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Likes Received【HK IPO】Horizon Robotics-W, China's largest advanced driver assistance system provider
Horizon Robotics is a market-leading provider of advanced driver-assistance systems ("ADAS") and high-level autonomous driving ("AD") solutions for passenger vehicles, with proprietary software and hardware technologies. Our solutions integrate algorithms, specialized software, and processing hardware to deliver core technologies for advanced driver-assistance and high-level autonomous driving, thereby enhancing the safety and experience of drivers and passengers. Leveraging our large-scale deployment of integrated software-hardware solutions, we have become a key enabler of the transformation and commercialization of smart vehicles.
The company will begin its IPO on October 16, with an offer price range of HKD 3.73~3.99 per share, 600 shares per lot, a minimum subscription of HKD 2,418.14, a market capitalization of HKD 48.601~51.989 billion, and an issuance of 1.355 billion shares. It belongs to the autonomous driving industry and has a greenshoe option.
The sponsors are Goldman Sachs Asia, Morgan Stanley, and China Securities (CSC Financial). The sponsors' overall track record is quite solid. Goldman Sachs has an 80% first-day gain rate for projects it sponsored in the past two years, Morgan Stanley has a 64.28% first-day gain rate, and CSC Financial has a 66.66% first-day gain rate.
There are four cornerstone investors: Alibaba, Baidu, PARTICIPATIONS 1, and Ningbo Yongning Gaoxin SP. Based on the median offer price, cornerstone investors account for 32.64% of the offering, which is an average proportion.
The company is the only Chinese firm among the top five providers of advanced driver-assistance and high-level autonomous driving solutions in China. According to data from CIC, based on solution installations in 2023 and the first half of 2024, we are the second-largest and largest provider of advanced driver-assistance solutions for domestic OEMs, with market shares of 21.3% and 35.9%, respectively. Based on total solution installations in 2023 and the first half of 2024, we are also the fourth-largest and largest provider of advanced driver-assistance and high-level autonomous driving solutions in China, with market shares of 9.3% and 15.4%, respectively.
The company's revenue from 2021 to 2023 was HKD 467 million, HKD 906 million, and HKD 1.552 billion, respectively, with a 71.32% year-on-year growth in 2023. Net losses from 2021 to 2023 were HKD -2.064 billion, HKD -8.72 billion, and HKD -6.739 billion, respectively, with a 22.72% narrowing of losses year-on-year in 2023.
Based on the median offer price, the market capitalization is HKD 50.295 billion, with an issuance of HKD 5.23 billion, representing 10.4% of the total. With cornerstone investors locking up 32.64%, the remaining float is HKD 3.523 billion, which is quite large.
The company completed 11 rounds of financing before going public. The cost per share for investors in the last round was USD 0.7415, equivalent to HKD 5.76, while the IPO price range is HKD 3.73~3.99. This makes the IPO price seem relatively cheap.
The current subscription multiple is 0.71x, indicating insufficient demand. Investor interest is currently low, but with four days left in the subscription period, it is expected to improve.
Subscription Strategy:
Horizon Robotics is China's largest provider of advanced driver-assistance solutions, with a 35.9% market share. The sponsors have a solid track record, and there are four cornerstone investors, including Alibaba and Baidu, accounting for 32.64% of the offering—an average proportion. The company's revenue has been growing rapidly year after year, but it remains loss-making, though losses narrowed in 2023. Based on the median offer price, the market capitalization is HKD 50.295 billion, with an issuance of HKD 5.23 billion and cornerstone investors locking up 32.64%, leaving a float of HKD 3.523 billion, which is quite large. However, pre-IPO investors' last-round cost was higher than the IPO price range. Current subscription interest is weak, so I plan to monitor demand before deciding. If there's no clawback, I might subscribe for one or two lots at most.
My views are personal and do not constitute investment advice. The stock market carries risks; invest with caution!
Follow me: Small Investor Lao Yu
$HORIZONROBOT-W(09660.HK)
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