Executive Summary / Key Takeaways

• Quhuo Limited is undergoing a profound strategic transformation, pivoting from its traditional, lower-margin domestic on-demand delivery services towards higher-value SaaS+ solutions in China and international expansion, particularly in new energy vehicle (NEV) exports and overseas on-demand delivery.
• While overall revenue declined in the first half of 2025 due to the optimization of its on-demand delivery business, the company's newer segments, such as housekeeping and accommodation solutions (SaaS+), demonstrated robust growth, with revenue increasing by 70.8% year-over-year and gross margin reaching 55.2% in H1 2025.
• Quhuo International's vehicle export solutions remain a significant growth driver, with revenue surging 389% year-on-year in the first half of 2024, although the segment experienced a reported slowdown in the latter half of 2024, indicating scaling challenges.
• The company's proprietary technology, including the Quhuo+ platform and the upcoming Carnuxt vehicle export platform, is central to its "collaborative empowerment" strategy, aiming to enhance operational efficiency, ensure quality, and create scalable, higher-margin revenue streams.
• Despite a net loss in the first half of 2024 and liquidity concerns with short-term debt exceeding cash, Quhuo's long-term outlook hinges on the successful execution and scaling of its diversified initiatives and technological differentiators, particularly in the expanding global NEV and domestic homestay markets.

A Gig Economy Pioneer's Strategic Evolution

Quhuo Limited, founded in Beijing in 2012, established itself as a foundational player in China's burgeoning gig economy, primarily by providing on-demand delivery solutions for major platforms like Meituan and Eleme. This initial decade forged the company's core competence in lean operational management and built a nationwide infrastructure network, serving as the bedrock of its business. However, recognizing the inherent low-margin nature and intense competition within this segment, Quhuo embarked on a strategic shift in 2021, aiming to enhance profitability through diversification and technological empowerment.

The Chinese gig economy, a dynamic and rapidly expanding sector, has grown to an estimated value of 3.4 trillion yuan by 2020, with over 200 million workers engaged in gig roles, representing about 25% of the country's workforce. Projections suggest this could encompass 40% of total employment by 2025. This growth, however, has led to increased saturation and intensified competition among platform-based gig workers, often resulting in declining pay rates per task and stricter oversight. Against this backdrop, Quhuo's pivot is a strategic response to both market saturation and the evolving regulatory landscape, which increasingly emphasizes worker protection.

Quhuo's overarching strategy has evolved from a self-operated model to one of "collaborative empowerment." This involves leveraging its accumulated operational and technological expertise to enable small and medium-sized service providers, both domestically and internationally. This strategic reorientation is designed to unlock new, potentially higher-margin revenue streams and establish a more resilient business model.

Technological Bedrock and Innovation Driving Empowerment

At the heart of Quhuo's strategic pivot lies its differentiated technology infrastructure, which serves as a critical competitive advantage. The company's proprietary Quhuo+ platform provides comprehensive training, onboarding logistics, management support, and other value-added services for its extensive network of workers. This technology enables lean management operations and underpins its nationwide infrastructure, ensuring standardized service delivery and operational efficiency.

The SaaS+ service system is another core technological differentiator. This system empowers small and medium-sized localized life service providers by allowing them to utilize Quhuo’s operational systems and service products. This not only helps these partners better meet customer needs but also significantly reduces costs across the supply chain, improves operational efficiency, and generates substantial economic benefits for Quhuo. For instance, the system was initially tested in laundry solutions, linking factories, logistics, and community store owners through an order management system to serve community residents.

In its international expansion, Quhuo is developing Carnuxt, a unique used vehicle export chain platform. This platform is specifically designed to address critical challenges in the international used vehicle trade, such as ensuring transaction authenticity, process transparency, guaranteeing vehicle quality, and providing adequate after-sales services. Carnuxt aims to provide quality assurance for trading partners worldwide, thereby building trust and expanding market opportunities in the global new energy vehicle (NEV) export market.

Furthermore, Quhuo is actively exploring the integration of Artificial Intelligence (AI) into its operations. AI is slated to enhance the efficiency of worker training and recruitment. In the B&B business, AI technology is expected to assist operators with online information maintenance, intelligent check-in, and self-checkout processes for travelers. These technological advancements collectively contribute to Quhuo's competitive moat by enabling greater efficiency, scalability, and quality control across its diverse service offerings, positioning the company to capture higher-value segments.

The Strategic Pivot: Diversifying for Growth

Quhuo's transformation is evident across its business segments, each playing a distinct role in the company's evolving narrative.

On-Demand Delivery Solutions: Optimizing the Cornerstone

Historically, on-demand delivery has been Quhuo's cornerstone, but it faces significant headwinds from intensified competition and rising costs in China's food delivery market. In the first half of 2024, revenue from on-demand delivery solutions decreased by 9.1% year-on-year to RMB 1,499.1 million, primarily due to the company's strategic decision to optimize its business by disposing of several inferior service districts. This trend continued into the first half of 2025, contributing to a 30.2% decline in total revenue to RMB 1,131.4 million.

Quhuo is actively repurposing its delivery infrastructure for higher-value uses, shifting from a fulfillment service provider to a supply chain enabler. This includes a partnership with JD.com for on-demand delivery services in select cities and a strategic collaboration with NIU World, a local food group, to launch an innovative fresh beef chain brand incubation platform. This latter initiative, which generated approximately RMB14.4 million in revenue since May 2025, aims to create a vertically integrated supply chain ecosystem for fresh beef. Management anticipates that this new model will drive revenue growth in 2025 and expand into other highly perishable food segments, with economies of scale and profitability expected to materialize in the second half of 2025.

Mobility Service Solutions: International Expansion as a New Engine

The Mobility Service Solutions segment, encompassing shared-bike maintenance, ride-hailing, and vehicle export solutions, has emerged as a key "dual engine" for Quhuo's second growth curve. In the first half of 2024, this segment saw a remarkable 71.7% year-on-year revenue increase to RMB 100.5 million. This growth was predominantly driven by the international vehicle export solutions, which surged 389% year-on-year, successfully exporting 815 new energy vehicles overseas and generating RMB 58.6 million in revenue.

Quhuo possesses a unique competitive advantage in NEV exports, stemming from over five years of ride-hailing operations experience and more than two decades in vehicle trading. This expertise has fostered deep market understanding, a national-wide vehicle sourcing network, robust refurbishment resources, and close cooperation with 58 overseas distributors globally. China's NEV exports are booming, with 1.2 million units exported in 2023 (a 77.6% YoY increase) and surpassing 2 million units in 2024, accounting for over 60% of global production and sales. This trend provides vast opportunities for Quhuo's international market expansion.

For the second half of 2024, Quhuo International entered "Phase 2" of its development, focusing on innovating its overseas business model, redefining partner roles, and unifying long-term profit-sharing mechanisms to accelerate revenue and profit growth. The company is also piloting technology empowerment projects in overseas markets, including on-demand delivery and ride-hailing system development, with plans to expand into Southeast Asia and the Middle East in 2024 and achieve business implementation in more than five new countries by 2025. While the vehicle export business reportedly stalled in the second half of 2024, shipping 3,500 vehicles overseas compared to 1,900 in the full year 2023, management maintains expectations for increased revenue and shipments, focusing on building sustainable infrastructure for car inspections, reconditioning, and customs clearance.

Housekeeping and Accommodation Solutions: High-Margin SaaS+ Growth

The Housekeeping and Accommodation Solutions segment, operating under a SaaS+ service empowerment model, is demonstrating strong profitability improvements. Despite a 27.8% year-on-year revenue decrease to RMB 20.4 million in the first half of 2024, primarily due to a business model transition in hotel services, the segment's gross profit increased by 28.5% year-on-year, and its gross margin rose significantly from 13.8% to 24.6%. This robust profitability continued into the first half of 2025, where the segment delivered a 70.8% year-over-year revenue increase and a 63.4% rise in gross profit, becoming a major driver of the company's earnings mix. The Chengtu homestay business within this segment saw revenue grow 83.6% year-over-year in H1 2025, achieving an impressive gross margin of 55.2%.

The segment's service coverage expanded to 132 cities in H1 2024, a 21.4% increase year-on-year, reflecting strong market demand and operational efficiency. Quhuo is actively developing its self-operated homestay model and exploring a comprehensive Chengtu model covering the entire process from booking to after-sales. The company is also collaborating with a leading long-term rental platform in China to revitalize idle properties through a combined short-term and long-term rental model. Furthermore, Quhuo plans to expand its SaaS+ services into broader areas such as elderly care and medical services, capitalizing on China's aging population and the government's focus on high-quality housing.

Financial Performance: A Mixed Picture of Transition

Quhuo's financial performance reflects a company in the midst of a significant strategic overhaul. Total revenue decreased by 6.7% from RMB 1,736.3 million in the first half of 2023 to RMB 1,619.9 million in the first half of 2024. For the full year 2024, total revenue was RMB 3,046.9 million, a 17.7% decrease from 2023, primarily due to the disposal of underperforming service stations in the on-demand delivery segment. This decline continued into the first half of 2025, with total revenue decreasing by 30.2% to RMB 1,131.4 million.

Despite the revenue contraction, there are signs of improving profitability in key areas. The company's gross margin rebounded to 5.6% in the second quarter of 2024, surpassing the previous year's performance. In the second half of 2024, gross profit margins improved across several segments: shared-bike maintenance increased by 15.7%, ride-hailing services by 216.9%, vehicle export solutions from 1.8% to 6.2%, and housekeeping and accommodation solutions from 26.4% to 36.4%. The housekeeping segment's gross margin further soared to 55.2% in H1 2025.

Cost control initiatives have also yielded results, with general and administrative expenses decreasing by 13.2% year-on-year in H1 2024, driven by reductions in professional service fees, welfare and business development expenses, and the absence of share-based compensation. Research and development expenses also decreased by 25.7% in H1 2024 due to team restructuring.

However, the company reported a net loss of RMB 46.5 million in the first half of 2024, compared to a net loss of RMB 5.7 million in the first half of 2023. Adjusted net loss was RMB 46.5 million, and adjusted EBITDA loss was RMB 34.8 million in H1 2024. The EBITDA loss widened to RMB60.2 million in H1 2025. Encouragingly, Quhuo achieved positive adjusted EBITDA for the full year 2024, reaching RMB 9.07 million, marking its third consecutive year of positive EBITDA, demonstrating persistent operational profitability despite revenue fluctuations.

In terms of liquidity, as of June 30, 2024, Quhuo held RMB 104.9 million in cash, short-term investments, and restricted cash against RMB 104.2 million in short-term debt. By December 31, 2024, cash, cash equivalents, and restricted cash had decreased to RMB 65.1 million (US$8.9 million), while short-term debt increased to RMB 112.8 million (US$15.5 million), indicating a tightening liquidity position that warrants close monitoring. The company's business model is characterized by a "very short payback period, with an average payback period of about 12 months," which could aid in managing working capital.

Competitive Landscape and Positioning

Quhuo operates in a highly competitive environment, particularly in its core on-demand delivery segment, where it faces significant headwinds from dominant players like Meituan (MPNGF) and Alibaba (BABA) (through Ele.me), as well as new entrants like JD.com (JD). These larger competitors benefit from extensive user networks, strong brand recognition, and diversified ecosystems, often leading to greater scale, innovation speed, and financial resilience. Quhuo's gross profit margin of 1.53% (TTM) and negative net profit margin of -3.24% (TTM) underscore the challenges compared to a competitor like Didi (DIDI), which reported a gross profit margin of 0.18 (18%) and a net profit margin of 0.0061 (0.61%) in 2024, albeit with different business models.

Quhuo's strategic response is to carve out a niche as a specialized backend service provider rather than a direct consumer platform. Its competitive advantages lie in its operational efficiency, customization capabilities, and cost structure for specialized services, particularly through its Quhuo+ and SaaS+ technologies. For instance, its unique competitive advantage in NEV exports, built on decades of experience and a global distribution network of 58 overseas distributors, differentiates it from general traders. This focus allows Quhuo to offer tailored solutions for blue-chip clients and local service providers, potentially leading to stronger client retention and higher margins in specific segments.

However, Quhuo's smaller scale and dependence on the Chinese market for its foundational business expose it to regulatory risks and make it more vulnerable to economic downturns compared to its larger, more diversified rivals. The company's recent ADS ratio change (1-for-90 reverse split) also reflects efforts to manage its public market presence amidst these dynamics.

Outlook and Strategic Execution

Quhuo's management is focused on a dual-track strategy: optimizing its on-demand delivery solutions while accelerating the expansion of its housekeeping and accommodation solutions and international ventures. The outlook for Quhuo International is particularly ambitious, with management expecting "considerable growth potential in our vehicle export business, with expectations for increased revenue and shipments." The "Phase 2" development in the second half of 2024 aims to redefine partner roles and unify profit-sharing mechanisms to drive faster growth. Overseas technology initiatives, including on-demand delivery and ride-hailing services, are being piloted in select international cities, with a target to achieve business implementation in more than five new countries by 2025, focusing on Southeast Asia and the Middle East.

Domestically, the housekeeping and accommodation segment is poised for further growth, with "upcoming partnerships with leading long-term rental platforms" expected to expand its reach. The new fresh beef chain brand incubation platform, following a successful pilot, is also expected to drive revenue growth in the on-demand delivery business in 2025. Management's long-term vision emphasizes optimizing operational models, seizing new market opportunities, and delivering sustainable returns for shareholders while creating societal value through employment.

Conclusion

Quhuo Limited stands at a pivotal juncture, transforming from a traditional gig economy platform into a diversified service provider driven by technological empowerment and global ambitions. While the company faces the inherent challenges of a complex global economy and intense competition in its legacy on-demand delivery segment, its strategic pivot towards higher-margin SaaS+ services and international NEV exports presents compelling growth avenues. The robust performance of its housekeeping and accommodation solutions, coupled with the significant potential of its vehicle export business, underscores the viability of its diversification strategy.

The success of Quhuo's transformation hinges on its ability to effectively scale its new ventures, particularly Quhuo International and its SaaS+ offerings, while prudently managing its liquidity. The company's proprietary technology, including Quhuo+ and the Carnuxt platform, provides a foundational competitive edge, enabling efficient operations and quality assurance crucial for long-term value creation. Investors should closely monitor the execution of its international expansion, the continued profitability of its SaaS+ segments, and its ability to navigate the competitive pressures and liquidity constraints to fully realize the potential of its strategic reimagining.