Geely-backed Caocao Inc. Goes for Hong Kong IPO

On April 30, CaoCao Inc. (CaoCao Chuxing) submitted an application for listing on the main board of the Hong Kong Stock Exchange. Huatai International, Agricultural Bank of China International, and GF Securities (Hong Kong) are the joint sponsors.

CaoCao Chuxing was incubated by Geely Holding Group in 2015 and is headquartered in Suzhou. CaoCao Chuxing’s services cover mobility services, vehicle leasing, vehicle sales, and others. Among them, ride-hailing services are the main source of income. According to data from Frost & Sullivan, based on the total transaction value (GTV), CaoCao Chuxing ranked among the top three ride-hailing platforms in China in 2021, 2022, and 2023.

CaoCao Chuxing began deploying customized cars and vehicle service solutions in 2021, then started deploying customized cars to provide dedicated car services in 2022, and deployed more customized cars for its premium selection services in 2023. As of December 31, 2023, CaoCao Chuxing operated a fleet of about 31,000 customized cars in 24 cities. According to data from Frost & Sullivan, this is the largest fleet of customized cars in the same industry in China.

Benefiting from the economies of scale and supply chain negotiation capabilities of the Geely Auto Group, the deployment of customized cars can achieve high cost-effectiveness. According to data from Frost & Sullivan, the estimated TCO (Total Cost of Ownership) of the two types of customized cars currently operated by CaoCao Chuxing, Maple 80V and CaoCao 60, are 0.53 RMB per kilometer and 0.47 RMB per kilometer, respectively. Compared with typical pure electric vehicles with battery replacement capabilities, the TCO of CaoCao Chuxing’s customized cars has been reduced by 32% to 40%. The prospectus shows that since its establishment, CaoCao Chuxing has created flexible income opportunities for more than three million drivers, and the average monthly driver retention rate has increased from 68.7% in 2022 to 74.5% in 2023.

Over the past three years, CaoCao Chuxing has seen steady growth in scale and continuous improvement in profitability. The prospectus shows that from 2021 to 2023, the company’s revenue increased from 7.2 billion RMB to 10.7 billion RMB. In 2023, driven by a significant increase in order volume and growth in vehicle sales revenue, the company’s revenue increased by 39.8% year-on-year, and the gross profit margin increased to 5.8%. In the fourth quarter of 2023, CaoCao Chuxing recorded an adjusted EBITDA margin of 5.0%.

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