CAOCAO INC jumps 5.5% on plan to launch independent AI division

CAOCAO INC (02643.HK) plans to establish an independent AI division as it pivots from a mobile internet company to an AI-native business, sending its stock up 5.5% to HKD 31.72.

"CAOCAO INC plans to establish an independent AI division to comprehensively advance the implementation of its AI strategy and complete a critical transformation from a mobile internet company to an AI-native company," according to a report by STAR Market Daily citing people familiar with the matter.

The stock rose 5.5% to HKD 31.72 on Monday, with 3.67 million shares changing hands for HKD 117 million in total turnover. The company has posted a Chief AI Officer position on recruitment platforms, with responsibilities including formulating AI strategies and technical roadmaps, building core AI capability systems, and promoting full-chain AI integration across its businesses.

The restructuring marks a major strategic pivot for the ride-hailing and mobility company as Chinese tech firms race to embed AI into their core operations. The appointment of a dedicated AI chief suggests the company is committing meaningful resources to in-house AI capabilities rather than relying solely on third-party models, which could drive further institutional interest in the stock.

The move comes as Chinese technology companies accelerate AI investments amid a global boom in generative AI. Hyperscalers including Google, Microsoft, Amazon and Meta Platforms are expected to increase capital spending 63% to $670 billion this year, according to the Wall Street Journal, creating a powerful tailwind for companies positioning themselves as AI-native.

For CAOCAO, the transition represents a bet that its mobility data and user base can be used for AI-driven services. The company did not disclose a timeline for the AI division's launch or a budget for the initiative.

CAOCAO shares trade at a discount to Hong Kong-listed AI plays such as Baidu (9888.HK) and Tencent (0700.HK), which have already articulated AI monetization strategies. If the company successfully executes its AI pivot, the stock could see a re-rating as investors assign it a multiple closer to AI-native peers. However, the strategy remains in early stages with no disclosed revenue targets or product roadmap.

This article is for informational purposes only and does not constitute investment advice.