Core Viewpoint - The ride-hailing platform Cao Cao Mobility was listed on the Hong Kong Stock Exchange on June 25, 2023, but experienced a significant drop in stock price, falling over 10% on its first day of trading [2]. Financial Performance - Cao Cao Mobility's revenue from 2022 to 2024 is projected to grow from 7.63 billion RMB to 14.66 billion RMB, maintaining a growth trend [3][4]. - Despite the revenue growth, the company is still operating at a loss, with losses of approximately 2.01 billion RMB, 1.98 billion RMB, and 1.25 billion RMB for the years 2022, 2023, and 2024 respectively [3][4]. Market Position - As of 2024, Cao Cao Mobility is expected to have a market share of 5.4% in the ride-hailing industry [2]. - The company's Gross Transaction Value (GTV) is projected to increase from 12.2 billion RMB in 2023 to 17 billion RMB in 2024, reflecting a year-on-year growth of 38.8% [2]. Dependency on Aggregation Platforms - Cao Cao Mobility has a high dependency on aggregation platforms, with orders from these platforms accounting for 49.9%, 73.2%, and 85.4% of GTV from 2022 to 2024 [2]. Future Developments - The company plans to launch a Robotaxi service in Suzhou and Hangzhou by February 28, 2025, marking a significant milestone for the commercialization of autonomous driving services [4]. - Cao Cao Mobility is collaborating with Geely Group to develop a custom vehicle specifically for Robotaxi services, including an L4 level Robotaxi expected to be launched by the end of 2026 [5].

Core Viewpoint - CaoCao Inc. has listed on the Hong Kong Stock Exchange but faced a significant drop in share price, opening down 15.47% from its IPO price, indicating weak market reception and investor sentiment [2][3]. Company Overview - CaoCao Inc. is the second-largest ride-hailing company in China, holding a market share of 5.4%, significantly lower than Didi's 70.4% [2]. - The company was founded in 2015 as part of Geely Holding Group's strategic investment in the "new energy vehicle sharing ecosystem" [5]. IPO Details - The global offering consisted of 44.18 million shares, with a public offering of 4.42 million shares and an international offering of 39.76 million shares, priced at HKD 41.94 per share, aiming to raise approximately HKD 1.853 billion [5]. - The post-IPO valuation of the company is expected to reach HKD 22.823 billion [5]. Financial Performance - The company reported total revenues of RMB 7.63 billion, RMB 10.67 billion, and RMB 14.66 billion for the years 2022, 2023, and 2024 respectively, with a year-on-year growth of 37.4% in 2024 [8][10]. - Despite revenue growth, the company has faced significant operating losses, with losses of RMB 53 billion, RMB 64 billion, and RMB 72 billion projected for 2022, 2023, and 2024 respectively [7][10]. Business Model - Unlike other ride-hailing platforms that utilize a C2C model, CaoCao operates on a B2C heavy asset model, directly purchasing vehicles and employing dedicated drivers [6]. - The company has a fleet of 216,000, 307,000, and 592,000 active vehicles as of 2022, 2023, and 2024, respectively, with corresponding active driver counts [6]. Cost Structure - CaoCao's total liabilities are projected to reach RMB 112.83 billion by 2024, with net current liabilities of RMB 81.46 billion, indicating liquidity concerns [7]. - The company’s sales costs are heavily influenced by driver income and subsidies, which account for approximately 80% of total sales costs [15]. Market Position and Competition - The ride-hailing market is highly competitive, with CaoCao's business model facing challenges in achieving profitability despite its market position [11][20]. - The company relies significantly on external aggregation platforms for orders, with 49.9%, 73.2%, and 85.4% of its Gross Transaction Value (GTV) coming from these platforms in 2022, 2023, and 2024 respectively [14]. Strategic Initiatives - To improve profitability, the company has focused on enhancing technological capabilities, reducing driver subsidies, and expanding into new markets [9]. - The company achieved a gross profit margin of 8.1% in 2024, recovering from a gross loss margin of 4.4% in 2022 [9].

Investment Rating - The report assigns a "Subscribe" rating to the company with a score of 70 out of 100 [4][14]. Core Insights - The overall transportation market in China is expected to grow from CNY 6.9 trillion in 2022 to CNY 8.0 trillion in 2024, with a further increase to CNY 10.6 trillion by 2029, reflecting a CAGR of 5.4% [3][7]. - The company operates in 136 cities with a total Gross Transaction Value (GTV) of CNY 170 billion in 2024, representing a year-on-year growth of 38.8% and a market share of 5.4% [6][8]. - The company has reduced its reliance on driver subsidies, with the adjusted percentage of driver income and subsidies in total ride service revenue decreasing from 84.2% in 2022 to 79.0% in 2024 [6][9]. Company Overview - The company is a ride-hailing platform incubated by Geely Group, offering two main service lines: Huixuan and Special Car services, utilizing customized vehicles [6][8]. - In 2024, the company's total revenue is projected to reach CNY 146.6 billion, a 37.4% increase year-on-year, with customized vehicle GTV growing by 73.1% to CNY 42.5 billion [8][9]. - The company has a fleet of over 34,000 customized vehicles in 31 cities, with customized vehicle orders accounting for approximately 25.1% of total GTV [6][8]. Financial Performance - The company achieved a gross margin of 8.1% in 2024, recovering from a gross loss margin of 4.4% in 2022, primarily due to optimized vehicle total cost of ownership (TCO) strategies [9]. - The net loss for 2024 is projected at CNY 12.5 billion, with the net loss margin significantly narrowing from 25.8% in 2022 to 8.5% [9]. - Operating cash flow for 2024 is expected to be CNY 2.4 billion, an increase of approximately CNY 1 billion compared to 2023 [9]. Valuation Level - The company's IPO price corresponds to a price-to-sales ratio of 1.4 times for 2024, which is comparable to its peers in the ride-hailing sector [10]. - The report suggests that the company's valuation is reasonable given its large market capitalization and leading industry position [10]. Market Environment - The investment atmosphere in the Hong Kong stock market has improved significantly, with a 27.6% first-day drop rate for new IPOs and an average first-day increase of 11.7% [13]. - The company has secured subscriptions from six cornerstone investors, including major firms, amounting to approximately HKD 950 million, representing about 51.3% of the total share issuance [14].