How to buy Didi Chuxing stock from the US | finder.com

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How to buy Didi Chuxing stock in the US

There are three ways for American investors to nab a slice of this Chinese listing.

Our pick to buy Didi Chuxing stock: Interactive Brokers

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Chinese ride-hailing platform Didi Chuxing is considering an IPO — but no word yet whether it plans to premiere in the US or on the Hong Kong Stock Exchange. Either way, here’s how US investors can prepare.

What we know about the Didi Chuxing IPO

Beijing-headquartered Didi Chuxing is considering a multibillion-dollar IPO. Initial reports said the company was set to go live on the Hong Kong Stock Exchange, but recent news suggests the ride-hailing platform may be considering a New York premiere, says Reuters.

In further support of a potential US IPO is the debt deal Didi Chuxing recently entered into with JPMorgan Chase, Morgan Stanley and Goldman Sachs, among others. The deal will help the ride-hailing platform to raise $1.5 billion ahead of its listing, reports Bloomberg.

Didi Chuxing is among the most popular ride-hailing platforms in China, backed by the likes of Alibaba, Softbank and Tencent. The IPO is expected to launch in the first half of 2021, but no official date has been confirmed. In 2017, the company was worth $56 billion and it’s tentatively targeting a $100 billion valuation for its IPO launch.

It’s unclear how the listing will proceed, but reports suggest Didi Chuxing hasn’t ruled anything out. It appears to be interested in both Chinese and US markets and may even go public via a special-purpose acquisition company (SPAC). No official decision has been announced, but we’ll continue to update this page as information is released.

The good news is that US investors will have the opportunity to invest regardless of which exchange Didi Chuxing selects for its listing — though perhaps not as directly as they’d like. Should Didi Chuxing go public on a US exchange, investors need to look no further than a self-directed brokerage account with a US platform.

But if the stock launches on a Chinese exchange, American investors will need to get a little more creative to add this company’s stock to their portfolio.

How to invest in Didi Chuxing from the US

Although Didi Chuxing’s stock may only be available on Chinese exchanges, there are three ways American investors can invest in the company.

1. Use an international brokerage account

Most US brokerages only offer access to major US stock exchanges, like the NYSE and Nasdaq. But there are a few brokers equipped to facilitate international trade, like Charles Schwab, Fidelity and Interactive Brokers.

Before you sign up, review your broker’s commissions, exchange rates and potential taxes. Most important of all: make sure the platform you’re interested in offers access to the international exchange you want to trade on. This information can typically be found on a broker’s website.

Our pick: Interactive Brokers

Interactive Brokers offers an impressive range of tools and low fees for active or professional investors.

  • Create watchlists, set alerts and follow news on the Trader Workstation platform
  • Choose from IBKR Pro or IBKR Lite depending on your investing style
  • All users older than 21 must meet a $20,000 liquid net worth requirement for a cash account
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Available asset types Stocks, Bonds, Options, Mutual funds, ETFs
Stock trade fee $0
Option trade fee $0 + $0.65/contract
Annual fee 0%

2. Buy ETFs

You can indirectly add Didi Chuxing stock to your portfolio by investing in exchange-traded funds (ETFs) that track the stock. Once Didi Chuxing’s stock goes live, look for ETFs that add its shares to their overall holdings. By purchasing these ETFs, you’ll gain indirect exposure to Didi Chuxing’s stock.

The following ETFs specialize in Chinese stocks, so keep an eye on them once Didi Chuxing’s stock is released to see if they add its shares to their holdings:

  • iShares MSCI China ETF
  • Renaissance Capital’s International IPO ETF
  • SPDR S&P China ETF

You can buy ETFs from a domestic brokerage account.

3. Wait for an ADR

Another way to gain portfolio exposure to Didi Chuxing’s stock is to wait for the company’s American Depository Receipt (ADR) to reach the US. ADRs are certificates representing shares of foreign stock. Like ETFs, they can be purchased from a domestic brokerage account.

There’s no guarantee that Didi Chuxing will release an ADR, so investors will need to keep their ears open for news of the company’s plans for US investors.

Didi Chuxing’s balance sheet

Didi Chuxing was founded in 2012 and is headquartered in Beijing, China. It operates as a mobile transportation platform, offering a variety of services that include ride-hailing, ride-sharing, bike-sharing and more. It serves over 10 billion passengers annually across China, Japan, Australia, Russia and Latin America.

In 2016, Didi acquired Uber China, partnered with TripAdvisor and broke records by offering over 11 million private-car rides and 14 million orders in a single day.

While we’ve yet to see a public statement from the company on the matter, sources suggest Didi generated a healthy profit in Q2 2020. As more information is released ahead of its IPO, investors will have the opportunity to learn more about the company’s balance sheet.

How are similar companies performing?

While no guarantee of performance, here’s how some of Didi Chuxing’s competitors have fared:

Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

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