(Yicai) Sept. 3 -- Dida Chuxing’s shares tumbled as investors cashed in on yesterday’s steep runup, which followed in the wake of China’s second-largest ride-hailing company announcing a 51 percent jump in first-half profit.

Dida [HKG: 2559] ended 11.2 percent lower at HKD1.90 (24 US cents) a share in Hong Kong today. The stock soared more than 31 percent yesterday to HKD2.14. But it is still 68 percent below the HKD6 initial offering price of June and has never risen above that level.

Adjusted net profit was CNY130 million (USD18.3 million) in the six months ended June 30, according to the Beijing-based company’s earnings results released on Aug. 30. Revenue rose 2 percent to CNY400 million (USD56.1 million) from a year ago.

Dida specializes in carpooling, differentiating itself from larger market players such as Didi Chuxing, and offers it in 366 Chinese cities, with 17.7 million private car owners making up 17 percent of the firm’s drivers. 

First-half turnover at Dida’s carpooling business was CNY4 billion (USD561.7 million) on 61.7 million orders. The business accounted for 96.3 percent of the firm’s revenue, up from 89 percent in 2021, the report showed.

China's ride-sharing market is steadily recovering, with increasing demand for travel among the public, providing Dida with more market opportunities, Chen Liteng, an analyst at financial news portal 100ec, told Yicai.

It is usual for the share price of internet firms to fluctuate after they go public, Chen said. So long as the business stands the test of time, the market will gradually recognize the value of the shares.

Dida only has one main revenue stream, so it is relatively vulnerable to risks, Chen said, adding that its smart taxi business is still small and needs to be rapidly expanded.

Editors: Shi Yi, Kim Taylor