RMB11.0 billion (US$1.5 billion) in 2024, supported by a 29.20% increase in GTV to RMB91.3 billion (US$12.5 billion). The Other Initiatives segment, encompassing bike and e-bike sharing, energy and vehicle services, and intra-city freight, also contributed to revenue growth, increasing by 5.40% to RMB10.0 billion (US$1.4 billion).

The company's liquidity position remains solid, with cash and cash equivalents and treasury investments totaling RMB53.6 billion (US$7.3 billion) as of December 31, 2024. While net cash flows were used in financing and investing activities in 2024, these were partially offset by strong net cash flows generated from operating activities, amounting to RMB6.5 billion (US$0.9 billion). DiDi's board has authorized significant share repurchase programs, including a US$1 billion program in November 2023 and another US$2 billion program in March 2025, reflecting confidence in its financial health and a commitment to shareholder value.

DiDi's competitive positioning is multifaceted. In China, its extensive network effects and localized operational expertise provide a significant advantage over global competitors. However, in international markets, it faces intense rivalry. For instance, in Brazil, its food delivery unit, 99Food, is engaged in a legal dispute with Meituan (MPNGF)'s Keeta over alleged unfair competition and trademark infringement, highlighting the aggressive nature of overseas expansion. While DiDi's diversified service offerings provide resilience, competitors like Uber (UBER) often demonstrate faster innovation in certain app features and broader global penetration. Lyft (LYFT), primarily focused on North America, offers a more streamlined operational model, which can lead to more consistent profitability improvements in its core market. DiDi's ability to adapt its technology and business model to diverse local conditions, as seen in its success in Mexico's food delivery market, remains a key differentiator.

Risks and Forward Outlook

Despite the positive financial trajectory, DiDi faces several pertinent risks. Regulatory scrutiny, particularly in China, remains a significant concern. The company previously incurred an administrative fine of RMB8.26 billion in 2022 for violations of cybersecurity and data privacy laws, leading to the delisting of its ADSs from the NYSE. While new user registrations have resumed, uncertainties persist regarding the interpretation and implementation of evolving PRC laws, which could necessitate further operational adjustments. The Variable Interest Entity (VIE) structure, crucial for operating in restricted sectors in China, also carries inherent risks due to potential future changes in PRC foreign investment laws.

Labor costs and regulations in China pose another challenge. New guidelines, effective November 2023, require platforms to set limits on drivers' working hours and order acceptance, potentially increasing operational costs and impacting driver supply. The ongoing classification debate of drivers as independent contractors versus employees globally could fundamentally alter DiDi's business model and significantly increase labor expenses. Furthermore, international expansion exposes DiDi to geopolitical tensions, currency fluctuations, and competition from locally entrenched players, as evidenced by the ongoing legal battles in Brazil.

Looking ahead, DiDi's outlook is characterized by continued strategic expansion and technological advancement. Management anticipates that new initiatives, while potentially unprofitable in the near term, will contribute to future revenue growth. The company's sustained investment in autonomous driving, with a commercial rollout expected by 2025, is a powerful catalyst. This technology promises not only enhanced safety and efficiency but also a significant reduction in mobility costs, expanding the total addressable market. The ongoing share repurchase programs signal management's confidence in the company's intrinsic value and future prospects.

Conclusion

DiDi Global Inc. stands at a pivotal juncture, having successfully navigated a challenging regulatory environment to achieve a return to profitability in 2024. The company's core investment thesis is firmly rooted in its robust China Mobility segment, rapidly expanding International operations, and strategic, technologically driven investments in electric mobility and autonomous driving. Its proprietary AI-powered platform and commitment to innovation provide a strong competitive foundation, enabling efficient operations and tailored service offerings across diverse markets.

While regulatory uncertainties in China and intense international competition present ongoing risks, DiDi's demonstrated adaptability and focus on long-term growth initiatives, particularly autonomous driving, position it for multi-year margin expansion. The company's solid liquidity and proactive share repurchase programs underscore a confident management outlook. For discerning investors, DiDi Global represents a compelling opportunity in the evolving global mobility sector, driven by its technological leadership and strategic vision for the future of transportation.