According to a recent in-depth research report, Changjiang Securities Company Limited has initiated coverage on CAOCAO INC (SEHK: 02643) with a "Buy" investment rating. The report asserts that the company has successfully leveraged its deep integration with the Geely Group's industrial chain to build differentiated competitive barriers. It has effectively translated this supply chain advantage into tangible profit growth and cash flow improvement, completing its business model transition from a focus on "scale expansion" to one centered on "efficiency harvesting."
Key Advantages of the Core Business Model
The analysis highlights that CAOCAO INC is a leading mobility service platform built around a customized vehicle fleet, which grants it a dual advantage. First, the low-cost model of these purpose-built vehicles allows the company to convert traditionally high customer acquisition costs into stable productivity investments. This optimizes platform marginal profit rates and translates into net gross profit growth. Second, the cost advantage of these vehicles significantly broadens the potential net income for drivers, helping to build a highly loyal, standardized, and compliant driver pool. This achieves a dual leap in both cost efficiency and supply quality. The report further notes that driver hourly earnings at CAOCAO INC exceed the industry average.
Strategic Focus on Future Growth
Changjiang Securities Company Limited indicates that, as the most important commercial vehicle for Geely Holding Group's Robotaxi ambitions, autonomous ride-hailing represents a crucial medium-to-long-term strategy for CAOCAO INC. The company commenced its Robotaxi business expansion in 2025, outlining a clear "Ten Years, One Hundred Cities, One Trillion Yuan" development goal. It plans to progress from test operations to full-scale commercialization through a three-step strategy. Currently, the company is exploring the transition from safety drivers to fully driverless operations. The next phase will involve launching comprehensive commercial operations globally using a fully customized Robotaxi vehicle.
Operational Model and Vehicle Development
The research points out that CAOCAO INC's Robotaxi business employs an integrated operational model combining "intelligent custom vehicles, intelligent driving technology, and intelligent operations." A key component is the fully customized Robotaxi model, Eva Cab, co-developed with Geely and partners, which debuted at the Beijing Auto Show in late April 2026. The vehicle features a native low-drag integrated design with no steering wheel or passenger seat, supporting automatic battery swapping and cleaning. Its design lifespan is 2-3 times that of a standard passenger car, with key component longevity also surpassing ordinary vehicles, leading to significantly extended maintenance cycles. The low procurement and operational costs ensure a very low Total Cost of Ownership (TCO), securing fleet asset returns and paving the way for profitable scaling.
Financial Projections and Valuation Outlook
Changjiang Securities Company Limited reveals that CAOCAO INC plans to use the Eva Cab as the primary vehicle for future Robotaxi commercialization, with mass production scheduled for 2027. The company aims to deploy a cumulative total of 100,000 units by 2030. According to the report's estimates, the gross profit contribution from the Robotaxi business as a percentage of Gross Transaction Value (GTV) could be over 20% higher than that of the traditional ride-hailing business. The securities firm forecasts the company's revenue for 2026-2028 to be RMB 25.6 billion, RMB 31.7 billion, and RMB 38.1 billion, respectively, corresponding to Price-to-Sales (PS) ratios of 0.42x, 0.34x, and 0.28x. The current valuation is considered low, offering a high margin of safety.
The report concludes that the core ride-hailing business of CAOCAO INC continues to show improving profitability, aided by AI technology enhancing driver dispatch and user subsidy allocation efficiency, coupled with its unique custom vehicle advantage driving steady profit growth. Simultaneously, the Robotaxi business holds the potential to optimize the company's overall profit model. Therefore, Changjiang Securities Company Limited has initiated coverage with a strong recommendation, assigning a "Buy" rating.
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