Cheche Group (CCG) AI Stock Analysis

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Cheche Group

(NASDAQ:CCG)

Rating:49Neutral

Price Target:―

Cheche Group is on a path of gradual improvement, supported by revenue growth and stable debt management. However, significant challenges remain in achieving profitability and improving cash flow. The technical analysis suggests a bearish trend, and the valuation metrics indicate potential risk due to current unprofitability. These factors contribute to a cautious outlook with a moderate overall stock score.

Positive Factors

Government Policies

Regulatory support from the Chinese government, requiring digital solutions for insurers and brokers, enhances market environment and opportunities for Cheche Group.

Partnerships

Cheche Group's partnerships with major new energy vehicle companies like Volkswagen and NIO help secure higher margins and strengthen its market position.

Profitability

Cheche Group Inc. experienced its first GAAP profitable quarter.

Negative Factors

Revenue Growth

Management reiterated guidance for net revenue growth and total written premium growth, with 4Q implied revenue growth at 28% year-over-year at the midpoint, but high expectations can lead to pressure on performance.

Stock Buyback

Management plans to authorize a stock buyback upon board approval, which might raise concerns about future cash allocation.

Cheche Group (CCG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$68.59M

Dividend YieldN/A

Average Volume (3M)247.24K

Price to Earnings (P/E)―

Beta (1Y)0.51

Revenue Growth105.31%

EPS Growth95.66%

CountryUS

Employees548

SectorCommunication Services

Sector Strength81

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-0.11

Shares Outstanding65,045,110

10 Day Avg. Volume183,257

30 Day Avg. Volume247,238

Financial Highlights & Ratios

PEG Ratio-0.14

Price to Book (P/B)1.73

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.00

Price Target Upside257.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Cheche Group Business Overview & Revenue Model

Company DescriptionCheche Group (CCG) operates in the insurance technology sector, offering digital insurance platforms and services. The company provides innovative solutions that streamline the insurance purchasing process, enhance customer experience, and improve operational efficiency for insurers. CCG's core products include digital tools and platforms that facilitate the distribution and management of various insurance products.

How the Company Makes MoneyCheche Group makes money primarily through its digital insurance platforms, which generate revenue by charging fees or commissions on the insurance policies sold via their systems. The company collaborates with a network of insurance providers, leveraging partnerships to offer a wide range of insurance products through its platforms. Additionally, CCG may earn revenue from providing technology solutions and services to insurance companies, helping them improve their digital capabilities and customer engagement. Significant partnerships with insurers and technology firms likely contribute to its earnings by expanding its market reach and enhancing its product offerings.

Cheche Group Financial Statement Overview

Summary

Cheche Group shows robust revenue growth but struggles with profitability and cash flow management. The balance sheet indicates improved stability, yet negative margins and cash flow issues highlight the need for operational improvements.

Income Statement

Negative

Cheche Group has shown a notable revenue growth of 23.3% in the latest year, with total revenues increasing from $2.68 billion to $3.30 billion. However, the company is struggling with profitability as evidenced by a negative net profit margin of -4.83% and a declining gross profit margin of 4.25%. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Overall, while revenue growth is strong, profitability remains a significant challenge.

Balance Sheet

Neutral

The balance sheet shows a positive equity turnaround from negative in 2022 to $378 million in 2023, indicating improved financial stability. The debt-to-equity ratio stands at 0.08, suggesting low leverage. However, the equity ratio is 42.3%, which is moderately strong but indicates reliance on liabilities. Return on Equity is negative due to net losses, reflecting the company's struggle to generate shareholder returns. Overall, the balance sheet shows improved stability but ongoing profitability issues.

Cash Flow

Negative

Cheche Group's cash flow statement reveals negative free cash flow of $27.5 million, though this is an improvement from the previous year. The operating cash flow to net income ratio is 0.17, indicating a weak cash conversion from earnings. Free cash flow to net income ratio remains negative, highlighting ongoing liquidity challenges. Overall, while there are slight improvements in free cash flow, cash flow management remains a concern.

TTM	Dec 2023	Dec 2022	Dec 2021
Breakdown
Income Statement		Total Revenue
773.93M	3.30B	2.68B	1.74B
	Gross Profit
47.06M	140.22M	142.31M	80.81M
	EBIT
-5.22M	-167.78M	-115.95M	-155.71M
	EBITDA
-5.22M	-146.95M	-76.83M	-125.61M
	Net Income Common Stockholders
-2.14M	-159.59M	-91.02M	-146.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
149.77M	264.87M	149.77M	426.14M
	Total Assets
712.50M	893.98M	712.50M	868.56M
	Total Debt
13.90M	29.35M	13.90M	36.67M
	Net Debt
-101.04M	-214.04M	-101.04M	-325.72M
	Total Liabilities
1.97B	515.79M	1.97B	1.87B
	Stockholders Equity
-1.26B	378.18M	-1.26B	-1.01B
Cash Flow		Free Cash Flow
―	-27.50M	-160.10M	-189.22M
	Operating Cash Flow
―	-26.95M	-158.86M	-187.59M
	Investing Cash Flow
―	12.82M	27.69M	-65.33M
	Financing Cash Flow
―	140.34M	-159.04M	583.67M

Cheche Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.84

Price Trends

50DMA

0.89

Negative

100DMA

0.92

Negative

200DMA

0.88

Negative

Market Momentum

MACD

-0.02

Positive

RSI

44.45

Neutral

STOCH

36.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCG, the sentiment is Negative. The current price of 0.84 is below the 20-day moving average (MA) of 0.85, below the 50-day MA of 0.89, and below the 200-day MA of 0.88, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 44.45 is Neutral, neither overbought nor oversold. The STOCH value of 36.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCG.

Cheche Group Risk Analysis

Cheche Group disclosed 85 risk factors in its most recent earnings report. Cheche Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Our Warrants may never be in the money, and they may expire worthless. Q4, 2023

Cheche Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$14.06B	6.51	-3.76%	3.69%	2.48%	-35.40%
MNY	56 Neutral	$31.11M	―	-60.26%	―	345.36%	-650.95%
PODC	52 Neutral	$53.28M	―	-36.00%	―	22.98%	69.10%
SEAT	52 Neutral	$395.66M	25.25	-1.00%	―	0.82%	-102.72%
CCG	49 Neutral	$68.59M	―	-16.65%	―	105.31%	95.66%
BODI	40 Underperform	$25.78M	―	-130.56%	―	-26.11%	57.68%
GIFT	35 Underperform	$54.56M	―	-81.15%	―	2.05%	-171.14%

* Communication Services Sector Average

Performance Comparison

CCG

Cheche Group

0.82

-0.68

-45.33%

GIFT

RDE

1.83

-2.01

-52.34%

SEAT

Vivid Seats

1.87

-3.23

-63.33%

MNY

MoneyHero Limited

0.72

-1.49

-67.42%

BODI

Beachbody Company

3.77

-4.95

-56.77%

PODC

Courtside Group Inc

2.01

0.22

12.29%

Cheche Group Earnings Call Summary

Earnings Call Date:Mar 28, 2025

(Q3-2024)

% Change Since: -28.81%|

Next Earnings Date:May 29, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive outlook for Cheche Group, highlighting its recent profitability, strong growth in the NEV sector, and successful expansion of partnerships. Despite some challenges related to lower commission rates and high claims ratios in NEV insurance, the company's strategic focus and cost reductions have led to substantial improvements.

Q3-2024 Updates

Positive Updates

Profitable Inflection Point

Cheche achieved profitability in Q3 2024, with net income turning positive for the first time, recording RMB 4.1 million or USD 0.6 million compared to a RMB 55.4 million loss in Q3 2023.

Strong Growth in NEV Sector

NEV gross premiums grew 120% year-over-year to USD 126 million, and the number of embedded policies sold increased by 140% year-over-year to 292,000 policies.

Partnership Expansion

Cheche signed an agreement with Tokio Marine's Chinese subsidiary, marking its first collaboration with a foreign insurer and expanding service capabilities.

Reduction in Expenses

Selling and marketing expenses dropped by 53.6% to RMB 18.1 million, and general and administrative expenses decreased by 41.4% to RMB 20.4 million year-over-year.

Negative Updates

Lower NEV Insurance Commission Rates

Insurance policies on NEVs currently enjoy lower commission rates than ICEs due to reduced profitability for insurance carriers.

High Claims Ratio in NEV Insurance

NEV insurance continues to experience high claims ratios, posing challenges for profitability in this segment.

Company Guidance

During the Cheche Group's Q3 2024 earnings call, the company reaffirmed its full-year guidance, projecting net revenues between RMB 3.5 billion and RMB 3.7 billion, marking an increase of 6.1% to 12.1% compared to 2023. Total written premiums are expected to range from RMB 24.5 billion to RMB 26.5 billion, representing an 8.4% to 17.3% growth over the previous year. Cheche reported a significant milestone of achieving profitability this quarter, with net income of RMB 4.1 million, a notable turnaround from a RMB 55.4 million loss in Q3 2023. Additionally, NEV gross premiums saw a 120% increase to USD 126 million year-over-year, with embedded policies rising 140% to 200,000. These metrics reflect Cheche's strategic focus on NEV insurance, partnerships with 14 NEV manufacturers, and expansion into new markets like Southeast Asia and the Middle East.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.