Core Viewpoint - The report by Shenwan Hongyuan highlights that Cao Cao Mobility, a significant ride-sharing platform under Geely Group, is actively developing customized fleets and Robotaxi autonomous driving services, showcasing a clear path to profitability and high growth potential [1][2]. Company Overview - Cao Cao Mobility operates in the ride-hailing service, vehicle sales, and vehicle leasing sectors, making it a key player in China's shared mobility market [1]. - The company has the largest customized ride-hailing fleet in the country, benefiting from Geely Group's strong vehicle research and manufacturing capabilities [1]. Business Strategy - The company employs a "pre-subsidy penetration + post-subsidy optimization" strategy for rapid market expansion, which is expected to improve revenue as user habits develop and operational scale increases [1]. - Revenue growth has consistently outpaced the industry average over the past two years, with a forecast for continued high growth in order volume over the next three years [1][2]. Financial Performance - Despite concerns about ongoing losses, Shenwan Hongyuan believes these are a temporary characteristic of the customized vehicle model, with operating cash flow turning positive in recent years and losses narrowing [2]. - The company is expected to achieve positive EBIT next year and reach profit margins comparable to industry leaders in the following year [2]. Technological Development - Cao Cao Mobility has established a comprehensive ecosystem in the Robotaxi sector, effectively mitigating external technology dependency risks [2]. - The self-developed "Qianli Haohan" autonomous driving solution supports its Robotaxi demonstration operations, with customized vehicles optimized for energy consumption, space, and safety in autonomous driving scenarios [2]. Market Position and Valuation - The company possesses differentiated advantages in customized operations, cost control, and technological ecosystem, with a clear path to profitability [2]. - Shenwan Hongyuan's absolute valuation method estimates the current target market value of Cao Cao Mobility at HKD 46.9 billion (RMB 42.8 billion), indicating approximately 21% upside potential, leading to a "buy" rating [2]. Stock Performance - Cao Cao Mobility was listed on the Hong Kong Stock Exchange on June 25, with an initial price of HKD 41.94 per share, and has seen a steady increase in stock price, reaching HKD 77 by August 19, representing a 69.3% increase from the issue price [3]. - The company is anticipated to be included in the Hong Kong Stock Connect list on September 8, according to predictions from institutions like Morgan Stanley [3].

Core Insights - Cao Cao Mobility officially listed on the Hong Kong Stock Exchange on June 25, becoming the largest ride-hailing platform in Hong Kong, with an offering price of HKD 41.94 and total proceeds of approximately HKD 18.53 billion [2] - Despite the listing, Cao Cao Mobility's stock price fell by 14.16% on the first day, closing at HKD 36, indicating market skepticism towards the company and the ride-hailing sector [2][5] - Didi dominates the ride-hailing market with a 70.4% market share, leaving only 29.6% for other companies, including Cao Cao Mobility, which holds a mere 5.4% [6][12] Company Strategies and Financials - Cao Cao Mobility plans to allocate the net proceeds from its IPO over the next three years to improve service quality (19%), launch customized vehicles (18%), enhance technology and invest in autonomous driving (17%), expand geographical coverage (16%), and for general corporate purposes (10%) [2] - The company reported a significant loss of CNY 1.246 billion in 2024, with 85% of its Gross Transaction Value (GTV) coming from aggregation platforms like Gaode and Baidu, limiting its profit margins [5][6] - Enjoy Travel, a brand under SAIC Group, recently completed a C-round financing of over CNY 1.3 billion and has initiated its IPO plans, aiming to leverage capital markets for industry development [3] Market Dynamics and Competition - The ride-hailing market in China has evolved from a single dominant player to a more diversified landscape, yet the competitive environment remains challenging, with many leading companies still struggling to achieve profitability [5][12] - Companies are increasingly focusing on differentiated markets or innovative technologies, with a notable shift towards the Robotaxi segment as a potential growth area [12][15] - The Robotaxi market is projected to grow significantly, with estimates suggesting a market size of USD 4.7 billion by 2035, prompting companies to invest heavily in this area [12][14] Future Outlook and Innovations - Cao Cao Mobility is developing a comprehensive ecosystem for autonomous driving, integrating vehicle customization, production, and operational services, with plans to launch L4 autonomous Robotaxi models by 2026 [10] - Enjoy Travel is also pursuing Robotaxi commercialization, having completed over 330,000 orders and planning to expand its fleet significantly [11] - The successful IPOs of companies like Cao Cao Mobility and Ruqi Mobility are expected to enhance their financial capabilities to invest in Robotaxi operations and other innovative technologies [15]