Core Viewpoint - Cathay Securities initiates coverage on Cao Cao Mobility (02643) with a "Buy" rating, highlighting its strong market position and growth potential driven by customized vehicle strategies and cost optimization [1] Group 1: Market Position and Financial Performance - Cao Cao Mobility holds the second-largest market share in China's ride-hailing sector, with shares of 8.8% and 8.5% in core first- and second-tier cities respectively [1] - The company is projected to achieve revenues of 14.657 billion RMB in 2024, with a year-on-year growth rate exceeding 35% for the past two years [1] - The gross margin has improved significantly, achieving a three-year consecutive increase, with profitability expected to reach 809 million RMB in 2024 [1] Group 2: Cost Optimization and Business Model - The company has established a competitive moat centered around a "customized vehicle strategy," reducing total cost of ownership (TCO) to approximately 0.5 RMB per kilometer [2] - As part of the Geely ecosystem, the company benefits from stable low-cost production capacity and a high-density battery swap network, enhancing operational efficiency and risk resilience [2] Group 3: Strategic Upgrades and Future Plans - The company is transitioning from the "N-cube" to the "F-cube" strategy, focusing on fully intelligent customized vehicles, autonomous driving, and automated operations [3] - Plans are in place to launch L4-level Robotaxi customized models by 2026, with a global strategic goal of "100 cities in 10 years, 100 billion" [3]