CITIC SEC: Provides CAOCAO INC (02643) with a "buy" rating, target price of HKD 73.

Recently, CITIC SEC released a research report covering CAOCAO INC (02643) for the first time and gave it a "buy" rating with a target price of 73 Hong Kong dollars. The report pointed out that as the second largest player in the Chinese ride-hailing market, CAOCAO INC is showing significant growth potential and monetization space due to its deep layout in the shared travel sector and early exploration of autonomous driving technology. CITIC SEC predicts that the company's revenue will reach 21.392/27.091/33.845 billion Yuan from 2025 to 2027, with year-on-year growth rates of 45.9%, 26.6%, and 24.9%, and it is expected to achieve net profitability in 2026. According to the report data, CAOCAO INC ranked second in the industry with a 5.4% market share in the Chinese ride-hailing market in 2024, with growth significantly higher than the industry average. In the first half of 2025, revenue reached 9.5 billion Yuan, with a year-on-year growth rate further expanding to 53.5%. In terms of order volume, in the first half of 2025, the platform had 554,000 active drivers per month, a 53.5% year-on-year increase, and active users increased to 38.1 million, a 57.4% year-on-year increase. The balanced growth on both the supply and demand sides has laid a solid foundation for the company's continued expansion. CAOCAO INC has achieved significant results in cost control and operational efficiency improvement. By promoting customized pure electric vehicle models, the company effectively reduced the total cost of ownership (TCO). Data shows that the cost per kilometer of pure electric vehicles is only 0.8 Yuan, 30% lower than traditional fuel vehicles. As of the end of June 2025, CAOCAO INC had deployed over 37,000 customized vehicles in 31 cities, with related order Gross Transaction Value (GTV) reaching 2.5 billion Yuan, a 34.7% increase compared to the same period last year. In addition, the company's gross profit margin increased from 5.1% in 2024 to 8.4% in the first half of 2025, and the operating loss rate significantly narrowed, demonstrating continuous improvement in profitability. In the field of automated driving, CAOCAO INC has taken the lead in conducting Robotaxi pilot services. The company started related tests in February 2025 and plans to launch customized models supporting Level 4 autonomous driving by the end of 2026. CITIC SEC believes that CAOCAO INC is taking advantage of Geely Group's accumulation in the automotive industry chain and its own operational data accumulation to construct an end-to-end ecosystem of "customized vehicles - automated driving systems - service operations," positioning itself at the forefront of future transportation revolution. In the wave of the shared travel market moving towards intelligence and compliance, CAOCAO INC's strategic exploration may provide important paradigms for the industry. CITIC SEC's target price of 73 Hong Kong dollars represents a 51% upside potential compared to the company's stock price of 48.32 Hong Kong dollars on the day the report was released.