China expands security review beyond Didi, sending shares of 2 US-listed Chinese tech companies plunging

Didi Chuxing's D1 at the launch event in Beijing on November 16, 2020 — Didi's app has been ordered for removal from Chinese platforms.
Xin Yue/Huanqiu.com/VCG via Getty Images

Shares of two Chinese tech companies - Full Truck Alliance and Kanzhun - sank Tuesday following the launch of regulatory review in China.
China's cybersecurity regulator said the reviews are aimed at curbing national security risks.
Didi shares plunged after China ordered the ride-hailing app removed from stores.
See more stories on Insider's business page.

Shares of two Chinese tech companies listed in the US dropped sharply Tuesday after a Chinese regulator put them under a security review days after the country launched a similar action against ride-hailing service Didi.

China's Cybersecurity Review Office will review two truck-hailing apps run by Full Truck Alliance and an online-based recruitment app from Kanzhun "in order to prevent national data security risks, maintain national security, and protect the public interest," according to a translation of Monday's announcement.

Shares of Full Truck Alliance sank 22% on the New York Stock Exchange then trimmed the loss to 19%. Kanzhun's Nasdaq-listed stock dropped 11%. Each company made its trading debut in the US in June.

The regulator on Friday used that same language in launching a data security review of ride-hailing app Didi, a move that has since led to a sharp selloff of the company's shares since their trading debut in the US last week. China has been clamping down on technology companies over issues ranging from security to anti-competitive behavior.

Full Truck Alliance and Kanzhun won't be able to add new users while the Cybersecurity Review Office works on the reviews. The office runs under the Cyberspace Administration of China.

Didi shares on Tuesday sank as much as 25% and fell below their IPO price of $14 after Chinese authorities on Sunday ordered app stores to remove Didi Chuxing from their platforms. The move came as the Cyberspace Administration of China cited violations in the collection and use of personal data by Didi.

Chinese regulators launched the review on Friday. Didi began trading last week on the New York Stock Exchange, marking the largest IPO of a Chinese company since the 2014 debut of e-commerce heavyweight Alibaba.

Full Truck Alliance, which raised $1.6 billion in its IPO, links truckers with companies that need their goods moved. Kanzhun operates recruiting services under the Boss Zhipin mobile app and debuted in a $912 million IPO.

Read the original article on Business Insider