DiDi Global (NYSE:DIDI) could easily fall quite significantly to the value of just its non-China operations, plus its net cash (as long as that cash is not in China). This is because Chinese regulators have placed the company under dire restrictions. If that happens, I estimate that DIDI stock would be worth no more than about $2.71 per share, or 33% of its present price (as of Aug. 25).

The reason for this is that no new users can sign up on DiDi’s ride-hailing service app in China, and it is potentially possible that all operations in China might be curtailed. In that case, the only revenue left would be its international operations, which are about 2% of its total sales.

Note that I am also not including its “other initiatives”, such as bike-hailing services. I think much of that revenue is likely in China as well. Therefore, most investors should not consider investing in DIDI stock at least until it produces its Q2 earnings release and provides an outlook for its revenue.

Where Things Seem To Stand

From what I can deduce, DiDi is no longer growing. It can only make revenue from its existing user base in China. It can’t sign up new users or drivers. This will likely lead to massive losses. If that is the case, the company is going to have to make it clear in its risks assessments disclosures.

However, in Q1 the company made $123 million in revenue from its international (non-China-based) operations in 17 countries. This can be seen on page 20 of its latest prospectus. So annually that works out to $492 million. Let’s call it $500 million for modeling purposes. If we put a 10 times multiple on this, that division is worth $5 billion.

Compared to the $39.7 billion market value of DIDI stock, this represents just 12.6% of its present market value. However, we can add in some of the cash that it raised in its IPO at the end of June.

The latest prospectus indicates on page 22 that DiDi had $3.582 billion in cash, plus $80 million in restricted cash as of Mar. 31. After adding in $3.658 billion in short-term investments and deducting $4.072 billion in total liabilities, its net cash was $3.248 billion.

DiDi raised $4.332 billion from selling American depositary shares at $14 per share in its IPO on June 30. So now it has about $7.58 billion in cash and investments. This could change based on options that are exercised and depending on whether the broker-dealers bought shares for their own accounts. So let’s call it $8 billion, just to round things out, and to give the company the benefit of the doubt. Keep in mind that we assume that its mezzanine debt will continue to be serviced or else convert into equity.

What DIDI Stock Is Likely Worth

Now we can add in the $5 billion value for its international operations plus $8 billion in net cash. That means DIDI Global has a worst-case value of $13 billion. That represents just 32.7%, or just under a third of its present market value of $39.7 billion.

Therefore, this means that the underlying value of the company is just $2.71, or 32.7% of its present price of $8.25 on Aug. 25. Keep in mind that I’m assuming that the company will be forced to shut down in China and that its international operations will be worth 10 times sales.

In reality, the whole process of appeasing regulators and keeping its operations going in China could be very messy. The Wall Street Journal even reported that the company was considering refunding investors in a go-private transaction. DiDi offered a short rebuttal to this claim.

What to Do With DIDI Stock

If you bought the stock in the IPO or shortly thereafter and are still holding on, there is unfortunately not much hope for the company. The longer it takes to come out with its Q2 earnings statement and revises its risks disclosures, the higher the risk.

Most investors in this situation will likely want to either sell out or buy put options to act as insurance on their investment. Value investors will begin looking at this situation once the stock falls to below its underlying value and its cash per share. My cursory analysis is that DIDI stock is not worth more than $2.71 or one-third of its present price.

On the date of publication, Mark R. Hake did not hold a position in any security mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.