After Horizon submitted its IPO application to the Hong Kong Stock Exchange at the end of March, the domestic autonomous driving-related industries successively reported the news of "planned listing/approval for listing", and one of them named "Youjia Innovation" rushed to Hong Kong stocks four days after the termination of A-share listing counseling.
After checking the calendar, it can be found that Youjia Innovation officially announced the abandonment of A shares on Thursday (May 23), and will transfer to Hong Kong stocks next Monday (May 27), saying that it is four days apart, but it is actually one working day.
The eagerness is evident.
"MINIEYE" may be a slightly unfamiliar name, and the industry is more accustomed to calling it "MINIEYE", whose main business is to provide intelligent driving solutions for automobile companies.
A few days ago, the latest information on the official website of the China Securities Regulatory Commission showed that the International Department of the Securities Regulatory Commission issued supplementary material requirements for Youjia Innovation. It is required to provide additional information on the pricing basis and reasonableness of the company's previous share changes since April 2021, and whether the shares held by the shareholders who intend to participate in the "full circulation" this time have been pledged, frozen or other disputed circumstances.
Taking this opportunity, we will also sort out the important information of the Youjia Innovation Prospectus and the story behind it.
01.
0.6% vs. 540 million
On May 27, Youjia Innovation, a provider of intelligent driving and intelligent cockpit solutions, submitted a prospectus to the Hong Kong Stock Exchange.
In this IPO, Joycar Innovation appointed CLSA Limited and China International Capital Corporation Hong Kong Securities Limited as the overall coordinators, and on June 6, three new institutions were added as the overall coordinators: SBI China Financial Services Limited, Essence International Securities (Hong Kong) Limited and Longbridge Securities (Hong Kong) Limited.
In the field of intelligent driving, the company's current solution portfolio covers various solutions from L0 (emergency assistance) to L4 (highly autopilot) autonomous driving, mainly including iSafety and iPilot series, as well as iRobo solutions (under development), which are said to meet the needs of different scenarios and models. Currently, the first three generations of iPilot have been commercialized, and the iPilot 4 is expected to be launched in 2025.
Intelligent driving solutions are the core and foundation of Youjia's innovative business. From 2021 to 2023, the revenue of intelligent driving solutions will be 173 million yuan, 267 million yuan, and 386 million yuan respectively; They accounted for 98.8%, 95.7% and 81.1% of revenue respectively.
The main solutions of Youjia innovative intelligent cockpit include driver monitoring system (DMS) solutions, passenger monitoring system (OMS) solutions and other solutions. In terms of intelligent cockpit business, from 2021 to 2023, the revenue of Youjia Innovation will be 696,000 yuan, 1.565 million yuan, and 18.346 million yuan respectively; They accounted for 0.4%, 0.6% and 3.8% of revenue respectively.
In addition, the solutions provided by Youjia Innovation also include vehicle-road coordination. In 2022, Youjia's innovative vehicle-road collaboration business will begin to be delivered for the first time, with an annual revenue of 722,000 yuan, accounting for 0.3% of revenue; In 2023, the annual income will reach 71.454 million yuan, accounting for 15.0% of the revenue.
Up to now, Youjia Innovation has carried out mass production for 29 OEMs, including Nezha Automobile, Changan Automobile and other manufacturers; At the same time, the company has been carrying out continuous fixed-point projects for 35 models, and has mass-produced 88 models with 29 automakers. Revenue from cooperation with OEMs increased by 44.5% from RMB267 million in 2022 to RMB386 million in 2023, mainly due to an increase in the number of fixed-point sites obtained from OEMs and an increase in the number of projects delivered with relatively high technical content.
From 2021 to 2023, Youjia's innovation revenue will be 175 million yuan, 279 million yuan, and 476 million yuan respectively, increasing in a large proportion year by year.
Although Youjia Innovation has made certain achievements in the field of intelligent driving solutions, its market size is still limited. In terms of L0 to L2+/L2++ solution revenue in 2023, Youjia Innovation ranks sixth among domestic suppliers in China's intelligent driving solution industry, with a market share of only 0.6%, which is far behind the market share of 6.6% in the first place.
In addition, according to the past performance record, the average unit price of Youjia intelligent driving solution is 630 yuan, and from 2021 to 2023, the company's gross profit margin will gradually increase from 9.7% to 14.3%. Although hardware is not included, the price of the solution is still lower than the industry recognizes. In the prospectus, the company admitted that its existing target customers, especially automobile OEMs, have strong bargaining power over its suppliers (including Youjia), and that the company may face continued pricing pressure from automobile OEMs and other major customers to reduce our prices, which may have a material adverse effect on our business, results of operations and financial condition.
In the past three years, the company has continued to lose money, amounting to 140 million yuan, 221 million yuan, and 207 million yuan respectively, with a cumulative loss of more than 540 million yuan in three years.
Youjia Innovation said that the performance loss was mainly due to the procurement cost of raw materials and consumables, research and development, attracting and retaining talents and other factors. Among them, the procurement cost of raw materials and consumables accounted for the largest proportion, with 136 million yuan, 206 million yuan and 350 million yuan from 2021 to 2023, accounting for 77.5%, 73.8% and 73.4% of revenue respectively. Youjia Innovation said that its raw materials and components mainly include electronic components, structural components and camera modules, etc., and the top five suppliers accounted for 41.7% of the total procurement in 2023.
In addition, R&D also accounts for a significant proportion of Youjia Innovation's revenue, with 82.2 million yuan, 139 million yuan, and 150 million yuan from 2021 to 2023, accounting for 46.9%, 49.9%, and 31.5% of revenue, respectively.
Short-term cash flow, liquidity and profitability may be adversely affected, as it may continue to spend heavily on R&D in the future.
On the company's profitability, business development and other issues, a media reporter contacted the relevant person in charge of Youjia Innovation. The relevant person in charge said after announcing the IPO submission news that the company is currently in a state of silence and it is inconvenient to be interviewed externally.
It is worth noting that Youjia Innovation previously launched A-share listing counseling on August 9, 2023, and the counseling agency was Guotai Junan Securities, but on May 23, 2024, it terminated the pre-listing counseling appointment agreement with the counseling agency. In this regard, Eucar Innovation believes that considering the overall market environment and the future strategy of grasping the opportunities in the international market, listing on the Stock Exchange will be more conducive to the company's development.
In this IPO, Joy Innovation plans to use about 40% of the raised funds to enhance R&D capabilities and recruit and retain relevant R&D talents, including research on artificial intelligence technology, improve product R&D capabilities, strengthen innovation commercialization capabilities, and improve R&D infrastructure, equipment and tools.
02.
Cash out the whirlpool
Founded in December 2014 by co-founders Liu Guoqing, Yang Guang, Zhou Xiang and Wang Qicheng, with the technical background of the management, rich experience in management and R&D technology, and the identity of famous universities including Huazhong University of Science and Technology, Southeast University and Tsinghua University, from March 2015 to November 2023, the company has completed a total of 17 rounds of investment, including Wu Yongming, CEO and director of Alibaba, NavInfo, CICC Capital, PwC Capital, Dongfeng Asset Management, Huaqin Technology, Yuanjing Capital (founded by Wu Yongming) and dozens of other well-known institutions.
At the shareholder level, before the IPO, Liu Guoqing held 9.52% of the shares, and controlled about 24.35% of the shares together with the concerted actor group. In addition, Beijing No. 4 maintains about 9.06% of the shares, making it the largest external shareholder, and CICC Capital holds 5.56% of the shares. Wu Yongming holds 2.31% of the shares.
As of November 2023, after the last round of investment, the cumulative financing amount is about 1.448 billion yuan, and the valuation is 5.348 billion yuan.
However, according to the prospectus, in the past 9 years, some shareholders of Youjia Innovation have chosen to transfer their equity in advance to achieve "cash-out". As mentioned above, the International Department of the Securities Regulatory Commission (CSRC) has requested additional clarification on the pricing basis and reasonableness of the company's share changes since April 2021.
In the angel round of financing in March 2015, Wu Yongming subscribed for the company's registered capital of 147,100 yuan and 86,500 yuan with 2.5 million yuan and 2 million yuan respectively, and the unit price corresponded to 17.00 yuan/registered capital and 23.12 yuan/registered capital respectively. From January to April 2019, Wu Yongming transferred the registered capital of Youjia Innovation to Xinrong Investment, Shanghai Hongjin and Beijing Siwei respectively, and cashed out a total of 30.6 million yuan.
In addition to Wu Yongming, there are other shareholders who have chosen a similar path. In August 2016, Youjia Innovation completed the Pre-A2 round of financing, and Beijing Hanbang Hi-Tech Digital Technology Co., Ltd. (hereinafter referred to as Hanbang Hi-Tech) subscribed for the company's increased registered capital of 96,117 yuan at a consideration of 10 million yuan.
Subsequently, in April 2019 and October 2020, the registered capital of Youjia Innovation was transferred to Beijing Siwei, Harvest Shengqi, Harvest Shengde, and Harvest Shengxuan, at a consideration of 9.4 million yuan, 6.2673 million yuan, 7.9532 million yuan and 5.6975 million yuan respectively, with a total of 29.318 million yuan "cashed out".
In April 2019, when the company raised B1 round of financing, the company subscribed 20 million yuan to invest 500,000 yuan in the registered capital of Youjia Innovation, with a unit price of 40 yuan/registered capital. In May 2022, the registered capital of 325,200 yuan and the registered capital of 23,200 yuan were transferred to Hubei Kaihui and Jipei Xinsheng respectively, with a total consideration of 30 million yuan. After the completion of the transfer, it will withdraw from the lineup of shareholders of Youjia Innovation.
In addition to investors and shareholders, the co-founders of Youjia Innovation are also frequently transferring shares to cash out.
In November 2016, Liu Guoqing transferred the registered capital of 77,855 yuan to Yan Shengye, the former director of the company, and cashed out 77,855 yuan; In January 2018, Liu Guoqing, Yang Guang, Zhou Xiang, Wang Qicheng, Wu Jianxin and Yan Shengye transferred part of their shares to Hechuang Intelligence, and cashed out about 4.2 million yuan again.
In April 2021, Liu Guoqing, Yang Guang, Zhou Xiang, and Wang Qicheng respectively transferred their shares, each cashing out 3 million yuan, totaling 12 million yuan. Through the last three reductions, Liu Guoqing and his friends have cashed out a total of 16.2779 million yuan.
According to media statistics, from 2019 to 2022, 5 shareholders, including Dongfeng Asset Management, Hanbang Hi-Tech, and Taoluo Fund, joined the ranks of reducing their holdings, and cashed out a total of 222 million yuan.
If calculated in this way, on the eve of the IPO, the shareholders of Youjia Innovation have cashed out about 269 million yuan, of which Hanbang Hi-Tech and Taoluo Fund no longer hold the company's equity and retreat from Youjia Innovation.
As of March 31, 2024, the Company's cash and cash equivalents totaled $305 million. During the same period, $148 million of short-term borrowings will mature within one year.
In the prospectus, the official stated that it can meet the demand for the next 12 months from the date of this document, taking into account the cash and cash equivalents on hand, operating cash flow, available bank financing and the expected net proceeds from the IPO.
This may be the reason behind the termination of the pre-listing counseling appointment agreement of the A-share counseling agency on May 23 and the switch to Hong Kong stocks on the 27th.
03.
Autonomous driving on the market
With the explosion of artificial intelligence this year and the gradual introduction of large models into cars, coupled with the continuous release of good news such as Tesla's release of Robotaxi, the autonomous driving industry has begun to pick up.
An important manifestation is the influx of a large number of enterprises in autonomous driving and related industries into the capital market.
According to statistics, four autonomous driving-related companies currently listed on the U.S. stock market include TuSimple Future (delisted), Hesai Technology, ECARX Technology, and Zeekr, while Momenta, Pony.ai, WeRide, Tudatong Holdings, and Plus.ai Technology have also passed the overseas listing filing process and plan to list on the NASDAQ or NYSE.
According to a person familiar with the matter, Momenta may complete its listing in the United States by the end of this year or the first half of next year.
In addition to U.S. stocks, autonomous driving companies have also targeted Hong Kong stocks, On December 20, 2023, Zhixing Automotive Technology (01274. HK) was officially listed on the Hong Kong Stock Exchange, becoming the "first stock of autonomous driving" in Hong Kong stocks. Suteng Juchuang, an autonomous driving lidar solution provider, was also listed on January 5 this year, and in the queue list, Black Sesame Intelligence, which is expected to become the "first stock of self-driving computing chips", has passed the hearing of the Hong Kong Stock Exchange and is launching a global roadshow. There are also Ruqi Travel, Zongmu Technology, Horizon, Saimu Technology, and the above-mentioned Youjia Innovation.
In addition, it is reported that Great Wall's autonomous driving company, Momo Zhixing, is also reportedly considering a Hong Kong IPO.
Of course, in addition to stepping on the beat of the large model, the need to go public to recover blood is also the reason why the autonomous driving companies that are currently killing the capital market with losses have to face.
Zhang Xiaorong, president of the Deepin Technology Research Institute, believes that although autonomous driving companies generally face profitability challenges, they can obtain financial support and promote the development and commercialization of technology through listing. "Autonomous driving is extremely expensive, this is a capital-intensive industry, it needs a lot of capital to support R&D and marketing, and listing can open up the necessary financing channels."
How can many autonomous driving companies, including Youjia Innovation, obtain continuous and stable investment to ensure technological innovation, in order to achieve commercialization and positive cash flow as soon as possible?
Going public is a road that has to be taken.