Guotai Haitong: First to grant a "buy" rating to CAOCAO INC (02643) Customization drives growth, intelligent driving defines the future.

Guotai Haitong issued a research report stating that they are initiating coverage on CAOCAO INC (02643) with a "Buy" rating. CAOCAO INC has achieved profitability and efficiency through optimizing the total cost of ownership (TCO) of vehicles, leveraging its deep roots in the custom car ecosystem. With the support of Geely's background in autonomous driving, the company's valuation has upward potential. Based on the PS valuation method, the firm believes the company's fair market value is 22.455 billion RMB, with a target price of 44.16 Hong Kong dollars per share. Guotai Haitong's research report stated: Solid market position, on the path of revenue and profit double-explosion growth CAOCAO INC currently holds the second largest market share in China's online car-hailing market, with market shares of 8.8% and 8.5% in core first and second-tier cities respectively. The company has maintained high revenue growth in recent years, reaching 14.657 billion RMB in 2024, with year-on-year growth rates exceeding 35% in the past two years. Benefiting from economies of scale and cost optimization brought by the custom car strategy, the gross profit margin has experienced "three consecutive jumps" and is expected to reach 8.09% in 2024. The firm predicts that the company is expected to achieve profitability in 2026, entering a dividend period of simultaneous expansion of profitability and business scale. Deep customization reduces costs, driving differential growth through internal closed-loop The company has built a business moat with "custom car strategy" at its core, reducing TCO to around 0.5 RMB per kilometer through deep involvement in vehicle customization. As a "nerve ending" of the Geely ecosystem, the company not only gains stable low-cost production capacity and high-density battery swapping network support, but also provides energy for smart driving algorithms through massive real-road data. This internal closed-loop model of "manufacturing + platform + data" gives it more differentiated advantages than traditional light asset models in operational efficiency, vehicle durability, and compliance against risks. Strategic upgrade to "F cube", company makes full efforts to seize the Robotaxi highland Facing the endgame of travel, the company has fully upgraded its strategy from "N cube" to "F cube", aiming for a fully intelligent customized car, unmanned driving, and automated operating system. With the technical empowerment of Geely's "thousand-mile smart driving", the company plans to launch L4 level Robotaxi customized cars in 2026 and has set a global strategic goal of "ten years, hundred cities, billion in revenue". With the restructuring of driver cost structure, Robotaxi is expected to reshape the industry's profit ceiling. Risk warning Unexpectedly slow progress in autonomous driving technology, policy and regulatory uncertainties, financial pressures, intensified industry competition.