CaoCao Submits Listing Prospectus to the Hong Kong Stock Exchange

CaoCao Mobility, a subsidiary of Geely Group, has submitted its prospectus to the Hong Kong Stock Exchange, aiming for a main board listing with Huatai International, Bank of Agriculture and Commerce International, and GF Financing (Hong Kong) acting as joint sponsors.

Established in 2015, CaoCao Mobility has evolved into a leading shared mobility platform in China, boasting the largest custom vehicle fleet domestically. According to Frost & Sullivan, CaoCao Mobility has consistently ranked among the top three ride-hailing platforms in China based on Gross Transaction Value (GTV) from 2021 to 2023.

The prospectus outlines CaoCao Mobility's future plans, including upgrading and introducing custom vehicles, enhancing vehicle service solutions and improving service quality, expanding geographical coverage, and investing in autonomous driving technology.

From 2021 to 2023, CaoCao Mobility's revenues were CNY 71.53 billion, CNY 76.31 billion, and CNY 106.68 billion, respectively. Notably, in 2023, the company achieved a year-on-year revenue growth of 39.8%. Furthermore, in 2023, CaoCao Mobility's gross profit margin turned positive at 5.8%, with an adjusted EBITDA margin of 5.0% in the fourth quarter of 2023.

The company's developmental trajectory reveals a focus on custom vehicles and vehicle service solutions starting in 2021, followed by the deployment of custom vehicles for premium ride-hailing services in 2022, and an increased deployment of custom vehicles for its preferred service in 2023. As of December 31, 2023, CaoCao Mobility operated a custom vehicle fleet of approximately 31,000 vehicles across 24 cities, the largest of its kind in the industry nationwide, according to Frost & Sullivan.

CaoCao Mobility's vehicle design emphasizes not only reducing total cost of ownership (TCO) but also providing a comfortable and efficient working environment. For instance, the company enhances driver comfort and efficiency through specially tailored ventilated seats and heat map assistance designed for extended driving. Additionally, the custom vehicles feature a battery swapping architecture allowing for a 60-second swap, significantly increasing the vehicles' operational uptime.

As a result, an increasing number of drivers are joining CaoCao Mobility's platform due to improved driving experiences and TCO benefits. Since its inception, CaoCao Mobility has provided flexible income opportunities for over 3 million drivers cumulatively. In 2023, the average monthly driver retention rate on the platform increased by approximately 6 percentage points to 74.5% from 68.7% in 2022.

Furthermore, focusing on custom vehicles and vehicle service solutions has enabled CaoCao Mobility to consistently deliver a high-quality riding experience for passengers. In an independent third-party survey covering thousands of shared mobility users nationwide conducted in March 2024, CaoCao Mobility was rated as the top-performing shared mobility platform in terms of service reputation, achieving the highest user approval rating. In CaoCao Mobility's Net Promoter Score (NPS), the average score for the first half of 2023 for users exclusively utilizing the custom vehicle premium service was 45.3%, significantly higher than the average score for users primarily using non-custom vehicles for preferred service.

CaoCao Mobility also focuses on technological advancements. In addition to the intelligence of its vehicles, CaoCao Mobility has developed a proprietary AI-driven decision-making system called "CaoCao Brain." This system can predict future travel demands, optimize dispatching, and maintain operational capacity to prevent mismatches in supply and demand due to fluctuations. Consequently, it increases driver income, reduces empty miles, and decreases the average wait time for both passengers and drivers.

Through a series of changes in the cost structure of its travel services, CaoCao Mobility has systematically improved its unit economic efficiency and identified clear paths to profitability. In 2023, CaoCao Mobility reduced the percentage of total user acquisition costs as a share of Gross Transaction Value (GTV) from 22.1% in 2022 to 18.1%. In other words, while maintaining a stable Average Order Value (AOV), customer acquisition efficiency has significantly increased.

According to data from Frost & Sullivan, the market size of China's shared travel services in 2023 was CNY 282.1 billion, and it is projected to further increase to CNY 751.3 billion by 2028 at a compound annual growth rate of 20.6%. Simultaneously, the market penetration rate of shared travel services is expected to more than double, rising from 3.8% in 2023 to 7.3% in 2028. This implies that for CaoCao Mobility, which has gained considerable recognition and loyalty from both drivers and passengers, there is potential to further leverage its leading position in this growing market, thus driving rapid performance growth.

Moreover, CaoCao Mobility has embarked on international expansion. In 2020, the CaoCao Mobility brand launched ride-hailing services in Paris. As of May 2022, CaoCao Mobility had 406,000 app downloads and 127,000 registered users, expanding its operations to Nice and Cannes in France. The company plans to gradually expand to other countries and major cities across Europe. Additionally, CaoCao Mobility will introduce the London taxi driver training certification system in Paris, combining it with CaoCao Mobility's domestic "Driver Position Quality Assessment Model."