Yu Kai, Chairman and CEO of Horizon Robotics, attends the company’s listing ceremony on the Hong Kong Stock Exchange on October 24, 2024.
Shanshan Cao/Forbes Asia
Horizon Robotics, a Beijing-based company that develops both the software and hardware needed for self-driving cars, saw its stock rise in its long-awaited Hong Kong stock market debut on Thursday, increasing its market capitalization to $6.9 billion. did.
Horizon Robotics closed its first trading day at HK$4.1, up 2.8% from its IPO price of HK$3.99 per share. The company’s stock price rose as much as 38% in intraday trading. The company sold 1.4 million shares at the high end of the market price range of HK$3.73 to HK$3.99, raising HK$5.4 billion ($696 million).
The IPO, the largest in Hong Kong this year so far, attracted a number of major investors, including Baidu, Alibaba, a government fund from China’s Ningbo city, and the family office of French shipping billionaire Rodolphe Saade. Ta. Horizon Robotics said in its prospectus that it will use the proceeds primarily to fund research and development activities over the next five years.
“The completion of the Hong Kong listing is an important step towards entering the international market,” Yu Kai, the company’s co-founder, chairman and CEO, said at the listing ceremony in Hong Kong on Thursday. ” he said. “Looking forward, Horizon Robotics will continue to maintain a human-centered approach, continue to increase investment in research and development, and continue to create value for users through innovation, making travel safer and better for everyone. I will go.”
Before going public, Horizon Robotics had no shortage of high-profile investors. These include SAIC Motor, a Chinese state-backed automaker. Baillie Gifford, a Scottish investment firm backed by Amazon and Tesla. Intel Capital and three Forbes Midas Listers: Richard Liu’s 5Y Capital, Zhang Lei’s Hillhouse Investment Management, and Neil Shen’s HonShan (formerly Sequoia China). In 2023, German car giant Volkswagen will invest more than $2 billion in a joint venture with Horizon Robotics, which focuses on developing self-driving technology for Volkswagen cars sold in China, taking a 60% stake.
The list of billionaire investors continues: Gene Salata’s EQT Private Capital Asia; SK Hynix is a major Korean memory chip company led by Choi Tae-won. YF Capital, a private equity firm co-founded by Jack Ma. Robin Zeng’s electric vehicle battery maker CATL. and BYD, a Chinese EV car maker led by Wang Chuanfu.
From left to right: Horizon Robotics co-founders Tao Feiwen, Yu Kai, and Huang Chang.
Shanshan Cao/Forbes Asia
Horizon Robotics was co-founded in 2015 by Yu, an artificial intelligence scientist who started the self-driving project at Baidu, Huang Chang, former Baidu chief R&D architect, and Tao Feiwen, associate director. Ta. The company’s most advanced system is called Horizon SuperDrive, which the company says is designed to enable human-like autonomous driving in urban, highway, and parking scenarios. According to the prospectus, the system, introduced in April, “theoretically supports” Level 4 automation, one level below full automation, meaning it can make decisions in certain situations without human input. It is said that it can be done.
Other systems from Horizon Robotics offer features such as automatic emergency braking and parking assistance. The company also licenses its proprietary algorithms and software to clients to enable them to develop their own customized products. The customer roster includes 27 automakers, including Volkswagen, South Korea’s Hyundai Motors, China’s BYD, Geely Automobile, Li Automobile and NIO.
Horizon Robotics claims in its prospectus that it is China’s largest provider of autonomous driving assistance systems by installed base as of June, citing China Insights Industry Consultancy. The company announced that it installed 900,000 systems in passenger cars in the first half of this year, giving it a 15.4% market share in China, behind only three other overseas providers.
That said, Horizon Robotics is not yet profitable. The company’s net loss in the first half of this year nearly doubled from a year earlier to 5.4 billion yuan ($758 million), due in part to higher research and development costs. During the same period, sales more than doubled to 934.6 million yuan, with 74% of sales coming from licensing agreements, followed by sales of non-automotive systems such as self-driving systems and home appliances. The company said it plans to reach breakeven “within the next few years” by increasing sales, expanding into Japan, South Korea and Europe, and introducing more advanced self-driving systems.
The auto industry has long sought to make self-driving cars the new norm, but accidents and even fatalities have put this nascent technology under increased safety scrutiny. Tesla unveiled a prototype of its CyberCab driverless car in October, but the lack of details on the technology behind the robotaxi disappointed investors. Meanwhile, Apple was reported to have scrapped its self-driving electric car project in February after a decade of work.
Despite these setbacks, some companies are moving forward. Pony AI, a Chinese self-driving startup founded by former Baidu employee James Peng, filed for an IPO in the United States last week. The company is among a select group of companies that have received permission to test driverless ride-hailing services on roads. Others include Baidu, which has robotaxis available in several cities in China. China’s WeRide has received driverless driving permits in California, Singapore and the United Arab Emirates. Another is Alphabet’s Waymo, which is being tested in several U.S. cities.
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