China's Cyber Security Review Office onJuly 2 initiated an investigation into the country's ride-hailing giant DiDiChuxing on national data security, national security and public interestconcerns.

The cybersecurity review can be wrapped upwithin 45 working days under normal conditions, or be extended by 15 workingdays when it comes to sophisticated scenarios.

It may take another 45 working days orlonger to conduct an examination on projects entering the special reviewprocess. New user registration applications will not be accepted until thereview comes to an end to avert further risks, the office said.

Didi said it would cooperate withgovernment organs, conduct an all-around examination of cybersecurity risks andcontinue to improve its network security system and technical capabilities.

Didi Global will be added to S&P DowJones' global equity indexes on July 12 following the U.S. stock market debutof the Chinese ride-hailing company.

The shares of the Beijing-based companyjumped nearly 16 percent on July 1, a day after its debut, the biggest U.S.listing by a Chinese company since 2014. But the company's shares lost roughly10 percent of its value in pre-market trading.

Didinets $4.4b from NY float, but faces challenges

American depositary shares of Chineseride-hailing giant Didi Global Inc ended their first trading day on the NewYork Stock Exchange 1 percent higher at $14.14 on July 1, giving the company amarket value of about $68 billion, but also sparking talk of a tough businessenvironment ahead.

The Beijing-based company raised $4.4billion from its IPO of about 317 million ADS, or about 10 percent more thanoriginally planned, according to an updated filing. That made it the second-largestUS listing by a Chinese company on record, after Alibaba Group Holding Ltd.

But experts said the listing size is lowerthan what some people had expected, suggesting the company may have faced somechallenges, and might even encounter regulatory risks, going forward.

Didi's IPO followed a strong revenueperformance in the first quarter of this year, with ride-hailing servicesresuming their operations against a background of a receding COVID-19 pandemic.

Its revenue more than doubled to 42.2 billionyuan ($6.53 billion) in the first three months of this year from 20.5 billionyuan a year earlier. More importantly, it reported a profit of $95 million inthe period, marking progress for Didi which had historically been unprofitable.

Didi, which was founded in 2012, said inits IPO prospectus that it has 493 million annual active riders, and 41 millionaverage daily transactions. It began expanding internationally in 2018, and thecompany now operates in 14 countries outside of China, including Brazil andMexico.

Didi said it will invest approximately 30percent of the proceeds raised from the IPO to boost its technologicalcapabilities, including shared mobility, electric vehicles and autonomousdriving technologies.

About another 30 percent will be used togrow its presence in international markets, and 20 percent in introducing newproducts and expanding existing offerings for consumers, Didi's prospectussaid.

Cheng Wei, founder and CEO of Didi, said in2020 that in the next 10 years, Didi will optimize software and hardwaresimultaneously and rapidly iterate products and services, with the aim ofachieving fully autonomous driving by 2030.

Gu Dasong, executive director oftransportation and development research center at Southeast University, said itwill still take time for Didi to further improve its profitability whilemaintaining steady growth; and in the international market, it has to competewith the likes of Uber.

Didi is the latest big-ticket Chinesecorporate to have listed in the US stock market bucking the recent trend ofsome US-listed Chinese firms delisting to return home to list on domesticbourses instead.

This year, like Didi, 28 other Chinesefirms have made US IPOs, and raised $7.6 billion in the first six months,according to Refinitiv data.

Didipledges cooperation in security investigation

Chinese ride-hailing giant Didi Global Incsaid on July 2 it will actively cooperate with relevant government departmentsin a cyber security investigation and comprehensively sort out network securityrisks.

The comments came after the Office of theCentral Cyberspace Affairs Commission said it has launched a probe into Didi toprotect national security and public interest in accordance with the nation'slaws.

The Cyberspace Administration of China(CAC) said on July 4 it has notified app stores to remove Chinese ride-hailingplatform Didi Chuxing due to "serious" violations of laws andregulations regarding the collection and use of personal information.

The CAC asked the Beijing-based company tostrictly follow legal requirements and seriously rectify existing problems toeffectively protect the users' information in a notice.

The Chinese internet watchdog initiated acybersecurity review into Didi on July 2 and blocked new user registration. Thecompany's shares edged down 5 percent following the announcement.

During the investigation period, Didi's apphas stopped new user registration, the office said. Didi said under thesupervision and guidance of relevant departments, it will comprehensively sortout and investigate network security risks, and continue to improve the networksecurity system and technical capabilities.

The probe came shortly after Didi raised$4.4 billion in its IPO on the New York Stock Exchange earlier this week.

China has stepped up inspections on appsthat were widely used in the country in response to netizens' concerns aboutexcessive personal information collection. The CAC in May released two batchesof lists, containing a total of 138 mobile applications for rectification, mostof which were accused of collecting personal information irrelevant to theirservices. However, Didi was not included in the May lists.

Moreinternet firms involved in cybersecurity investigation

Three more applications were placed under acybersecurity investigation on July 5 after Chinese ride-hailing giant DidiGlobal faced the same probe.

The Cyberspace Administration of China, thecountry's top internet watchdog, announced on July 5 that it has launched acybersecurity probe into Boss Zhipin, a mobile recruitment app, andtruck-hailing apps Yunmanman and Huochebang in accordance with laws andregulations to prevent data security risks, safeguard State security andprotect public interests.

Boss Zhipin, which is operated by Chinesetech company Kanzhun, said it will actively cooperate with government agenciesin the security investigation, with comprehensive screening of security risks.

"We'll continuously enhance ourcybersecurity awareness and effectively implement our enterprise's responsibilitiesand obligations," the company said.

Full Truck Alliance Co, which runsYunmanman and Huochebang, gave a similar response to the probe on July 5,saying it will conduct a thorough security review and further improve itscybersecurity system and technical capabilities during the investigation periodto protect national security and public interests.

During the investigation, the three appsmust halt the registration of new users to prevent expansion of security risks,the administration said.

Zuo Xiaodong, vice-president of the ChinaInformation Security Research Institute, said the security investigations ofthese enterprises reflect the country's measures to strengthen the preventionof cybersecurity and data security risks.

"The moves showed China has attachedgreat importance to security issues. When finding security risks or potentialproblems, it will take action as quickly as it can, because cybersecurity meansnational security," he said.

Zhao Zhanling, a lawyer from Beijing YunjiaLaw Firm, said the probes are an implementation of the Cybersecurity Law andthe National Security Law as well as a regulation on cybersecurityinvestigation.

After the Data Security Law, which waspassed last month, takes effect in September, "such probes may beconducted in a regular manner with the country's increasingly high attention tocybersecurity," Zhao added.