Summary of Conference Call Notes on CaoCao (2643.HK) Company Overview - **Company**: CaoCao (2643.HK) - **Industry**: Mobility and Corporate Travel Services Key Points Acquisitions - CaoCao announced the acquisition of two companies: 1. **Geely Business**: A corporate travel management service platform from Geely Holding for a cash consideration of Rmb65 million [2][3] 2. **StarRides**: A high-end mobility service platform from Weixing Technology for a total consideration of Rmb225 million [2][7] Strategic Goals - The acquisitions aim to create a one-stop "mobility + business travel" technology platform catering to both individual and corporate clients, enhancing service offerings from standard to high-end [1][2] - By leveraging StarRides' global network across 12 cities and Geely Business' overseas customer resources, CaoCao is accelerating its international expansion [1] Financial Implications - The acquisition of Geely Business is valued based on an EV/EBITDA multiple of 7.66x on TTM EBITDA of Rmb26 million, with projected profit before tax for 2023 and 2024 at Rmb56.4 million and Rmb30.1 million, respectively [3] - The acquisition of StarRides is based on a median EV/Sales multiple of 1.43x TTM sales of Rmb157.8 million, with projected losses after tax for 2023 and 2024 at Rmb58.41 million and Rmb57.46 million, respectively [7] Market Positioning - The acquisitions are expected to strengthen CaoCao's market competitiveness and ecosystem integration capabilities as part of Geely Holding's smart mobility platform [1] - Targeting corporate customers and high-end users is anticipated to increase overall Average Revenue Per User (ARPU) and margin profile, enhancing customer loyalty and potential for cross-selling [1] Investment Rating - Citi maintains a "Buy" rating with a target price of HK$70, indicating an expected share price return of 131.6% from the current price of HK$30.22 [5] Risks - Key risks identified include: 1. Intense market competition leading to margin pressures due to discounts and incentives [9] 2. Heavy reliance on aggregator platforms for over 80% of order volume, affecting bargaining power [9] 3. Regulatory risks associated with compliance and operational costs [9] 4. Strategic dependence on Geely Group for vehicles and technology, which could impact operations if the relationship changes [9] Conclusion - The strategic acquisitions by CaoCao are positioned to enhance its service offerings and market presence in the mobility and corporate travel sectors, although several risks could impact its financial performance and operational stability.

Group 1 - XPeng Motors announced that the second-generation VLA model will start mass production in Q1 2026, with the 2026 P7+ and G7 models featuring this new technology architecture, which boasts 2250 TOPS of effective computing power [2] - The 2026 XPeng P7+ will be launched simultaneously in 36 countries globally, while the G7 will have a comprehensive range of 1704 kilometers [2] Group 2 - The China Automobile Circulation Association estimates that over 12 million passenger vehicles will benefit from subsidies in 2026, potentially driving new car consumption by nearly 1.5 million units [4] - The new policy for 2026 will relax the registration deadline for old vehicles eligible for subsidies, expanding the consumer base and accelerating the replacement of old vehicles [4] Group 3 - Cao Cao Mobility announced the acquisition of 100% equity in Yao Travel and plans to acquire 100% equity in Geely Business Travel, marking its entry into the business travel service sector [4]

Core Viewpoint - Citigroup's report indicates that Cao Cao Travel (02643) aims to establish a comprehensive travel and business travel technology platform by acquiring StarRides and Geely Business, targeting both individual and corporate clients [1] Group 1: Strategic Acquisitions - The acquisitions of StarRides and Geely Business are intended to enhance Cao Cao Travel's service offerings [1] - The strategy focuses on creating a one-stop platform for both personal and corporate travel needs [1] Group 2: Financial Implications - Citigroup maintains a "Buy" rating for Cao Cao Travel and sets a target price of HKD 70 [1] - Providing services to corporate clients and high-end users is expected to improve the overall ARPU (Average Revenue Per User) and profit margins for the company [1] Group 3: Customer Loyalty and Synergies - The targeted user groups are likely to exhibit higher loyalty and stickiness to the platform [1] - There is potential for cross-selling synergies that could benefit the existing travel business of the company [1]

Core Viewpoint - Citigroup reports that Cao Cao Travel (02643) aims to establish a one-stop travel and business travel technology platform by acquiring StarRides and Geely Business, targeting both individual and corporate clients [1] Group 1: Strategic Initiatives - The acquisition of StarRides and Geely Business is intended to enhance service offerings for corporate clients and high-end users [1] - Providing services to these user groups is expected to improve Cao Cao Travel's overall ARPU (Average Revenue Per User) and profit margins [1] Group 2: Market Positioning - The targeted user groups are likely to exhibit higher loyalty and stickiness to the platform [1] - The strategy may create cross-selling synergies for the company's existing ride-hailing business [1] Group 3: Analyst Rating - Citigroup maintains a "Buy" rating for the company and reiterates a target price of 70 HKD [1]

Group 1 - The Hang Seng Index rose by 219 points, closing at 25,854 points, with a daily trading volume of HKD 1,997.69 million [3] - The China National Aviation Holding Company announced the purchase of 60 Airbus A320NEO aircraft, with a total catalog price of approximately USD 9.53 billion, expected to be delivered between 2028 and 2032 [10] - Caocao Travel acquired Weixing Technology for a total cash consideration of RMB 225 million, aiming to enhance its high-end travel service offerings [11] Group 2 - The Hong Kong Monetary Authority reported that over 3,200 individuals have opened accounts under the "Smart Savings" program, with total protected deposits amounting to approximately HKD 1.6 billion [6] - The Chinese Ministry of Finance announced a new policy exempting individuals from value-added tax on the sale of residential properties purchased for over two years, effective January 1, 2024 [8] - The National Development and Reform Commission of China has introduced a subsidy policy for the replacement of old consumer goods, with a total budget of RMB 62.5 billion for 2026 [9]

Core Viewpoint - Citigroup's research report indicates that Cao Cao Travel aims to establish a comprehensive travel and business travel technology platform by acquiring Yao Travel and Geely Business Travel, targeting both individual and corporate clients [1] Group 1: Business Strategy - The acquisition strategy is focused on enhancing services for corporate clients and high-end users, which is expected to improve Cao Cao Travel's overall ARPU (Average Revenue Per User) and profit margins [1] - Targeting corporate and high-end users may lead to higher customer loyalty and stickiness, benefiting the platform's long-term sustainability [1] Group 2: Market Impact - The report suggests that the new platform could create cross-selling synergies for the company's existing travel business, potentially increasing overall revenue [1] - Citigroup maintains a "Buy" rating for the company and sets a target price of 70 HKD [1]

Core Viewpoint - Caocao Travel (02643) announced two significant strategic acquisitions, acquiring 100% of Weixing Technology Co., Ltd. (referred to as "Yaotong Travel") and planning to acquire 100% of Zhejiang Geely Business Service Co., Ltd. (referred to as "Geely Business Travel") [1] Group 1 - Caocao Travel's stock rose over 6% in early trading and was up 2.32% at HKD 30.92 with a trading volume of HKD 326.03 million [1] - Following the completion of these acquisitions, Yaotong Travel and Geely Business Travel will become wholly-owned subsidiaries of Caocao Travel [1] - This move aims to enhance Caocao Travel's product matrix and create a one-stop technology travel platform [1] Group 2 - Caocao Travel is a key commercial vehicle for Geely Holding Group's Robotaxi initiative, focusing on building a leading global technology travel platform [1] - After the integration, Caocao Travel will further consolidate internal resources to create business synergy, positioning itself as the core platform for Geely Holding Group's mobility services and tapping into the growth of the business travel market [1]

Core Viewpoint - Cao Cao Mobility announced two significant strategic acquisitions, acquiring 100% of Weixing Technology Co., Ltd. (referred to as "Yao Mobility") and planning to acquire 100% of Zhejiang Geely Business Services Co., Ltd. (referred to as "Geely Business Travel") [1][4] Group 1 - The acquisitions will result in Yao Mobility and Geely Business Travel becoming wholly-owned subsidiaries of Cao Cao Mobility, enhancing its product matrix and creating a one-stop technology travel platform [1][4] - Cao Cao Mobility is a key commercial vehicle for Geely Holding Group's Robotaxi initiative, aiming to establish a leading global technology travel platform [1][4] - Following the integration, Cao Cao Mobility will further consolidate internal resources to create business synergies, positioning itself as the core platform for Geely Holding Group's mobility services and tapping into the growth of the business travel market [1][4]

Core Viewpoint - Cao Cao Mobility (02643) has announced two significant strategic acquisitions, aiming to enhance its product matrix and establish a one-stop technology mobility platform [1] Group 1: Acquisitions - The company has acquired 100% of Weixing Technology Co., Ltd. (referred to as "Yaoshou Travel") and plans to acquire 100% of Zhejiang Geely Business Services Co., Ltd. (referred to as "Geely Business Travel") [1] - Following the completion of these acquisitions, Yaoshou Travel and Geely Business Travel will become wholly-owned subsidiaries of Cao Cao Mobility [1] Group 2: Strategic Goals - The acquisitions are intended to further upgrade Cao Cao Mobility's product offerings and integrate internal resources to create business synergies [1] - As the core platform for Geely Holding Group's mobility business, Cao Cao Mobility aims to leverage these acquisitions to tap into the growth of the business travel service market [1]

Group 1 - The core message of the article highlights that Cao Cao Mobility (02643) experienced a stock price increase of over 6% in early trading, currently trading at 30.92 HKD with a transaction volume of 32.6 million HKD [1] - On December 30, Cao Cao Mobility announced two significant strategic acquisitions: the acquisition of 100% equity in Weixing Technology Co., Ltd. (referred to as "Yao Mobility") and the planned acquisition of 100% equity in Zhejiang Geely Business Services Co., Ltd. (referred to as "Geely Business Travel") [1] - Following the completion of these acquisitions, Yao Mobility and Geely Business Travel will become wholly-owned subsidiaries of Cao Cao Mobility, enhancing its product matrix and establishing a one-stop technology travel platform [1] Group 2 - Cao Cao Mobility is a key commercial vehicle for Geely Holding Group's Robotaxi initiative, aiming to create a globally leading technology travel platform [1] - After the integration is completed, Cao Cao Mobility will further consolidate internal resources to form a business synergy, positioning itself as the core platform for Geely Holding Group's mobility services and tapping into the growth of the business travel market [1]