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.

Core Viewpoint - The acquisition of all shares of Geely Business by Suzhou Youxing for RMB 65 million aligns with the company's core business strategy and aims to enhance its operational capabilities in corporate services and integrated travel solutions [1] Group 1: Acquisition Details - Suzhou Youxing, a wholly-owned subsidiary of the company, has entered into a share purchase agreement with Geely Holding and Geely Business [1] - The cash consideration for the acquisition is RMB 65 million [1] - Upon completion of the acquisition, Geely Business will become an indirect wholly-owned subsidiary of the company [1] Group 2: Strategic Alignment - The acquisition is in line with the company's core business strategy, focusing on strengthening and expanding its operational capabilities in key areas such as corporate services, integrated travel services, and data integration [1] - Corporate services are a significant component of the company's business, characterized by stable demand, high average prices, and high gross margins per unit [1] Group 3: Market Opportunities - Geely Business's extensive corporate client resources present cross-selling opportunities, aiding the company in rapidly expanding its corporate client base and increasing market share [1] - The synergy between corporate and individual client groups can drive bidirectional traffic and value conversion, enhancing customer loyalty [1] - Geely Business will provide one-stop travel and conference services for the company's corporate clients, enriching the diversity of corporate products and improving service capabilities, leading to stable revenue [1]

Core Viewpoint - The acquisition of Geely Business by Suzhou Youxing for RMB 65 million aligns with the company's core strategy in the transportation industry, enhancing its capabilities in corporate services and integrated travel solutions [1] Group 1: Acquisition Details - Suzhou Youxing, a wholly-owned subsidiary of the company, has entered into an equity acquisition agreement with Geely Holding and Geely Business [1] - The cash consideration for the acquisition is RMB 65 million, and upon completion, Geely Business will become an indirect wholly-owned subsidiary of the company [1] Group 2: Strategic Alignment - Geely Business operates as a business travel management service platform, focusing on providing corporate travel solutions [1] - The acquisition is expected to strengthen and expand the company's operational capabilities in key areas such as corporate services, one-stop business travel services, and data integration [1] Group 3: Market Opportunities - Corporate services are a significant component of the company's business, characterized by stable demand, high average prices, and high gross margins per unit [1] - The rich corporate client resources from Geely Business present cross-selling opportunities, aiding the company in rapidly expanding its corporate client base and increasing market share [1] - The synergy between corporate and individual client groups is anticipated to drive bidirectional traffic and value conversion, enhancing customer loyalty [1] Group 4: Service Enhancement - Geely Business will provide one-stop business travel and conference services to the company's corporate clients, enriching the diversity of corporate products offered [1] - This acquisition is expected to enhance the company's corporate service capabilities and contribute to stable revenue generation [1]