Financial reporter Zhang Tingwang
Li Shufu's 9th IPO is coming.
According to the disclosure of the Hong Kong Stock Exchange on April 29, CaoCao Inc. (hereinafter referred to as "Cao Cao Travel") has submitted a listing application to be listed on the main board.
According to the data, Cao Cao was incubated and established by Geely Holding Group in 2015 and is headquartered in Suzhou. Before the IPO, Ugo Investment Limited, owned by Geely Holding Group founder Li Shufu, held 83.9% of the shares.
Backed by Geely Group
The pre-investment valuation is 17 billion
Cao Cao, Cao Cao arrived, Cao Cao was founded at the beginning of the meaning of speed, but for the road to listing, Cao Cao traveled a little slower.
In September 2021, Gong Xin, CEO of Cao Cao Mobility, bluntly said: The online car-hailing business has huge potential, and the development of the market needs financial support. In the future, we will bring in more investors, especially strategic investors, and may have an IPO in the next five years, but have not yet decided on a listing location. This was seen as a signal for Cao Cao to launch an IPO.
In August 2022, Cao Cao was rumored to apply for an IPO in Hong Kong as soon as 2023, although Cao Cao did not comment, but the market still pinned hope. In December of that year, Cao Cao was once again rumored to apply for an IPO in Hong Kong as soon as 2023, but there has been no follow-up since then.
The reason why Cao Cao Travel has been rumored to go to Hong Kong for IPO many times in 2022 is one thing worth paying attention to. In May 2022, Didi was hastily delisted from the U.S. stock market, and since then, Didi's market share in the domestic ride-hailing industry has gradually declined, from a high of about 90% to 67%. This is indeed an opportunity for other ride-hailing platforms.
Now, Cao Cao's travel has finally arrived.
According to the prospectus, Cao Cao's revenue comes from travel services, vehicle leasing, vehicle sales and others, in addition, Cao Cao Travel also provides vehicle leasing services to transportation partners, and sells vehicles to transportation partners, third-party fleet operators and individual drivers.
From 2021 to 2023, Cao Cao's travel revenue will be 7.153 billion yuan, 7.631 billion yuan and 10.668 billion yuan respectively. According to Frost & Sullivan, Cao Cao ranked as the third largest ride-hailing platform in China from 2021 to 2023 in terms of total transaction value (GTV).
In terms of business categories, the travel services provided in the form of online car-hailing are its main source of income. From 2021 to 2023, the company's mobility service revenue will be 6.888 billion yuan, 7.467 billion yuan and 10.300 billion yuan respectively, accounting for 96.3%, 97.9% and 96.6% of the total revenue.
Cao Cao Travel provides two major online car-hailing service lines: preferential service and private car service.
From the perspective of development history, Cao Cao Mobility began to focus on customized car and car service solutions in 2021, and then began to deploy customized cars to provide special car services in 2022, and deployed more customized vehicles for Huixuan Service in 2023. As of December 31, 2023, Cao Cao operated a fleet of approximately 31,000 custom-built vehicles in 24 cities.
On the other hand, Cao Cao has a close relationship with Geely Group and its founder Li Shufu.
In fact, Cao Cao Travel was incubated by Geely Group, which is a strategic investment business of Geely Group to lay out the "new energy vehicle sharing ecology". According to the prospectus, before the IPO, Li Shufu's Ugo Investment Limited held 83.9% of the shares and had absolute control over Cao Cao.
If Cao Cao successfully lands on the Hong Kong stock market, it will become the ninth listed company under the name of Li Shufu after Geely Automobile, Volvo, Polestar Auto, ECARX, Qianjiang Motorcycle, Hanma Technology, Lotus Technology and Lifan Technology.
At the same time, in the prospectus, Cao Cao also made no secret of its deep binding with Geely. For example, Cao Cao said that its strategic cooperation with Geely Group has improved operational efficiency, making customized cars more economical and driving experience. At the same time, Cao Cao also leverages the expanding network of battery swap stations and auto repair shops in Geely's ecosystem to provide vehicle service solutions for drivers.
After Cao Cao completed a financing of 1.8 billion yuan in August 2021, it was valued at 17 billion yuan before investment.
The loss in three years was 7 billion yuan
More than 70% of revenue comes from third-party aggregators
In the past three years, Cao Cao's revenue has increased, but it is not yet profitable.
According to the prospectus, from 2021 to 2023, Cao Cao's losses will be 3.007 billion yuan, 2.007 billion yuan, and 1.981 billion yuan respectively, and the loss in three years will reach 7 billion yuan. In the same period, Cao Cao's adjusted losses were 2.959 billion yuan, 1.651 billion yuan and 966 million yuan respectively, and the adjusted loss rates were 41.4%, 21.6% and 9.1% respectively.
At the same time, it can also be seen that Cao Cao's travel performance is developing for the better. Due to the company's launch of customized cars and comprehensive car service solutions, and the successful implementation of the strategy of optimizing vehicle TCO, Cao Cao's gross profit margin is "climbing".
In 2021 and 2022, Cao Cao's gross profit was -1.747 billion yuan and -339 million yuan, respectively, and in 2023, the company recorded a gross profit of 615 million yuan. From 2021 to 2023, the gross profit margin will be -24.4%, -4.4% and 5.8%, respectively.
From the perspective of cost of sales (mainly including driver income and subsidies, depreciation expenses and service costs for travel services), from 2021 to 2023, the proportion of the company's sales cost in revenue will continue to decline.
Cao Cao's order acquisition includes two parts: one is its own channels, including the operation of Cao Cao's travel APP, top hat travel APP, and Cao Cao travel and top hat travel mini programs on WeChat and Alipay, and the other is to cooperate with aggregation platforms to receive orders from individual users, mainly after 2023.
According to the prospectus, from 2021 to 2023, the GTV of orders received by Cao Cao Travel from the aggregation platform will be 3.9 billion yuan, 4.4 billion yuan and 8.9 billion yuan respectively, accounting for 43.8%, 49.9% and 73.2% of the total GTV in the same period, respectively.
In other words, Cao Cao Travel has changed from more than half of the previous orders from self-operated channels to more than seventy percent of its revenue from third-party aggregation platforms.
Cao Cao's drivers are also divided into two categories, one is ancillary drivers, i.e., drivers who use the cars provided by Cao Cao Mobility and fulfill orders on the Cao Cao Mobility platform for all or almost all of the service time, and the other is capacity partner drivers, i.e., drivers who use the cars provided by Cao Cao's transportation capacity partners and usually fulfill orders on the Cao Cao Mobility platform in a smaller part of the time.
Cao Cao's driver base is also growing. From 2021 to 2023, the total number of active drivers of Cao Cao Travel will reach 450,900, 600,100 and 699,900 respectively. It is worth noting that the number of affiliated drivers has decreased year by year over the past three years. From 2021 to 2023, the total number of Cao Cao's auxiliary drivers will be 61,400, 60,200 and 56,800 respectively, accounting for 13.6%, 10.0% and 8.1% respectively.
This has also led to a sharp increase in the company's commissions paid to third-party aggregator platforms, which will be RMB277 million, RMB322 million and RMB667 million respectively from 2021 to 2023, accounting for 54.7%, 50.3% and 79.7% of the overall sales and marketing expenses.
In addition, Cao Cao does not seem to have much cash in his account. According to the prospectus, Cao Cao's year-end cash on the account was only 580 million yuan, far less than the loss of a year.
(Image source in the article: prospectus)