On December 30, CAOCAO INC (02643) announced two significant strategic acquisitions: the acquisition of 100% equity in Weixing Technology Co., Ltd. (hereinafter referred to as "Yao Chuxing") and a proposed acquisition of 100% equity in Zhejiang Geely Business Service Co., Ltd. (hereinafter referred to as "Geely Business Travel").
In response, Citigroup issued a research report maintaining its "Buy" rating on CAOCAO INC with a target price of HK$70.
Citigroup believes that by acquiring Yao Chuxing, a premium mobility service platform, and Geely Business Travel, a corporate travel management service platform, CAOCAO INC will build a one-stop technology-driven mobility platform covering both individual and corporate clients, standard and premium services, and integrating "mobility + business travel."
The report stated that CAOCAO INC is expected to leverage Yao Chuxing's service network across 12 global cities and Geely Business Travel's overseas customer resources to accelerate its international expansion, further consolidating its market competitiveness and ecosystem integration capabilities.
Citigroup believes that serving corporate clients and premium users will help increase CAOCAO INC's overall Average Revenue Per User (ARPU) and profit margins; these user groups are likely to exhibit higher loyalty and stickiness to the platform and may bring cross-selling synergies to CAOCAO INC's existing overall mobility business.
It is reported that since launching corporate client services in 2016, CAOCAO INC had served over 13,500 corporate clients by December 31, 2024.
Yao Chuxing possesses mature operations in corporate meetings and events, daily corporate transportation, and premium ride-hailing services, while Geely Business Travel can provide full-process travel solutions and comprehensive services for meetings and events.
Upon completion of the integration, Yao Chuxing and Geely Business Travel will fully leverage CAOCAO INC's platform capabilities to continue providing high-quality services to existing customers.
As the most important commercialization vehicle for Geely Holding Group's Robotaxi initiatives, CAOCAO INC is committed to building a globally leading technology-driven mobility platform.
Following this integration, CAOCAO INC will further consolidate internal resources to create business synergies, acting as the core platform for Geely Holding Group's mobility business to tap into the growth of the business travel services market.
CAOCAO INC recently saw the lock-up period expire for cornerstone investors and pre-IPO shareholders, with its share price remaining stable post-lockup.
Institutions like Citigroup continue to be optimistic about CAOCAO INC's long-term development, and these strategic acquisitions are expected to further solidify market confidence.