CAOCAO INC (Stock Code: 02643.HK), the ride-hailing platform incubated by Geely Group, recently released its 2025 financial results. The report indicates strong growth, with total revenue increasing by 37.7% year-on-year to RMB 20.20 billion. The net loss narrowed significantly by 50.8% compared to the previous year, reaching RMB 614 million. However, behind these seemingly positive figures, the company continues to face persistent losses, tight cash flow, deep reliance on financing from related parties, and multiple risks associated with its heavy bet on the distant Robotaxi sector. Since its peak in August 2025, the company's stock price has fallen by nearly 70%, reflecting market skepticism about its profitability prospects and strategic choices.
The performance in 2025 exhibited a typical pattern of increasing revenue without corresponding profit growth. Although revenue surpassed the RMB 200 billion mark, with Gross Transaction Value (GTV) growing by 38.2% and average monthly active users increasing by 43.9%, the company has yet to escape losses.
While the net loss narrowed to RMB 614 million for the year, a significant improvement from the RMB 1.246 billion loss in 2024, this "improvement" was partly attributable to non-operating factors. After adjusting for the impact of non-cash items such as changes in the fair value of financial liabilities, the adjusted net loss remained high at RMB 508 million, representing a loss margin of 2.5%. This means the company loses RMB 2.5 for every RMB 100 of revenue it generates. Although CAOCAO INC claimed it achieved "positive adjusted profit" in the fourth quarter of 2025, this was only a single-quarter figure based on non-IFRS adjusted data. Achieving stable, sustainable net profit for the full year remains a distant goal.
The gross margin saw a slight increase from 8.1% to 9.4%, primarily due to economies of scale resulting from optimized subsidy efficiency through its AI dispatch system. However, the ride-hailing industry is inherently a low-margin business, with nearly 90% of revenue costs constituting rigid expenses that are difficult to overcome. The slight improvement in profitability is highly vulnerable to being eroded by intensified market competition leading to resumed subsidies or increased operational costs.
More severe than the persistent losses are the company's tight cash flow and deep reliance on financing from its controlling shareholder, the Geely Group. Net cash generated from operating activities was positive at RMB 378 million in 2025, but this amount is insufficient to support the nearly RMB 20 billion revenue scale, substantial capital expenditures, and debt repayment requirements. The company acknowledged in its annual report that as of December 31, 2025, its current liabilities exceeded its current assets by approximately RMB 4.241 billion, indicating "events or conditions that may cast significant doubt on the group's ability to continue as a going concern."
The company's financing lifeline is highly dependent on guarantees and support from related parties within Geely Holding. As of the end of 2025, the vast majority of its total borrowings of RMB 7.42 billion, including Asset-Backed Securities and bank loans, were guaranteed by Zhejiang Geely Holding Group Co., Ltd. Throughout the year, the company raised approximately RMB 3.9 billion through several ABS issuances, using the future service fee collection rights from its self-owned vehicle fleet as collateral. While this financing model can address immediate needs, it essentially pledges core operational assets and future cash flows. Long-term reliance on this model will severely constrain financial independence and strategic flexibility.
Since hitting a historic high of HKD 92.5 in August 2025, CAOCAO INC's stock price has experienced a volatile decline, closing at HKD 25.32 on April 17, 2026, a drop of over 70%. This drastic fall reflects not only a market re-evaluation of the ride-hailing industry's valuation logic but also a vote of no confidence in CAOCAO INC's business model, which lacks a clear path to profitability and relies on external support.
Facing profitability challenges in its core ride-hailing business, CAOCAO INC is betting its future on the emerging Robotaxi sector. However, this appears to be a high-risk, high-investment long-term gamble. The company is deeply involved in Robotaxi development with Geely, having launched a 2.0 full-stack solution and planning to unveil a third-generation L4 dedicated vehicle by the end of 2026. Nevertheless, the global commercialization of L4 autonomous driving remains in early pilot stages, with significant hurdles in technology, regulation, cost, and safety. Achieving large-scale unmanned operations and significantly improving economic efficiency is widely expected to take another 5-10 years. Diverting substantial resources and expectations to a sector with an extremely long and uncertain payback period, while the core business remains unprofitable, poses a serious risk of strategic resource misallocation.
From late 2025 to early 2026, the company acquired Weixing Technology and Geely Commercial, aiming to expand its corporate service customer base. Simultaneously, it announced plans to advance its international strategy by deploying Robotaxi services overseas. While these expansion initiatives paint an ambitious picture, the challenges of post-acquisition integration, localization in overseas markets, and the immense capital expenditure required for operating on two fronts will place unprecedented pressure on the already strained cash flow and management capabilities.
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