Stock Analysis & Valuation Chenqi Technology Limited (9680.HK)

• Previous Close: HK$8.76
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, HK$	Upside, %
Artificial intelligence (AI)	20.80	137
Intrinsic value (DCF)	2050.13	23303
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Chenqi Technology Limited is a pioneering mobility technology and service company headquartered in Guangzhou, China, operating at the intersection of transportation and technology. Founded in 2019, the company has established a comprehensive ecosystem spanning three core segments: Mobility Services (including ride-hailing, Robotaxi, and hitch services), Technology Services (AI data solutions, high-definition mapping, and smart transportation), and Fleet Management (vehicle maintenance, EV charging, and vehicle sales). Serving diverse clients from corporate customers and automobile OEMs to autonomous driving solution providers, Chenqi Technology leverages China's massive mobility market while positioning itself as an integrated solutions provider. As the transportation sector undergoes rapid digital transformation and electrification, Chenqi's multi-faceted approach addresses the evolving needs of both service providers and end-users in one of the world's largest automotive markets. The company's listing on the Hong Kong Stock Exchange provides investors with exposure to China's growing mobility-as-a-service and autonomous vehicle technology sectors.

Investment Summary

Chenqi Technology presents a high-risk, high-potential investment opportunity in China's rapidly evolving mobility sector. The company's negative net income of HKD -564 million and negative operating cash flow of HKD -530 million for FY 2024 indicate significant ongoing investment in growth and technology development, typical for early-stage mobility tech companies. With a beta of 2.25, the stock exhibits high volatility relative to the market. The substantial cash position of HKD 1.02 billion provides runway for continued operations and expansion, while relatively low debt of HKD 38.9 million suggests manageable financial leverage. Investors should weigh the company's positioning in China's massive mobility market against its current lack of profitability and the competitive intensity of the ride-hailing and autonomous vehicle technology spaces. The absence of dividends reinforces the growth-focused nature of the investment.

Competitive Analysis

Chenqi Technology operates in a highly competitive landscape dominated by well-established players with significantly greater scale and resources. The company's strategy of integrating mobility services with technology solutions and fleet management creates a differentiated ecosystem approach, but execution risks remain substantial. In the ride-hailing segment, Chenqi faces intense competition from giants like Didi, which controls the majority of China's market share. The Robotaxi and autonomous driving technology segments require massive R&D investment where companies like Baidu Apollo and Pony.ai have established leadership. Chenqi's technology services business, including AI data solutions and high-definition mapping, competes with specialized technology providers and automotive OEMs developing in-house capabilities. The company's relatively small scale (HKD 2.46 billion revenue) compared to industry leaders limits its ability to achieve economies of scale in customer acquisition and technology development. However, its integrated approach—combining service delivery with technology enablement—could provide competitive advantages in serving enterprise clients seeking comprehensive mobility solutions. Success will depend on execution excellence, strategic partnerships, and the ability to differentiate in specific niche markets rather than competing head-to-head with industry giants across all segments.

Major Competitors

• Didi Global Inc. (DIDIY): Didi dominates China's ride-hailing market with approximately 90% market share, giving it unparalleled scale, network effects, and brand recognition. The company's massive user base and driver network create significant barriers to entry for smaller players like Chenqi. However, Didi has faced regulatory challenges in China that have created opportunities for competitors. Didi's strengths include its extensive data collection capabilities, established technology platform, and diversified service offerings. Weaknesses include regulatory scrutiny and the capital-intensive nature of maintaining market dominance across multiple transportation segments.
• Baidu, Inc. (BIDU): Baidu's Apollo autonomous driving platform represents a major competitive threat in Chenqi's Robotaxi and technology services segments. Baidu possesses superior financial resources, AI expertise, and mapping capabilities through its Baidu Maps division. The company's partnerships with multiple automakers and local governments give it significant advantages in deploying autonomous vehicle technology. However, Baidu's primary focus remains on search and AI rather than mobility services, potentially creating opportunities for specialized players. Baidu's strengths include its technology infrastructure, R&D capabilities, and existing mapping data, while weaknesses include less focus on operational mobility services compared to pure-play companies.
• Pony.ai (PONY): As a specialized autonomous vehicle technology company, Pony.ai competes directly with Chenqi's Robotaxi and technology services segments. Pony.ai has established partnerships with major automakers and has deployed autonomous vehicles in multiple Chinese cities. The company's focused approach on autonomous driving technology gives it technical depth that broader mobility companies may lack. However, as a private company, Pony.ai faces funding challenges and lacks the integrated mobility service platform that Chenqi offers. Pony.ai's strengths include its technical expertise and strategic partnerships, while weaknesses include limited diversification and dependence on continued funding rounds.
• T3 Mobility (T3): Backed by major state-owned automakers including FAW, Dongfeng, and Changan, T3 Mobility represents significant competition in the ride-hailing and fleet management segments. The company benefits from automotive manufacturing expertise, vehicle supply advantages, and government connections. T3's integrated approach combining vehicle manufacturing with mobility services mirrors Chenqi's strategy but with substantially greater automotive industry backing. However, T3 may lack the technology focus and innovation speed of more agile competitors. Strengths include automotive industry partnerships and manufacturing expertise, while weaknesses include potentially slower innovation cycles and less focus on pure technology services.
• China Automotive Systems, Inc. (CAAS): While primarily an automotive components manufacturer, China Automotive Systems competes in the smart transportation and technology solutions space that overlaps with Chenqi's technology services segment. The company's expertise in automotive electronics and steering systems provides foundational technology for autonomous vehicles. However, CAAS lacks the comprehensive mobility service platform and direct consumer relationships that Chenqi has developed. CAAS's strengths include automotive manufacturing expertise and established OEM relationships, while weaknesses include limited presence in mobility services and less developed AI/data capabilities compared to technology-focused competitors.