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CAOCAO INC(2643)
Analysis¡G
CaoCao Mobility is a Chinese ride-hailing platform incubated by Geely Group. Its revenue primarily comes from mobility services, especially ride-hailing operations. In addition, the company sells vehicles to local transport partners, independent fleet operators, and individual drivers. In 2025, the group delivered robust and strong business growth. Gross Transaction Value (GTV) surged 38.2% from RMB 17 billion in 2024 to RMB 23.4 billion. Average monthly active users grew 43.9% from 28.7 million to 41.3 million, while revenue increased 37.7% from RMB 14.7 billion to RMB 20.2 billion. The growth was mainly driven by refined operations in existing cities, where the provision of relatively standardized and high-quality services through customized vehicles helped raise market share. At the same time, the group continued to expand its service coverage into new cities. As of December 31, 2025, CaoCao Mobility was operating in 195 cities, adding 59 new cities during the year. Furthermore, thanks to its strong reputation and brand influence, along with ongoing optimization of driver and fleet management, the group significantly boosted its supply capacity, with the average number of monthly active drivers rising 35.4% year-on-year.
While rapidly scaling up, the group also improved its profitability. Gross margin rose from 8.1% in 2024 to 9.4% in 2025. Net loss narrowed sharply by 50.8% from RMB 1.246 billion to RMB 613 million, while adjusted net loss decreased 29.8% from RMB 724 million to RMB 508 million. The company achieved positive EBITDA (non-IFRS) for the full year of 2025 and recorded positive adjusted profit (non-IFRS) in the fourth quarter, marking an important milestone on the path toward sustainable profitability. The improvement in profitability was primarily attributable to economies of scale from larger business operations and higher brand awareness. Meanwhile, the group¡¦s transaction engine ¡§CaoCao Brain¡¨ continued to leverage AI technology to optimize algorithms, enhancing driver dispatch efficiency and user subsidy allocation efficiency, which effectively reduced subsidy spending and strengthened overall profitability. During the year, higher user stickiness, increased order density, and improved driver dispatch efficiency led to continuous enhancement in unit economics, driving comprehensive operational efficiency gains.
China¡¦s shared mobility market is vast but remains under-penetrated, offering enormous growth potential. According to Frost & Sullivan data, the shared mobility market is expected to grow at a compound annual growth rate of 17% from 2025 onward, reaching RMB 804.2 billion by 2029. Its penetration rate in the overall mobility industry is projected to rise from 4.3% in 2024 to 7.6%, driven mainly by growing consumer demand for cost-effective travel options and the increasing popularity of shared mobility in lower-tier cities. With its strategic positioning advantages, the group is well-placed to capitalize on this substantial market opportunity, achieving business growth while continuing to improve profitability. Additionally, the group announced plans to establish an independent AI business division to fully advance its AI strategy and complete the key transformation from a mobile internet company to an AI-native company.(I do not hold the above stock.)
Strategy¡G
Buy-in Price: $32.00, Target Price: $35.00-38.00, Cut Loss Price: $30.00
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Shandong Molong(568)
Analysis¡G
Shandong Molong is a company primarily engaged in the manufacturing of specialized equipment for oil drilling and production. Its business covers the R&D, production, and sales of products such as oil casings and tubes, pipeline pipes, and sucker rods. In 2025, the company¡¦s net profit attributable to parent company shareholders was RMB 5.1556 million, successfully reversing the loss of RMB 43.7 million in 2024. Operating revenue reached RMB 1.762 billion, a year-on-year increase of 29.88%, and net cash flow from operating activities surged 630.85% to RMB 321 million. International crude oil prices strengthened, mainly due to escalating tensions in the Middle East, as investors worry that regional conflicts could expand further, threatening global crude oil transportation and supply security. Negotiations between the U.S. and Iran have reached an impasse; the U.S. has stated that if a peace agreement falls through, it may intensify military actions against Iran. Iran has threatened to retaliate against U.S. military facilities in Bahrain, Jordan, and Kuwait. The Strait of Hormuz, which carries about 20% of global seaborne crude oil, faces further supply disruptions. U.S. crude oil inventories have declined significantly, with commercial crude stocks falling by 7.2 million barrels last week¡Xmore than expected¡Xwhile the Strategic Petroleum Reserve dropped to its lowest level since August 2023. Broader supply disruptions in the Middle East have also intensified: transit capacity through the Strait of Hormuz has again fallen to single digits, with the region¡¦s throughput capacity at approximately 6.8 million barrels per day (b/d) and Saudi Arabia¡¦s Red Sea exports at about 3.8 million b/d, reversing earlier recovery trends. Outside the U.S., the global oil inventory tightening trend is even more pronounced: floating storage inventories are declining again, and gasoline inventories are also falling, indicating a widening immediate supply gap. In summary, we believe oil prices may rise further in the short term, and the company is likely to benefit.
Strategy¡G
Buy-in Price: $6.20, Target Price: $7.35, Cut Loss Price: $5.64
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Foryou Group (002906.CH) - Second Growth Curve Gradually Becoming Clear
Company profileForyou Corporation was established in 1993 and is mainly engaged in the R&D, production and sales of automotive electronics and precision die-casting businesses. The Company's automotive electronics business mainly covers two core sectors, namely smart cockpit and advanced driver-assistance systems. Its precision die-casting business is centred on precision mould design and manufacturing technology, covering aluminium alloy, magnesium alloy and zinc alloy product lines. In addition, it actively explores and develops AI, robotics and other related businesses, including optical communication modules, AI high-speed connectors, robotics and other related component businesses. In 2025, the Company reported revenue of RMB13,048 million, up 28.46% yoy; net profit attributable to the parent company was RMB782 million, up 20.00% yoy. Investment SummaryQ1 Revenue Maintained High Growth
In Q1 2026, the Company reported revenue/net profit attributable to the parent company/net profit excluding non-recurring items of RMB3,096 million/RMB166 million/RMB159 million, respectively (RMB, the same below), up 24.37%/6.61%/5.89% yoy, respectively. Gross margin was 16.5%, down 1.7 ppts yoy. The slower profit growth compared with revenue growth was mainly due to factors such as price competition and rising raw material prices. The Company has established a raw material price linkage mechanism with most of its customers, and its operating results are expected to improve significantly from Q2. Automotive Electronics Business Continued to Grow, With Its Leading Position in Smart Cockpit Firmly EstablishedThe Company's automotive electronics business reported revenue of RMB9,675 million in 2025, up 27.25% yoy, accounting for 74.15% of total revenue. CAGR reached 35.66% from 2020 to 2025, maintaining high-quality growth. The Company has built a comprehensive product matrix and solution capabilities in the smart cockpit field. The market shares of HUD, in-vehicle wireless charging and other products continued to rank first in China, while the market shares of LCD instrument panels and central control screens rapidly rose to the forefront of the industry. The Company's customer structure continued to optimise, with a low dependence on any single customer, and the revenue contribution from some new energy vehicle makers and international automotive brands increased. Revenue from customers including Changan, BAIC, Xiaomi, Dongfeng, STELLANTIS, SAIC Volkswagen, BYD, Xpeng, NIO and Leapmotor increased significantly. Leveraging the ADAYO Automotive Open Platform (AAOP), the Company provides customers with "one-stop" overall smart cockpit solutions based on its implementation capabilities in cockpit domain controllers across multiple platforms including Qualcomm, SemiDrive and MediaTek, as well as mainstream large models, demonstrating significant platform-based competitive advantages. Precision Die-Casting Business Improved Its Process Technologies, Enhancing Overall CompetitivenessThe Company overcame a number of difficult technical challenges in mould design and manufacturing, expanded the application of highly flame-retardant magnesium alloy materials, and promoted the deep integration of 3D vision guidance with AI and robotics to improve the flexible changeover capability of automated manufacturing cells. Its capabilities in complex and difficult production processes, including high-vacuum combined extrusion, friction stir welding of aluminium-magnesium alloys, profiling spraying, multi-spindle machining and vacuum adsorption, continued to improve. The precision die-casting business delivered particularly impressive performance in 2025, reporting revenue of RMB2,859 million, up 38.47% yoy, with growth exceeding that of the automotive electronics business. CAGR reached 35.08% from 2020 to 2025. Second Growth Curve Gradually Becoming Clear, with Capacity Expansion Releasing Growth MomentumThe Company actively explores non-automotive businesses such as AI and robotics: 1) In the AI infrastructure field, optical communication modules, high-speed connectors and data centre cooling system components have secured project nominations; 2) In the robotics field, the Company has received orders for robotics display screens and joint module components, and jointly developed robotics main and auxiliary controllers, with brand momentum surging and sales increasing exponentially. Following a record-high scale of capacity construction in 2025, capital expenditure is expected to remain at a high level in 2026, focusing on the Thailand Production Base, the expansion of the Automotive Electronics Huizhou Base, the expansion of the zinc alloy die-casting business in the AI field, and Phase III of the Precision Die-Casting Changxing Project. Capacity expansion is being carried out based on orders on hand, providing solid support for sustained business growth going forward. Among them, the Thailand Production Base is expected to commence production in Q4 2026, providing strong support for overseas business expansion. Investment ThesisThe Company's traditional automotive business is growing steadily and rapidly, while its non-automotive business offers enormous growth potential. We are optimistic about the long-term development of the Company and expect EPS to be 1.81/2.18/2.63 yuan respectively for 2026/2027/2028, a yoy increase of 22%/21%/21%. We offer a target price of 36.3 yuan, respectively 20/16.6/13.8x P/E for 2026/2027/2028, and an "Buy" rating. (Closing price as at 5 June) Historical P/E Band 
Source: Wind, Company, Phillip Securities Hong Kong Research
RiskProgress of new production line is below expectations
Electric vehicle sales fall short of expectations
Macroeconomic downturn affects product demand
Sharply rising raw material prices or sharply falling product prices Financials
(Closing price as at 5 June) Download PDF Version
| Recommendation on 12-6-2026 | | Recommendation | BUY (Initiation) | | Price on Recommendation Date | $ 28.340 | | Suggested purchase price | N/A | | Target Price | $ 36.300 |
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