The IPO of Horizon Robotics (09660) commenced today, October 16, and is scheduled to conclude on October 21, with plans for an official listing on October 24. The company aims to issue 1.36 billion shares, with 10% earmarked for public offering in Hong Kong within a price range of HK$3.73 to HK$3.99 per share, aiming to raise up to HK$5.41 billion. Each lot comprises 600 shares, with an entrance fee of HK$2,418.1.

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Horizon Robotics (09660) has initiated its IPO proceedings today, October 16, which will continue until the 21st, with plans to officially commence trading on the Hong Kong Stock Exchange on October 24. The company intends to issue 1.36 billion shares, with 10% available for public sale in Hong Kong within a price range of HK$3.73 to HK$3.99 per share, aiming for a maximum fundraising of HK$5.41 billion. Goldman Sachs, Morgan Stanley, and China International Capital Corporation are acting as joint sponsors.

Throughout the IPO period, Horizon has attracted interest from numerous esteemed domestic and international institutional investors, including Alibaba, Baidu, Dajiang Group, and a municipal government fund from Ningbo, with cornerstone investments totaling approximately USD 220 million.

Company Scale and Operations

Since its establishment in 2015, Horizon Robotics has been steadfast in its commitment to researching and commercializing AI chips. In 2021, the company unveiled the Journey 5 chip for Level 3/4 autonomous driving, integrating features for autonomous driving and cabin interaction. Boasting a single-chip computing power of up to 128 TOPS, this chip even outperforms Tesla's FSD autonomous driving chip. Horizon's accomplishments encompass intelligent vehicle chip solutions ranging from L2 to L4 and extend to the development of the Matrix 5 full-scenario intelligent in-vehicle central computing platform and Matrix SuperDrive full-scenario intelligent vehicle solution, solidifying its prominent position in the autonomous driving chip sector.

To date, Horizon's integrated software and hardware solutions have been adopted by 27 OEMs (representing 42 OEM brands), integrated into 290 vehicle models, with all of the top ten Chinese OEMs choosing Horizon's intelligent driving solutions.

Since its inception, Horizon has achieved remarkable success in fundraising, securing a minimum of 11 funding rounds totaling RMB 17 billion. Presently valued at over RMB 60 billion, the company enjoys robust support from distinguished investors, including Sequoia Capital, Hillhouse Capital, and Linear Capital. This financial backing not only provides significant financial support but also endorses its future growth trajectory. Horizon's IPO stands as one of the leading technology enterprises in the Hong Kong stock market in 2024.

Financial Situation

Financially, Horizon has maintained a relatively stable performance. In the first half of 2024, the company attained revenues of RMB 9.35 billion, reflecting a notable 151.6% year-on-year increase, with gross profit escalating by 226% and a gross profit margin of 79%. However, Horizon is currently operating at a deficit, accruing a cumulative net loss of RMB 17.523 billion over the past three years, with a net loss of RMB 5.098 billion in the first half of this year, indicating a 170% expansion. Given ongoing investments in research and development, Horizon anticipates a substantial rise in full-year losses for the current year.

The company plans to allocate roughly 70% of the IPO proceeds towards research and development, accelerating the advancement and commercialization of in-vehicle AI chips and intelligent driving solutions; 10% for sales and marketing-related expenditures; 10% for strategic investments in joint ventures (with a particular focus on CoolRuiCheng) to foster an open and mutually beneficial partner ecosystem; and 10% for general corporate purposes and operational capital requirements.

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