After Didi Global (NYSE:DIDI) announced that it would delist its stock from the NYSE and move its shares to the Hong Kong Stock Exchange, the outlook remains dreadful.

Given Didi’s circumstance, I do not agree with those who have suggested that the company’s American depositary shares (ADS) may move to the over-the-counter (OTC) market or be redeemed for their IPO price of $14 per share.

I remain convinced, however, that Chinese companies which do not interface with tens of millions of the country’s consumers will not be hurt by the country’s government. Moreover, the Chinese firms that are in sectors favored by the government should, in general, perform very well over the longer term.

Beijing Remains Upset With Didi Global

Multiple signs indicate that the Chinese government is still unhappy with Didi.

First of all, there’s the delisting itself. Only several months after Didi listed on the NYSE, it’s taking its shares off the market.  It’s very difficult for me to believe that the company would implement such a fast reversal if it had not been heavily pressured to do so by Beijing.

Secondly, the government introduced new rules that will hurt the ride-sharing industry. Specifically, it has ordered the sector’s companies to raise the pay of its workers, keep tabs on the number of hours they work, give them more opportunities to earn overtime pay, and provide them with access to “social insurance.”

Since Didi is by far the country’s largest ride-hailing company, these rule changes will probably hurt its performance going forward.

As I’ve explained in past articles, China’s government has few legal restraints when it comes to taking strong steps against companies that have displeased it. Therefore, with Beijing obviously still very upset with Didi, I think that the chances of the government continuing to severely punish the company are extremely high.

Don’t Expect a Move to OTC for DIDI Stock

After DIDI stock is delisted from the NYSE, some have suggested that Didi could redeem its shares for $14 per share. Alternatively, another InvestorPlace columnist, Thomas Niel, recently suggested that after being delisted, the shares could move to the OTC and then rally.

I do not anticipate either of these scenarios playing out. Didi is facing a huge problem because of Beijing’s antipathy towards it. Companies that are in dire situations don’t usually willingly fork over huge amounts of money to shareholders, so I don’t expect Didi to give ADS  holders $14 per share. At most, it could pay ADS holders a very small amount of compensation, like $2-$3 per share.

Moreover, I believe that Beijing is very upset that Didi listed on an American exchange without the government’s permission. I do not think that Didi wishes to further antagonize the country’s rulers. Consequently, I do not expect the company’s shares to continue to be listed anywhere in the U.S. after it leaves the NYSE.

And even if the company’s shares do remain on the OTC, they will likely continue to be undermined by Beijing’s interventions.

Not Every Chinese Sector Is in the Same Boat

As I’ve explained in the past, China’s government seems to be primarily targeting large tech companies that interface with very high numbers of the company’s consumers.

I believe that Beijing’s crackdown on such companies was triggered by anti-government comments  from Alibaba (NYSE:BABA) founder and former-Chief Executive Officer (CEO) Jack Ma. His comments, I think, led the Chinese Communist Party to worry that large tech companies with a great deal of money and the ability to communicate with and influence tens of millions of Chinese consumers could undermine the party’s rule.

As a result, I think that Beijing is primarily targeting those type of tech companies and will continue to do so in the future. That means that Chinese companies in sectors that do not regularly interface with tens of millions of consumers, but are clearly backed by Beijing, will probably not be hurt by regulators.

For example, solar stocks like JinkoSolar (NYSE:JKS) and Daqo New Energy (NYSE:DQ), chipmakers like SMIC, and electric vehicle (EV) makers, including Xpeng  (NYSE:XPEV) and Nio (NYSE:NIO), will almost definitely not be meaningfully damaged by regulations.

Conversely, large consumer-facing companies, including Alibaba, JD.com (NASDAQ:JD), and Didi remain extremely vulnerable to adverse regulations. I believe that investors should sell their stocks.

The Bottom Line on DIDI Stock

My research indicates that investors outside of China may be able to hold onto their Didi shares after they are delisted from the NYSE. But with further crackdowns on Didi from Beijing looming, investors should sell DIDI stock.

 On the date of publication, Larry Ramer held long positions in XPEV and JKS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.