According to foreign media quotes, Horizon has launched a pre-roadshow for its Hong Kong IPO, planning to raise up to US$500 million (about HK$3.9 billion). Previously, Horizon has passed the listing hearing on the main board of the Hong Kong Stock Exchange, with Goldman Sachs, Morgan Stanley and China Securities Construction Investment International as joint sponsors.
Synthesis | Prospectus Edit | Echo
This article is for informational purposes only and does not constitute any trading advice
According to the prospectus, Horizon Robotics is a market-leading provider of advanced driver assistance (ADAS) and advanced autonomous driving (AD) solutions for passenger cars, with proprietary hardware and software technologies.
The company's solutions integrate algorithms, specialized software and processing hardware to provide core technologies for advanced assistance and advanced autonomous driving, thereby improving the safety and experience of drivers and passengers. Relying on the large-scale deployment of front-end mass production solutions, the company has become a key enabler of the transformation and commercialization of intelligent vehicles.
According to CIC, since Horizon Robotics' mass production of solutions in 2021, the company is the first and largest Chinese company to provide advanced assisted driving and high-level autonomous driving solutions for front-end mass production every year in terms of total installed base of solutions.
In terms of total installed base of solutions in 2023 and the first half of 2024, Horizon ranks fourth among all global advanced driver assistance and advanced autonomous driving solution providers in China, with market shares of 9.3% and 15.4%, respectively.
As a Tier 2 supplier, the company has a large global customer base, including industry-leading OEMs and domestic automotive manufacturing Tier 1 suppliers. As a market leader, the company has seized the tremendous growth opportunities in the industry, and the business has achieved significant growth at scale over the past three years. As of June 30, 2024, a total of 25 OEMs are working directly with the Company or through Tier 1 customers, and the Company's Advanced Driver Assistance and Advanced Autonomous Driving solutions are installed in at least one of their vehicles.
The intelligent transformation of vehicles is a megatrend that is reshaping the automotive, mobility, and road transport industries, which are valued at $13.0 trillion globally in 2023. Thanks to the rapid technological development and high consumer demand in recent years, advanced driver assistance features are becoming more and more common in today's cars. According to CIC, the penetration rate of ADAS in both the world and China will exceed 50% in 2023.
At the same time, industry players continue to work tirelessly to more widely adopt higher-level autonomous driving with increasing levels of automation. According to CIC, the global market for advanced driver assistance and advanced autonomous driving solutions reached RMB61.9 billion in 2023 and is expected to grow to RMB1,017.1 billion by 2030 at a CAGR of 49.2%. Despite Horizon's rapid growth, the company remained in the red during the track record period.
Horizon Robotics offers a comprehensive portfolio of advanced driver assistance and advanced autonomous driving solutions, from mainstream driver assistance (Level 2) to advanced autonomous driving (Level 2+ in line with Chinese regulatory compliance), namely HorizonMono, HorizonPilot and HorizonSuperDrive, to meet the different needs of customers. According to CIC, as of the latest practicable date, there was no mass production of passenger cars equipped with Level 3 or higher autonomous driving in China.
Horizon's unique solutions and open platform strategy have won the company more and more loyal customers and ecological partners. As a Tier 2 supplier, the company works directly with OEMs and through Tier 1 suppliers to install the company's hardware-and-software advanced driver assistance and advanced autonomous driving solutions into mass-produced vehicles.
As of the Latest Practicable Date, Horizon's integrated hardware and software solutions have been adopted by 27 OEMs (42 OEM brands) and installed in more than 285 vehicle models, with prices ranging from approximately RMB86,800 to RMB429,800. All 10 Chinese OEMs have chosen the company's solutions for the mass production of their passenger models.
As of December 31, 2021, 2022 and 2023 and June 30, 2024, the company has obtained a total of 44 models, 101 models, 210 models and 275 models respectively (excluding termination projects). In 2023 alone, the company has secured more than 100 new model designations.
In 2021, 2022 and 2023 and the six months ended June 30, 2024, the Company had five, four, four and zero terminated projects, respectively.
During the Track Record Period, Horizon's flexible and scalable business model has led to significant growth in the Company's business and laid the foundation for the Company's continued success in the future. The Company's revenue increased by RMB439 million or 94.1% from RMB467 million in 2021 to RMB906 million in 2022 and further increased by RMB646 million or 71.3% to RMB1,552 million in 2023. The Company's revenue increased by RMB563 million, or 151.6%, from RMB372 million for the six months ended June 30, 2023 to RMB935 million for the six months ended June 30, 2024.
The Company's gross profit increased from RMB331 million in 2021 to RMB628 million in 2022 and further increased to RMB1,094 million in 2023. The Company's gross profit increased from RMB227 million for the six months ended June 30, 2023 to RMB739 million for the six months ended June 30, 2024. In 2021, 2022 and 2023, the Company had a high and stable gross profit margin of 70.9%, 69.3% and 70.5%, respectively. The Company's gross profit margin increased from 61.0% for the six months ended June 30, 2023 to 79.0% for the six months ended June 30, 2024.
Horizon Robotics is the first company in China and one of the first companies in the world to design and develop advanced driver assistance and advanced autonomous driving solutions, as well as automotive processing hardware. The company is also the first company in China and one of the first companies in the world to successfully integrate advanced driver assistance and advanced autonomous driving solutions into production vehicles. The company's processing hardware is also one of the first processing hardware in the world to achieve sub-ISO26262 ASIL-B level. The company is the first in the world to launch an 8-megapixel monocular vision advanced driver assistance solution.
Horizon launched the company's advanced driver assistance solution, HorizonMono, in 2019 and began generating revenue in 2021 and began mass production in the second quarter of 2021. The company launched its high-speed NOA solution, HorizonPilot, in 2021, which began generating revenue in 2022 and began mass production in the second quarter of 2022. In April 2024, the company launched HorizonSuperDrive, the company's high-level autonomous driving solution. The Company expects HorizonSuperDrive to begin generating revenue through algorithm and software licensing in 2024 and mass production in 2026, subject to market conditions.
Horizon Robotics has entered into a strategic partnership with an affiliate of the Volkswagen Group (Volkswagen) through a joint venture established in 2023, Core Cheng (Beijing) Technology Co., Ltd. (CoreCheng), to seize the opportunity to customize high-level autonomous driving solutions in China in the future.
Core Cheng is engaged in the research and development and manufacturing of high-level autonomous driving application software and high-level autonomous driving systems, and provides after-sales service, training, consulting, testing and technical services for products. In the short term, the main customer of Core Cheng will be the Volkswagen Group, and its products will be used in Volkswagen cars sold in China.
Volkswagen and Horizon hold 60% and 40% stakes in Core Cheng, respectively. In 2023 and for the six months ended June 30, 2024, the Company's revenue from providing automotive solutions to Core Cheng was RMB627 million and RMB352 million, accounting for 40.4% and 37.6% of the total revenue, respectively.
According to public information, since its establishment in 2015, Horizon has received more than 10 financings, including well-known investment institutions such as Hillhouse Capital, CICC Capital, and Sequoia China, as well as the capital of China FAW, GAC Capital, Great Wall Motor, Dongfeng Assets, BYD and other automobile companies, with a cumulative financing of more than 3 billion US dollars. Horizon's latest round is Chery Automobile's strategic investment, which was disclosed in September 2022 and is said to be valued at $8 billion.
The proceeds from Horizon Hong Kong's IPO are intended to be allocated for R&D purposes over the next five years; allocation of sales and marketing-related expenses; allocate strategic investments in the future of the Company's joint ventures, in particular Core Cheng, to broaden and enhance the Company's technological capabilities; and for general corporate purposes and working capital needs.