Producer: Sina Finance Listed Company Research Institute
Artist: Kiyo
The ride-hailing track is back in smoke.
Following the announcement of Dida Travel and Ruqi Travel to be listed in Hong Kong, Cao Cao Travel also officially sounded the clarion call to impact the capital market. On April 29, the company submitted a prospectus to the Hong Kong Stock Exchange to be listed on the main board, with Huatai International, ABC International and GF Capital (Hong Kong) as joint sponsors.
It is worth mentioning that Cao Cao, which was incubated by Geely Holding Group, has an extremely close relationship with Geely Automobile and Geely's "helmsman" Li Shufu.
According to the prospectus, the largest shareholder of Hangzhou Youxing Technology Co., Ltd., the domestic operating entity of Cao Cao Mobility, is Zhejiang Jidi Technology Co., Ltd. (formerly Geely Technology Group Co., Ltd.), which holds 69.9% of the company's shares, and Zhejiang Geely Holding Group holds about 13.9% of the shares. CaoCao International Limited, an overseas operating entity, is wholly owned by Li Shufu and has a controlling shareholder of 83.9%.
In addition, during the 2021-2023 period, Cao Cao's largest suppliers are Geely Group, accounting for 13.5%, 15.5%, and 2.6% of procurement sales, respectively. The company's customized cars are manufactured by Geely Group, and provide battery replacement, maintenance and other services. Geely also guaranteed its total borrowings of RMB15.5 billion, with a total outstanding principal amount of approximately RMB7.2 billion as of the Latest Practicable Date.
The surge in revenue and the narrowing of losses all rely on third-party platforms to attract traffic?
In terms of financial data alone, Cao Cao's performance in 2023 is quite impressive.
According to the prospectus, during the reporting period, the company achieved a total revenue of 10.668 billion yuan, a year-on-year surge of 39.8%, compared with a year-on-year growth rate of only 6.69% in 2022; Non-IFRS measures, adjusted net loss was approximately $966 million, a significant decrease of 41.5% year-on-year. Gross profit and adjusted EBITDA turned positive for the first time in the past three years, recording 615 million yuan and 128 million yuan respectively.
The significant improvement in performance is the result of Cao Cao's full embrace of third-party aggregation platforms.
From 2021 to 2023, the total transaction value (GTV) of orders received by the Company on its own channels, including the Cao Cao Travel APP, the Top Hat Travel APP, and the Cao Cao Travel and Top Hat Travel Mini Programs on WeChat and Alipay, will be approximately 5 billion yuan, 4.5 billion yuan, and 3.3 billion yuan, respectively, showing a downward trend year by year. However, the GTV of orders received from aggregators such as AutoNavi and Meituan Taxi has been increasing, and the contribution to the total GTV in 2023 has jumped from less than 50% to 73.2%.
At the same time, the growth rate of Cao Cao's affiliated vehicles slowed down, and the total number of active affiliated drivers declined. The so-called affiliated car refers to the operating vehicle provided by the company and pays for the cost of vehicle insurance, maintenance and repair, while the auxiliary driver refers to the driver who is fulfilling the orders of its own platform all the time, and is trained, assessed, and paid by Cao Cao Travel.
According to the prospectus, the total number of active affiliated vehicles of Cao Cao Travel in 2023 will be about 54,100, a slight increase of only 1.7% year-on-year, a decrease of nearly 19 percentage points from the growth rate in 2021-2022. The total number of active affiliated drivers was approximately 56,800, a decrease of 5.6% compared to 2022. The average monthly active affiliated drivers were about 35,100, which was 3.3% lower than the same indicator in 2021. Correspondingly, the total number of active drivers and the total number of vehicles of transportation partners increased by 19.1% and 15.1% respectively year-on-year during the reporting period.
With the left hand opening the aggregation platform to accept traffic, and the right hand reducing the proportion of self-operated business, Cao Cao Travel finally saw a glimmer of light.
However, relying on a third party is clearly not a long-term solution. On the one hand, Cao Cao needs to pay high commissions for the services of the aggregator platform. In 2023, the company's sales and marketing expenses will reach 667 million yuan, accounting for nearly 80% of the commissions paid to third-party aggregation platforms. In order to control the sales expense rate, Cao Cao can only reduce the promotion, advertising and customer recommendation subsidies of its own channels. In 2023, this expenditure will decrease by 56.1% year-on-year, which has weakened the stickiness of users to the main brand to a certain extent.
On the other hand, since its establishment, Cao Cao has been competing with its competitors with full-time drivers, unified vehicles and mid-to-high-end services. Although abandoning asset-heavy operations can effectively reduce operating costs, it also makes the company no different from other platforms.
Nowadays, the "Matthew effect" of the online car-hailing market is obvious, and the industry has entered the stage of stock competition. In terms of GTV in 2023, Cao Cao's market share is about 4.8%, which is even less than the 75.5% market share of the leading companies. Cao Cao, who is gradually losing his differentiated characteristics, wants to stand out from the encirclement and gain capital recognition, but the road ahead is long and difficult.
The asset-liability ratio is abnormally high all year round, and there is less than 600 million on the books, and you still have to build a car?
Backed by Geely, Cao Cao Travel was once a star project sought after in the primary market.
Combined with the analysis of the prospectus and Tianyancha's public information, the company completed a total of 3 rounds of domestic equity financing before listing. In the A round and A1 rounds in 2018, Cao Cao successively introduced Paradise Silicon Valley, Zheshang Venture Capital, Longqi Investment and Sanchuan Capital at a consideration of 30.75 yuan and 30.76 yuan per share, with a post-investment valuation of about 15.217 billion yuan, successfully ranking among the ranks of "unicorns".
At the time of the B round of financing in 2021, the company's pre-investment valuation has reached 17 billion yuan. With the help of state-owned investment institutions such as Suzhou High-speed Rail New Town, ABC International, Soochow Innovation Capital, and Suzhou Xiangcheng Fund, Cao Cao's valuation finally approached 19 billion yuan.
However, the high valuation threshold has also discouraged many institutions, and Cao Cao has not received a "blood transfusion" since then. From 2021 to 2023, the company's operating losses will be 2.801 billion yuan, 1.866 billion yuan, and 1.575 billion yuan respectively, with a cumulative loss of more than 6.2 billion yuan. Burning money and losing a lot of money, Cao Cao had to borrow a lot of money to turn around.
According to the prospectus, from 2021 to 2022, Cao Cao's short-term loans and long-term loans will be about 2.390 billion yuan and 3.472 billion yuan, and long-term loans will be about 1.400 billion yuan and 2.107 billion yuan, of which asset-backed securities and asset-backed notes will account for between 50% and 55%.
As of December 31, 2023, the company's total debts reached 5.177 billion yuan and 2.353 billion yuan respectively, accounting for about 72.6% and 54.5% of current and non-current liabilities. Because of this, the asset-liability ratio of Cao Cao Travel remained high during the reporting period, recording 198.9%, 213.5% and 225.6% respectively; The current ratio and quick ratio hovered around 0.25, well below the safety warning level.
It is not difficult to find that Cao Cao's liquidity crisis may be imminent.
In particular, the prospectus states that the company has three bank borrowings that will mature in November 2024, December 2024 and April 2025. Based on a rough estimate of the disclosed loan amount, term and fixed annual interest rate, Cao Cao needs to repay the principal and interest totaling 725 million yuan. As of the end of 2023, the company's monetary funds on the books are only 583 million yuan.
But even so, Cao Cao has not given up the "dream of building a car". In March 2023, the company launched the Cao Cao 60, the first compact electric vehicle with a battery swap architecture. Nine months later, Cao Cao has deployed more than 12,000 Cao Cao 60 fleets in 18 cities, completing 17.9 million orders, with a GTV of about 474 million yuan.
Cao Cao 60 was initially positioned as a customized car for the launch of the Cao Cao 60, and in July 2023, it began to turn to capacity partners, drivers and third-party sales engaged in online ride-hailing business. According to incomplete statistics from public data, from August 2023 to February 2024, the monthly sales of Cao Cao 60 have not reached 1,000, and the cumulative sales in 7 months have just exceeded 3,000 units. In the future, if we continue to develop customized cars, it is inevitable that we will continue to invest high amounts of money, and it is still unknown whether Cao Cao, who has a "weak family background", can afford it.