Core Viewpoint - Cao Cao Mobility is launching an IPO in Hong Kong, aiming to raise funds for investments in autonomous driving and to repay part of its bank loans [6] Group 1: IPO Details - The company plans to issue a total of 44.18 million shares globally, with 4.42 million shares available for public sale in Hong Kong, accounting for 10% of the total [1] - The offering price is set at HKD 41.94 per share, with an entry fee of approximately HKD 4,236.3 for a board lot of 100 shares [1] - The IPO period runs from today (17th) until this Friday (20th), with the expected listing date on June 25 [1] - Six cornerstone investors have committed to purchasing shares worth nearly USD 952 million, including notable companies such as Mercedes-Benz and others [1] Group 2: Business Performance - Established in 2015, Cao Cao Mobility is a strategic investment of Geely Holding Group in the "new energy vehicle sharing ecosystem" [3] - The business has expanded to cover 136 cities by the end of 2024, with plans to enter 85 new cities [3] - The total Gross Transaction Value (GTV) for 2023 and 2024 is projected to be CNY 12.2 billion and CNY 17 billion, reflecting growth rates of 37.5% and 38.8% respectively compared to previous years [3] - In Q1 of this year, the total GTV reached CNY 4.8 billion, marking a 54.9% increase year-on-year [3] - The number of active vehicles and drivers has increased significantly, with 59,200 active vehicles and 59,100 active drivers expected by October 2024 [3] Group 3: Financial Performance - Despite a reduction in net losses, the company has not yet achieved profitability, with net losses of CNY 2.007 billion, CNY 1.981 billion, and CNY 1.246 billion from 2022 to 2024 [4] - The cumulative loss over the past three years amounts to CNY 5.2 billion, indicating a loss of approximately CNY 2.08 per order for 2024 [4][5]

Core Viewpoint - Caocao Travel is facing significant challenges in its upcoming IPO due to substantial financial losses, high debt levels, compliance issues, and strained relationships with drivers and passengers [3][10]. Financial Performance - Caocao Travel has reported continuous losses over four years, with losses of 3.007 billion RMB, 2.007 billion RMB, 1.981 billion RMB, and 1.246 billion RMB for the years 2021 to 2024, totaling 8.241 billion RMB [3]. - The company's total liabilities have been increasing, reaching 11.283 billion RMB by December 31, 2024, with net current liabilities of 8.146 billion RMB, significantly above industry averages [3][4]. Business Model Challenges - The company heavily relies on aggregation platforms for order acquisition, with orders from these platforms accounting for 49.9%, 73.2%, and 85.4% of Gross Transaction Value (GTV) from 2022 to 2024 [4]. - This dependency undermines Caocao Travel's pricing power and market competitiveness, making it vulnerable to changes in aggregation platform policies [4]. Compliance Issues - Caocao Travel has numerous compliance failures, with a significant number of active vehicles and drivers lacking the necessary transport and driver certificates. In 2022, 15.8% of active vehicles and 18.0% of active drivers were unlicensed [5]. - The company has faced over 3,000 administrative penalties, primarily for operating vehicles without the required transport certificates [6]. Relationship with Drivers and Passengers - There is a growing tension between Caocao Travel and its drivers due to high commission rates and unfair penalties, leading to dissatisfaction among drivers [10]. - Passengers have also expressed dissatisfaction, citing issues such as fare discrepancies and poor service quality, which have eroded trust in the platform [10]. IPO Prospects - Given the financial, operational, and compliance challenges, Caocao Travel's path to a successful IPO in Hong Kong is fraught with difficulties, raising questions about its ability to overcome these obstacles and achieve a turnaround [10].