Investment Rating - The investment rating for the company is "Outperform the Market" [2][4][18] Core Viewpoints - The company is a leader in autonomous driving solutions, with the launch of the Horizon Journey 6 series, which covers all levels of intelligent driving applications. The series includes six versions tailored for different driving scenarios, providing optimal performance and cost solutions [3][4][5] - The demand for the Horizon series chips is strong, with a robust order book, indicating high growth potential for future performance. The company is positioned as a rare player in the domestic intelligent driving chip market, with significant industry growth opportunities [4][18] - The company expects revenue growth from 22.55 billion CNY in 2024 to 53.42 billion CNY in 2026, with net profits projected to improve from -64 million CNY in 2024 to -3.41 million CNY in 2026 [4][18] Summary by Sections Product Launch and Features - The Horizon Journey 6 series includes models such as Journey 6B, 6M, 6E, and 6P, designed for low, mid, and high-level intelligent driving markets, respectively. The series aims to redefine active safety and enhance driving experiences across various scenarios [3][4][8] - As of January 2025, over 7 million units of the Horizon Journey series have been shipped, with expectations to surpass 10 million units soon. The series has been selected by over 20 automotive brands, supporting more than 100 models with mid to high-level intelligent driving features [3][4][15] Market Position and Growth Potential - The company is recognized as the leading domestic intelligent driving chip manufacturer, with a complete and mature product matrix covering L1 to L4 autonomous driving levels. This positions the company as a preferred partner for many automotive brands and Tier 1 suppliers [4][18] - The company is set to benefit from the growing demand for intelligent driving solutions, with a focus on high integration, low power consumption, and cost efficiency in its products [4][8] Financial Projections - Revenue projections for 2024, 2025, and 2026 are 22.55 billion CNY, 33.89 billion CNY, and 53.42 billion CNY, respectively. The net profit is expected to improve from -64 million CNY in 2024 to -3.41 million CNY in 2026, indicating a path towards profitability [4][18][22]

Investment Rating - The report initiates coverage with an "Outperform" rating and a target price of HKD 12.3 per share [2][21][28] Core Views - The company is positioned to benefit from the rapid expansion of the intelligent driving industry, the increasing market share of domestic intelligent driving chips, and the launch of the SuperDrive product to enter the high-end market [21][28] - Revenue projections for 2024-2026 are Rmb 2.198 billion, 3.430 billion, and 5.815 billion, with year-on-year growth rates of 42%, 56%, and 70% respectively, indicating a compound annual growth rate (CAGR) exceeding 50% [21][28] - The company is expected to turn profitable by 2027 as revenue scales up and expense growth slows [21][28] Company Overview - Horizon Robotics, founded in 2015, is a leading provider of intelligent driving solutions, focusing on Advanced Driver Assistance Systems (ADAS) and high-level autonomous driving (AD) [5][28] - The company has established partnerships with major automotive manufacturers and Tier 1 suppliers, including BYD, Li Auto, Volkswagen, and Bosch [28] - As of 2024, the cumulative shipments of the Journey series chips have exceeded 7 million, with a market share of 35.9% in advanced assisted driving solutions in China [28] Product Development - The SuperDrive, based on the J6P chip with a computing power of 560 TOPS, is expected to enter mass production in Q3 2025, enhancing the company's high-end product portfolio [21][28] - The introduction of SuperDrive is anticipated to solidify the company's leading position in the smart driving chip market and improve gross profit margins to approximately 50% [21][28] Financial Projections - Revenue forecasts for 2024, 2025, and 2026 are Rmb 2.198 billion, 3.430 billion, and 5.815 billion, respectively, with significant year-on-year growth [18][21] - The company is projected to achieve a gross profit margin of 71% in 2024, decreasing to 61% by 2026 [24][25]

Investment Rating - The report initiates coverage with a "Buy" rating for Horizon Robotics [4][44]. Core Views - Horizon Robotics is positioned as a rare player in the domestic market, offering comprehensive intelligent driving solutions across all levels and scenarios, with significant growth potential anticipated [1][4]. - The company is expected to achieve revenues of 22.61 billion, 33.99 billion, and 57.32 billion yuan from 2024 to 2026, with net profits projected at -67.9 billion, -62.7 billion, and -44.6 billion yuan respectively [4][42]. Summary by Sections Company Overview - Horizon Robotics was established in 2015 and launched its first generation of automotive processing hardware, "Journey," in 2017. By 2020, it began equipping mass-produced vehicles from manufacturers like Changan and Li Auto. The new "Journey 6" series and Horizon SuperDrive solutions are set to be released in 2024, with cumulative shipments of the Journey series expected to reach 7 million by the end of 2024 [1][11]. Market Dynamics - The penetration rate of ADAS+AD solutions in China reached 57.1% in 2023, with projections indicating it could exceed 80% by 2027, driven by a compound annual growth rate of 48% [9][25]. - The report highlights the significance of the NOA function as a turning point for mid-to-high-level intelligent driving, with expectations for its configuration to become more accessible across various vehicle price segments [25][30]. Competitive Landscape - Horizon Robotics holds a leading position in the ADAS market, with a market share of 35.9% as of the first half of 2024, indicating a growing dominance among domestic solution providers [33]. - The company boasts a full-stack technology capability, which is considered a competitive moat, allowing it to offer comprehensive solutions from hardware to software [38]. Financial Performance - In the first half of 2024, Horizon Robotics reported revenues of 9.35 billion yuan, a year-on-year increase of 151.6%, with a gross margin of 79.0% [18][20]. - The automotive solutions segment generated 9.13 billion yuan in revenue during the same period, reflecting a 164.66% increase year-on-year, while the non-automotive solutions segment saw a decline [18][20]. Future Outlook - The company is expected to see substantial revenue growth in its automotive solutions segment, particularly with the anticipated mass production of the J6 series chips starting in 2025 [42][44]. - Revenue projections for 2024-2026 indicate significant growth, with automotive solutions expected to contribute the majority of income [42][44].

Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The electric vehicle (EV) sector has established a strong foothold, while the intelligent driving segment is poised for significant growth. The penetration rate of domestic new energy vehicles continues to rise, with urban NOA becoming a new focal point for intelligent driving, particularly in models priced below 200,000 [5][6]. - The market for advanced driver-assistance systems (ADAS) and high-end autonomous driving solutions is projected to grow substantially, with the market size expected to increase from RMB 61.9 billion in 2023 to RMB 1,017.1 billion by 2030, reflecting a compound annual growth rate (CAGR) of 49.2% [6]. - The company has developed a comprehensive intelligent driving solution that integrates software and hardware, enhancing safety and user experience. This solution is designed to meet the complex requirements of advanced driving systems [7]. - The launch of the Journey 6 series aims to accelerate the mass production and application of intelligent driving technologies, with over 20 automotive manufacturers already collaborating on this platform [8]. - The company is actively expanding its global market presence, focusing on Japan, South Korea, and Europe, and has established strategic partnerships with industry leaders to enhance its offerings [10]. Financial Projections - The company is expected to achieve revenues of RMB 2.335 billion, RMB 3.332 billion, and RMB 4.679 billion for the years 2024, 2025, and 2026, respectively. The projected net losses for the same years are RMB 2.650 billion, RMB 1.527 billion, and RMB 906 million [11][13]. - The report indicates a significant growth rate in revenue, with an expected increase of 50% in 2024 and 43% in 2025 [13]. - The earnings per share (EPS) is projected to improve from -2.50 in 2023 to -0.07 in 2026, indicating a trend towards profitability [13].

Investment Rating - The report assigns a **Buy** rating to Horizon Robotics-W (09660 HK) with a target price of HKD 3 72 [1] Core Views - Horizon Robotics is positioned to benefit from the global intelligent driving market which is expected to grow to a trillion-level market size The company provides cost-effective integrated hardware and software solutions to OEMs and Tier 1 suppliers making it well-positioned to capitalize on the trend of intelligent driving technology penetration into lower-tier markets [4][6] - The company's valuation is based on projected revenues of RMB 2 375 billion RMB 3 561 billion and RMB 5 954 billion for 2024 2025 and 2026 respectively with corresponding PS ratios of 19 1x 12 7x and 7 6x [6] Industry Overview - The global intelligent driving market is expected to grow significantly with the adoption of end-to-end autonomous driving technology The market size for advanced driver-assistance systems (ADAS) and high-level autonomous driving solutions is projected to increase from RMB 619 billion in 2023 to RMB 10 172 billion by 2030 with a CAGR of 49% [9] - End-to-end autonomous driving which uses neural network models to replace traditional modular designs is expected to drive the market forward with significant improvements in data processing efficiency and deployment lightweighting [9] Company Analysis - Horizon Robotics has established itself as a leading provider of intelligent driving solutions in China with a 35 9% market share in the domestic OEM ADAS solutions market in the first half of 2024 [75] - The company's hardware and software integrated solutions cover a wide range of applications from low to high-end autonomous driving with products like Horizon Mono Horizon Pilot and Horizon SuperDrive [20] - Horizon Robotics has a strong R&D team with over 1 500 employees in intelligent driving hardware and software development and has accumulated more than 1 900 global intellectual property rights [23] Financial Performance - Horizon Robotics' revenue has shown rapid growth with revenues of RMB 4 67 billion RMB 9 06 billion RMB 15 52 billion and RMB 9 35 billion for 2021 2022 2023 and the first half of 2024 respectively [29] - Despite being in a loss-making phase the company's net loss has been narrowing with net losses of RMB 20 64 billion RMB 87 20 billion RMB 67 39 billion and RMB 50 98 billion for the same periods [31] Competitive Landscape - Horizon Robotics is competing with global leaders like NVIDIA and Tesla in the intelligent driving domain control chip market In 2024 Horizon's Journey 5 and Journey 3 chips achieved market shares of 5 4% and 2 5% respectively in China [66] - The company's Journey 6P chip with a computing power of 560 TOPS surpasses NVIDIA's Orin-X and Tesla's FSD 4 0 in performance positioning Horizon as a strong competitor in the high-end market [73] Future Outlook - Horizon Robotics is expected to benefit from the trend of high-end intelligent driving technology penetrating into the mid-tier market particularly in vehicles priced below RMB 200 000 The company's cost-effective solutions are well-suited for this segment [83] - The company's Horizon SuperDrive solution combined with the Journey 6 chip offers a high-performance intelligent driving system that is expected to drive future growth [85]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][145]. Core Insights - Horizon Robotics is a leading supplier of ADAS and AD solutions, having established a significant market presence since its founding in 2015. The company went public on the Hong Kong Stock Exchange in October 2024 [1][25]. - The smart driving industry is expected to grow significantly, with increasing penetration rates for ADAS and AD technologies. By 2030, the market for high-level autonomous driving in China is projected to exceed 400 billion RMB [2][54]. - The company focuses on "soft and hard synergy" in the high-barrier smart driving chip sector, leveraging its first-mover advantage to enhance market share [3][4]. Summary by Sections Company Overview - Horizon Robotics is recognized as a top-tier provider of advanced driver-assistance systems (ADAS) and high-level autonomous driving (AD) solutions, serving major OEMs and Tier 1 suppliers in the automotive industry [25][27]. - The company has achieved a leading market share in L2 and below (33.73%) and L2+ and above (14.7%) chip markets in China [27][29]. Industry Outlook - The smart driving industry has vast potential, with policies from various countries promoting automotive intelligence. The penetration rate for L3 autonomous driving is expected to increase significantly with the introduction of relevant regulations [2][54]. - The global market for smart vehicles is projected to reach 81.2% penetration for ADAS and AD by 2026, with sales expected to reach 20.4 million units [2][54]. Competitive Advantages - The company has a strong product lineup, including the "Journey" series of chips, which cater to a wide range of driving scenarios from L2 to L4 [3][77]. - Horizon Robotics has established a flexible business model that includes product solutions, algorithm licensing, and technical services, which are becoming the main revenue sources [30][31]. Financial Projections - Revenue forecasts for 2024-2026 are projected at 23.76 billion, 35.60 billion, and 53.58 billion RMB, respectively, with year-on-year growth rates of 53%, 50%, and 51% [4][126]. - The company is expected to narrow its losses over the same period, with net profits projected at -64.37 million, -17.58 million, and -3.00 million RMB [4][126]. Valuation - The company's current market valuation is 475 billion HKD, with projected price-to-sales (P/S) ratios of 19x, 13x, and 8x for 2024-2026, indicating a valuation below that of comparable companies [4][145]. - The report suggests that the company possesses a certain level of scarcity and premium potential due to its leading position in the ADAS and AD solution market [4][145].

Investment Rating - The report assigns an "Overweight" rating to Horizon Robotics-W (09660 HK) with a target price of HKD 3 82 per share, implying a 2026E P/S of 9 5x and a forward PE of less than 30x based on steady-state assumptions [2] Core Views - Horizon Robotics is a leading domestic intelligent driving solution provider, ranking fourth in China's ADAS and AD solution market in 2023 and first among Chinese companies [2] - The company holds a 35% market share in China's NOA high-end intelligent driving computing solutions, second only to NVIDIA's 49% [2] - The global intelligent driving solution market is expected to reach RMB 1 trillion by 2030, with high-end autonomous driving solutions dominating the market [2] - Horizon Robotics benefits from its strong software-hardware integration capabilities, first-mover advantage, and domestic substitution trends [2] Company Overview - Horizon Robotics generated RMB 1 55 billion in revenue in 2023, with automotive product solutions, licensing and services, and non-automotive solutions accounting for 33%, 62%, and 5% respectively [2] - The company's revenue is projected to grow at a CAGR of 47% from 2024 to 2026, reaching RMB 5 billion by 2026 [2] - Horizon Robotics' core management team has strong technical backgrounds, with founders holding significant voting power (53 64% and 12 09%) [80][93] Industry Analysis - The global intelligent driving solution market is expected to grow from RMB 61 9 billion in 2023 to over RMB 1 trillion by 2030, with a CAGR of 49 2% [106] - In China, the market is projected to expand from RMB 24 5 billion in 2023 to RMB 407 billion by 2030, with high-end autonomous driving solutions growing at a CAGR of 58 5% [108] - Key drivers include rapid technological iteration, increasing penetration of intelligent driving, rising ASPs for high-end solutions, and supportive government policies [113] Competitive Advantages - Horizon Robotics' strengths lie in its software-defined hardware approach, strong customer stickiness due to high switching costs, and its position as a domestic player benefiting from localization trends [2] - The company has established a comprehensive product portfolio, including Horizon Mono, Horizon Pilot, and Horizon SuperDrive, with the latter expected to contribute to revenue from 2024 [71][76] Growth Drivers - The company's hardware business is expected to benefit from the downward penetration of intelligent driving in the automotive sector, while its software business will gain from OEMs' increasing in-house R&D efforts [2] - Horizon Robotics' partnership with Volkswagen through the joint venture Coretronic is expected to drive growth in licensing and services [2] Financial Projections - Revenue is forecasted to grow from RMB 2 24 billion in 2024E to RMB 4 97 billion in 2026E, with non-GAAP net profit turning positive in 2026E at RMB 322 million [2] - The company's gross margin is expected to remain strong, ranging between 70%-80%, driven by the high-margin licensing business [99]

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Insights - The company is a leading provider of automotive intelligent driving solutions in China, focusing on both software and hardware integration to drive long-term growth [2][4]. - The company has achieved significant revenue growth, with a 152% year-on-year increase in total revenue for the first half of 2024, reaching 940 million yuan [2]. - The market for advanced driver assistance systems (ADAS) and high-level autonomous driving solutions is expected to grow rapidly, with a projected CAGR of 49% from 2023 to 2030 [3]. Summary by Sections 1. Leading Automotive Intelligent Driving Solution Provider - The company has been dedicated to developing automotive intelligent driving solutions since its establishment in 2015, with products covering advanced driver assistance to high-level autonomous driving [2]. - As of June 30, 2024, the company has secured 275 model designations for its intelligent driving solutions, which is expected to significantly boost revenue [2][4]. - The company’s revenue for the first half of 2024 was 940 million yuan, with a net loss of 1.1 billion yuan, indicating ongoing investment in R&D [2][4]. 2. Accelerating Penetration of High-Level Autonomous Driving - The penetration of high-level autonomous driving models is accelerating, presenting opportunities for both volume and price increases in intelligent driving solutions [3]. - The global market for high-level ADAS and autonomous driving solutions is projected to grow from 61.9 billion yuan in 2023 to 1,017.1 billion yuan by 2030 [3]. - The company ranks fourth among global providers of high-level ADAS and autonomous driving solutions in China, with a market share of 15.4% as of mid-2024 [3]. 3. Comprehensive Layout Around Intelligent Driving Chips - The company offers three main intelligent driving solutions: Horizon Mono, Horizon Pilot, and Horizon SuperDrive, each targeting different aspects of driving safety and automation [4]. - The company has made significant advancements in its intelligent driving chips, moving from the Journey 1 to Journey 5, and is currently accelerating the development of the next-generation Journey 6 [4]. - The company’s intelligent driving solutions have been adopted by 27 OEMs, covering over 285 vehicle models, which enhances its market competitiveness [4]. 4. Profit Forecast and Investment Recommendations - The company is expected to benefit from the increasing sales of high-level autonomous driving vehicles in China, with projected revenues of 21.2 billion yuan, 30.5 billion yuan, and 45.8 billion yuan for 2024, 2025, and 2026, respectively [4]. - The forecasted net profits for the same period are 896.8 million yuan, -58.2 million yuan, and 10 million yuan, indicating a potential turnaround in profitability [4].

Offering Details - Horizon Robotics plans to offer a total of 1,355,106,600 shares globally, with 135,511,200 shares allocated for the Hong Kong public offering[4]. - The maximum offer price is set at HKD 3.99 per share, with additional fees including a 1% brokerage commission and various transaction fees[5]. - The expected final offer price is anticipated to be no higher than HKD 3.99 and not lower than HKD 3.73 per share[5]. - The company has adopted a fully electronic application process for the Hong Kong public offering, with no printed copies of the prospectus provided[5]. - The pricing date for the offering is expected to be on October 22, 2024[5]. - The shares will not be registered under U.S. securities laws and cannot be offered or sold in the U.S. unless under certain exemptions[5]. - The company aims to enhance its market presence through this public offering, which is part of its broader growth strategy[5]. - The online application platform will be available for investors wishing to receive physical shares, with the application period starting on October 16, 2024, at 9:00 AM[9]. - The deadline for submitting applications for the Hong Kong public offering shares is set for October 21, 2024, at 12:00 PM[9]. - The company will announce any changes to the expected timeline on its website and the Hong Kong Stock Exchange website[14]. - The Hong Kong public offering will commence on October 16, 2024, at 9:00 AM[15]. - The deadline for electronic subscription applications is October 21, 2024, at 11:30 AM[15]. - The expected pricing date for the shares is October 22, 2024[16]. - The allocation results for the Hong Kong public offering will be announced on October 23, 2024[18]. - B class ordinary shares are expected to start trading on the Hong Kong Stock Exchange on October 24, 2024, at 9:00 AM[19]. - Refunds for unsuccessful applications will be issued by October 24, 2024[19]. - The company will provide updates on the final offer price and subscription levels on its website and the Hong Kong Stock Exchange website by October 23, 2024[16]. - Investors applying for 1,000,000 shares or more can collect their shares in person starting October 24, 2024[25]. - The expected timeline is subject to change based on market conditions and regulatory approvals[29]. - All times mentioned are in Hong Kong local time[22]. Company Structure and Governance - The company is registered in the Cayman Islands and operates under a dual-class share structure, which may impact shareholder voting rights[5]. - Horizon Robotics emphasizes the importance of considering the risks associated with its dual-class share structure before making investment decisions[5]. - The company has a dual-class voting structure, with Class A shares granting ten votes per share and Class B shares granting one vote per share[88]. - After the global offering, Everest Robotics Limited will hold 1,733,612,127 Class A shares, representing approximately 53.92% of the voting rights at shareholder meetings[92]. - The company emphasizes the long-term strategy of different voting rights beneficiaries, which may not always align with the interests of all shareholders[90]. Financial Performance - Revenue increased from RMB 466.7 million in 2021 to RMB 905.7 million in 2022, representing a growth of 94.1%, and further increased to RMB 1,551.6 million in 2023, a growth of 71.3%[60]. - Revenue for the six months ended June 30, 2023, was RMB 371.5 million, which increased by RMB 563.1 million or 151.6% to RMB 934.6 million for the six months ended June 30, 2024[60]. - Gross profit rose from RMB 331.0 million in 2021 to RMB 1,094.3 million in 2023, with a gross margin of 70.5% in 2023, compared to 70.9% in 2021 and 69.3% in 2022[60]. - The gross margin increased from 61.0% for the six months ended June 30, 2023, to 79.0% for the six months ended June 30, 2024[60]. - The company has recorded losses historically and expects to continue facing losses in the future, indicating financial risks[60]. - The company reported a net loss of RMB (6,739,053) thousand for 2023, compared to RMB (8,720,428) thousand in 2022, showing a reduction in losses by 22.6%[98]. - The adjusted net loss for 2023 was RMB (1,686,991) thousand, down from RMB (1,958,318) thousand in 2022, reflecting a narrowing of losses[103]. - The company continues to invest heavily in R&D, which is a primary driver of the ongoing losses reported[106]. - The company anticipates that R&D expenses will continue to be a significant part of operating expenses to support business expansion, although the percentage of R&D expenses to revenue is expected to decrease[118]. Market Position and Growth Strategy - The company is a leading provider of Advanced Driver Assistance Systems (ADAS) and high-level autonomous driving solutions, with a market share of 9.3% in 2023 and 15.4% in the first half of 2024 in China[38]. - The global market for ADAS and high-level autonomous driving solutions reached RMB 61.9 billion in 2023, with a projected compound annual growth rate of 49.2%, expected to grow to RMB 1,017.1 billion by 2030[39]. - The company has achieved significant scale growth over the past three years, becoming the largest provider of mass-produced ADAS and autonomous driving solutions in China since 2021[38]. - The penetration rate of ADAS in the global and Chinese markets exceeded 50% in 2023, indicating a growing demand for advanced driving automation solutions[39]. - The company aims to address core challenges in the large-scale application of ADAS and autonomous driving systems, focusing on high processing power, reliability, low latency, and cost-effectiveness[41]. - The company is positioned as a key driver of the smart vehicle transformation and commercialization, leveraging its proprietary technology[38]. - The company plans to continue investing in technology and expanding its solution portfolio to capture industry growth opportunities[66]. - The company is actively pursuing market expansion and strategic partnerships to enhance its product offerings and technological capabilities[87]. - The company aims to achieve breakeven and profitability through revenue scale expansion and operational improvements in the coming years[147]. - The company plans to expand its customer base by leveraging its flexible business model and industry-leading open platform[151]. - The company aims to enter markets outside of China, particularly Japan, Korea, and Europe, to enhance its international presence[151]. Research and Development - The company has successfully commercialized its integrated hardware and software solutions after nine years of development, testing, and iterative improvement[41]. - The proprietary processing architecture (BPU) is tailored for automotive applications, ensuring excellent performance, energy efficiency, and low latency[48]. - The company emphasizes a software-hardware collaborative development approach to achieve optimal system performance and cost efficiency[52]. - Research and development expenses rose to RMB (2,366,255) thousand in 2023, compared to RMB (1,879,888) thousand in 2022, reflecting an increase of 25.9%[98]. - R&D expenses as a percentage of total revenue decreased from 245.0% in 2021 to 152.5% in 2023, indicating improved efficiency in R&D spending[118]. Customer and Supplier Relationships - The company collaborates directly with 25 OEMs or through tier-one suppliers, equipping at least one model from each with its solutions[38]. - The company has secured 275 model designations by June 30, 2024, with over 100 new model designations achieved in 2023 alone, indicating strong market demand[54]. - The solutions have been adopted by 27 OEMs, equipping over 285 vehicle models, with prices ranging from approximately RMB 86,800 to RMB 429,800[54]. - Revenue from the company's top five customers for the years 2021, 2022, and 2023 was RMB 283.1 million, RMB 482.1 million, and RMB 1,067.0 million, representing 60.7%, 53.2%, and 68.8% of total revenue respectively[82]. - The largest customer contributed RMB 115.2 million, RMB 145.3 million, and RMB 627.3 million in revenue for the same years, accounting for 24.7%, 16.0%, and 40.4% of total revenue respectively[82]. - The company’s procurement from its top five suppliers amounted to RMB 251.6 million, RMB 890.2 million, and RMB 1,177.9 million for the years 2021, 2022, and 2023, representing 52.0%, 61.8%, and 50.2% of total procurement respectively[83]. Financial Risks and Challenges - The company faces risks related to high customer concentration, with a significant portion of revenue derived from a limited number of customers[165]. - The company has recorded losses historically and expects to continue facing losses in the future, indicating financial risks[60]. - The company anticipates a significant increase in losses for the fiscal year ending December 31, 2024, primarily due to ongoing R&D investments and valuation fluctuations[184]. - The company has incurred R&D expenses that have increased compared to the same period in 2023, contributing to the anticipated losses[184]. Cash Flow and Capital Management - The company has sufficient cash reserves to cover operational cash needs and support its expansion and growth strategies[160]. - The cash and cash equivalents at the end of 2023 were RMB 11,359,641 million, up from RMB 8,050,034 million at the end of 2021[128]. - The financing cash inflow was RMB 7,218,868 million in 2023, compared to RMB 6,299,413 million in 2021[128]. - The company has sufficient working capital to meet current and future needs for at least the next 12 months[166]. - The company anticipates achieving a net asset position post-global offering due to the automatic conversion of preferred shares into ordinary shares[126]. Strategic Partnerships and Joint Ventures - The joint venture CoolCore Technology (Beijing) Co., Ltd. was established in 2023 with Volkswagen Group, with Volkswagen holding 60% and the company holding 40%[87]. - Revenue generated from automotive solutions provided to CoolCore was RMB 627.3 million and RMB 351.6 million for the periods ending in 2023 and June 30, 2024, respectively, accounting for 40.4% and 37.6% of total revenue[87]. - The establishment of a strategic partnership with Volkswagen Group aims to capitalize on opportunities in customized driving automation solutions in China[156]. Future Outlook - The company expects to maintain its profit levels and launch high-margin new solutions through continuous innovation and supply chain management[154]. - The company plans to continue significant investments in research and development, which may impact its competitive position if unsuccessful[164]. - The company has applied for listing approval for its shares, with expected market capitalization exceeding HKD 40 billion based on the lower end of the indicative offer price range[181].