CAOCAO INC (02643) Mid-Year Report: Fundamentals Continue to Solidify, Internationalization Accelerates, and the Potential of RoboX under a Comprehensive Closed Loop is Expected to be Realized.

Just disclosing its interim results for the fiscal year 2026, CAOCAO INC (02643) is at a critical window for its next leap. From an operational performance perspective, CAOCAO INC exhibits significant structural highlights. In the first half of this year, the companys revenue reached 10.3 billion yuan, a year-on-year increase of 9%; GTV reached 12.4 billion yuan, a year-on-year growth of 13.6%; and the gross profit margin improved from 8.7% in the same period last year to 9.0%, indicating further enhancements in profitability. Even more significant is that CAOCAO INC officially launched a comprehensive AI transformation in the first half of this year, unveiling its RoboX strategy, and upgrading its positioning to become a global leader in physical AI mobile technology platforms. This strategic pivot reflects the companys precise judgment on the shift in the competitive focus of the mobility industry towards system capability competition. GMTEight believes that CAOCAO INC's interim results, embodying a dual narrative of now and future, not only validate current operational quality but also provide an important window for understanding the companys long-term growth logic. Strengthening Fundamentals During the AI Transformation Process Despite being in a strategic transition phase, CAOCAO INC's fundamentals continue to strengthen, as evidenced by the interim report. As of June 30, CAOCAO INC's services covered 215 cities across the country, with 20 new cities added in the first half of the year. The continuous expansion of the service network has directly driven synchronized growth in both platform users and operational capacity. During this period, the platform averaged 44.6 million monthly active users, a year-on-year increase of 17.1%, while the average monthly active drivers reached 758,000, up 36.8%. This synchronous growth in supply and demand provides a solid order foundation for the company's steady business expansion. The continued improvement in profitability is the most convincing aspect of this interim report. In the first half of the year, CAOCAO INC's gross profit margin was 9%, showing a year-on-year increase, supported by two clear paths: first, a decrease in marginal costs due to business scale expansion, and enhanced brand recognition effectively lowering user acquisition costs; second, the transaction engine, CAOCAO Brain, consistently employs AI technology to optimize algorithms, simultaneously enhancing efficiency in driver scheduling and user operations. Thus, its evident that CAOCAO INC's improvement in profitability does not rely on a single cost-cutting measure but is built on systematic enhancements in operational efficiency. Moreover, the company operates more than 38,000 customized vehicles in 31 cities, the largest fleet of its kind domestically, with the total cost of ownership (TCO) for the customized vehicles reduced by approximately 36.4% compared to typical pure electric vehicles; furthermore, leveraging Geely's ecosystem with 448 battery swap stations enables a rapid 60-second battery swap, reducing maintenance time and costs by 25% and 54%, respectively. These structural advantages on the cost side also support the strengthening of profitability. Accelerated Implementation of the RoboX Strategy and Expansion of International Business More long-term meaningful changes are accelerating at the strategic level. In terms of AI initiatives, CAOCAO INC established an AI division and an AI Innovation Center in the first half of the year, with Turing Award winner Joseph Sifakis serving as Chief Scientific Advisor; as one of the first partners in the mobility industry, CAOCAO INC also joined the Doubao AI ecosystem and launched an AI taxi service in collaboration with Doubao in June, conducting a gray-scale pilot. From organizational setup to ecosystem collaboration, AI is becoming the core tool for CAOCAO INC to optimize user experience and enhance commercial efficiency. In RoboX operations, the commercialization process is also accelerating. During the reporting period, CAOCAO INC deployed 140 second-generation Robotaxis; China's first native RobotaxiEva Cabdebuted in April, with the company deeply involved in product definition and development, aiming for mass production in 2027. On the international front, CAOCAO INC has targeted Hong Kong and the UAE as its first key markets and will deploy a Robotaxi fleet in Hong Kong; in June, CAOCAO INC also signed a strategic partnership with local partner K2 in Abu Dhabi to jointly promote the Robotaxi project. Given that the core economics of RoboX lie in replacing human labor and enhancing vehicle utilization, the higher labor costs in overseas markets will amplify this characteristic, suggesting that CAOCAO INC has substantial room for expansion in international markets. Strategic Elevation Enhances Growth Visibility From an industry perspective, the autonomous driving mobility sector is transitioning from technological validation to a critical phase of scaled implementation, with autonomous driving technology paths gradually converging, and leading companies in the sector have initially developed cross-scenario platform capabilities. CAOCAO INCs decision to launch a comprehensive AI transformation at this time will further reinforce its existing capabilities. Regarding competitive barriers, CAOCAO INC's core advantage lies in its comprehensive closed-loop capability. The fleet of 38,000 customized vehicles provides a scalable hardware foundation, and deep collaboration with Geely's ecosystem effectively connects the technological chains from manufacturing to autonomous driving, while 11 years of operational experience has accumulated scene data and scheduling capacity. The combination of these three elements indicates that CAOCAO INC's RoboX initiative is built upon the systematic release of its existing capabilities. Additionally, in terms of planning, CAOCAO INC's strategic path is already quite clear. The company plans to cumulatively deploy 100,000 Robotaxis by 2030, currently in the second phase of its three-step strategy, which aims to complete the transition from a safety driver to unmanned operations and to explore mixed operations of human-driven and unmanned vehicles; as conditions become more favorable in the future, the company will initiate large-scale operations globally with the native developed Robotaxi models. Looking back at CAOCAO INC's interim report, the companys fundamentals are in a positive trajectory of simultaneously advancing scale expansion and profit improvement, while the accelerated development of the AI and RoboX strategic trajectories opens up a more imaginative growth space. While the market's perception of CAOCAO INC still lingers on its role as a mobility service provider, the new outline of its physical AI mobile technology platform has already begun to take shape. For investors, the significance of this interim report lies in the fact that CAOCAO INC has secured a position ahead of the industry transformations next phase, and the company's value reassessment is poised to take place.