JPMorgan initiated coverage of DiDi Global Inc with an Overweight rating and a $10 price target, calling the Chinese ride-hailing company a high-potential long-term earnings compounder.
DiDi looks to expand profitability through fleet electrification, lower consumer subsidies and eventual robotaxi adoption.
“DiDi offers a powerful compounding engine from its China domestic mobility operations, supported by multiple structural levers to improve margins and unlock long-term value,” analysts at JPMorgan said.
The brokerage said DiDi’s domestic mobility business, which had a margin of about 3% on gross transaction value (GTV) in 2024, could see margins rise to 10% by 2035 as costs fall and economics shift in the company’s favor.
JPMorgan said there are three main levers for improvement, of which the first is full transition of the fleet to electric vehicles, which could add roughly 3 percentage points to margins.
A pullback in consumer subsidies, now at 11% of GTV, that could contribute another 3 points.
Finally the rollout of robotaxis, which the JPM analysts said could lift margins by as much as 40 percentage points in the long run by reducing driver costs.
In its blue-sky scenario, JPMorgan projected DiDi’s 2035 profits could be 12 times higher than in 2025, with margins on GTV approaching 20% if autonomous vehicles account for 30% of its fleet.
“We initiate coverage of DiDi with an Overweight rating, for its rare combination of durable growth and structural profitability expansion”
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