Guosheng Securities initiated coverage on CAOCAO INC (02643) with a "Buy" rating, recognizing it as a leading technology-driven mobility platform in China. The company is deeply integrated with Geely Holding Group's ecosystem, leveraging synergies from customized vehicles and aggregated platform traffic to achieve high-quality expansion. With technological enhancements driving efficiency, CAOCAO ranks as the second-largest ride-hailing platform by GTV in China.
The report highlights CAOCAO's strategic focus on autonomous driving, positioning it as a rare global player that combines intelligent vehicle customization, autonomous driving technology, and smart operations. Guosheng Securities remains optimistic about the company's long-term growth potential.
**Key Takeaways:** 1. **Leading Shared Mobility Player with Strong Industry Synergies** Founded in 2015 under Geely Group, CAOCAO is China's second-largest ride-hailing platform by 2024 GTV. It strengthens brand positioning through customized fleets and collaborates with mobility partners for rapid market expansion. The company is actively investing in autonomous driving to prepare for next-generation mobility services. Backed by its parent company’s expertise in automotive manufacturing, new energy technology, connectivity, and autonomous driving, CAOCAO benefits from unique ecosystem advantages.
In 1H25, revenue surged 53.50% YoY to RMB 9.456 billion, with improving gross margins and operating efficiency. Network effects further reinforced its market position.
2. **Expansive Market with Clear Competitive Landscape** Mobility remains a fundamental societal need, with China’s total market size reaching RMB 8.0 trillion in 2024. Shared mobility accounted for RMB 344.4 billion and is projected to grow at a 17.0% CAGR to RMB 800 billion by 2029, raising penetration from 4.3% to 7.6%. The industry is characterized by a dominant leader and strong regional players, with the top five platforms holding an 86% market share and over 85% concentration in tier 1-2 cities.
3. **Tech-Driven Standardized Services & Ecosystem Innovation** CAOCAO’s rapid revenue growth stems from aggregated platform traffic and tech-enabled operational upgrades. Its standardized vehicle offerings enhance brand consistency and driver loyalty. The company is piloting autonomous ride-hailing in Suzhou and Hangzhou, laying groundwork for future commercialization.
Core competitive advantages include: - Ecosystem integration and supply chain synergies - Standardized services with cost optimization - Brand differentiation through service quality - Tech-driven operational innovation and compliance
4. **Autonomous Mobility: A Multi-Billion-Dollar Opportunity** The global autonomous mobility market is forecast to hit $359.6 billion by 2035. With advancing technology, supportive policies, declining costs, and growing user acceptance, robotaxis are nearing commercialization. CAOCAO is well-positioned to capitalize on this trend through group synergies.
**Risks:** Dependence on aggregated platforms; talent retention challenges; data privacy and cybersecurity compliance risks.
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