In recent days, the financial markets in Asia, particularly the A-shares and H-shares in Hong Kong, have shown remarkable resilience, sparking a wave of initial public offerings (IPOs) in the intelligent driving sectorThis renewed vigor is emblematic of the surging interest in autonomous vehicles, and the potential they hold for revolutionizing transportationOn October 24, Horizon Robotics, listed under the ticker 9660.HK, officially debuted on the Hong Kong market, enjoying an impressive opening surge of 28.32%, ultimately driving its market capitalization beyond 66 billion Hong Kong dollarsThis event marked Horizon Robotics as the largest tech IPO in Hong Kong for the year.

Before Horizon's remarkable entry, there were other players like Hezhima Intelligent, Soaring Technology, and RQX, which had already rung the bell for their respective listingsAdditionally, emerging names in the industry like Pony.ai, WeRide, and Momenta are also feverishly accelerating their paths to capital markets, all aiming for a share of the burgeoning landscape of autonomous driving.

As we typically examine the intelligent driving sector, it has become clear that both upstream and downstream players are engaged in fierce competitionRecently, Tesla unveiled its self-driving taxi, dubbed "Cybercab," which Elon Musk claimed could transform Tesla into a company valued at $10 trillion—an audacious assertion that has garnered reactions from industry aficionadosThe ambition is fueled by the belief that the introduction of autonomous technology will fundamentally alter how we approach transportation.

In China, various tech behemoths, whether it be NIO, Xpeng, or the Huawei-backed Hongmeng Zhixing, have entered the fray, alongside traditional automobile manufacturers like GAC, Chery, and Geely who are all escalating their competitive endeavorsThe push for high-level intelligent driving capabilities has even extended to budget-friendly models priced at around 200,000 yuan, reflecting a growing democratization of advanced driving technologies.

In an era defined by rapid technological advancement, consumers increasingly view the level of automation as a crucial factor when purchasing vehicles

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The integration of AI, big data analytics, and cloud computing has positioned intelligent driving as a pioneering direction for transformation within the automotive industryCompanies that understand and adopt these technologies are setting themselves apart in what can be described as a modern-day gold rush.

But what factors have allowed Horizon to emerge from this competitive landscape? What sets it apart as the most intriguing candidate for intelligent driving public offerings? One major aspect is its impressive performance metrics, which have earned both industry and investment community recognition.

Horizon has not merely been the first to file for IPO; it has built a robust reputation and solid market position that can only be likened to being dubbed “the first stock” in this genre.

Since its inception, Horizon Robotics has attracted major players and institutional investorsFor example, during its seed funding round in 2015, it was valued at a staggering $60 million, but by the end of September 2022, following its Series D round, its estimated valuation skyrocketed to $8.71 billion—a phenomenal 144-fold surge within just seven yearsThis highlights the making of a formidable unicorn.

Among its early investors were industry leaders such as SAIC, Great Wall Motors, BYD, and CATL, alongside top-tier global investment firms including Hillhouse Capital, Sequoia Capital, and BlackstoneDuring the IPO process, Horizon’s cornerstone investors included giants like Alibaba and Baidu, adding substantial credibility to its offering.

The company’s IPO fundraising plans aimed to secure up to 5.41 billion Hong Kong dollars (approximately $500 million), reflecting the substantial interest in and recognition of Horizon by industry and investor communities.

The performance figures support the hype surrounding Horizon

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In the first half of the current year, revenues surged by 151.6% to reach 935 million yuan, while gross profits grew at an even faster rate of 226%, reaching 739 million yuanThe gross profit margin climbed impressively to 79%, a testament to its robust business fundamentals, especially amidst an automotive industry grappling with fierce price wars.

Furthermore, the company's losses are narrowing—with adjusted net losses decreasing from 11.03 billion yuan in 2021 to 8.04 billion yuan in the first half of this year, down from 9.96 billion yuan year-on-yearThis financial tightening in losses combined with a solid cash reserve of over 10.45 billion yuan underscores the liquidity strength for Horizon.

As a hard-tech company, Horizon Robotics invests significantly in research and development, having dedicated 5.4 billion yuan over the past three yearsIn just the first half of this year, R&D expenditures reached 1.42 billion yuan, reflecting a 35.3% year-on-year increase, which significantly outpaces its revenue, showcasing its commitment to innovation.

Justified by these metrics, Horizon holds the distinction of being the largest and most effectively mass-produced supplier of smart driving solutions in China, cementing its position as a vital player in market share and commercial viability, alongside cutting-edge research capabilities.

In this crowded field of intelligent driving solutions, what makes Horizon a coveted rarity?

Horizon quickly built a shipment volume of 6 million sets of solutions within just four years—a feat not easily replicated within this fast-evolving marketSince commencing mass production in 2020, their proprietary computing solutions have rapidly gained traction, securing tremendous market penetration.

Since 2021, Horizon has been the first and largest supplier of Advanced Driver Assistance Systems (ADAS) and high-level autonomy solutions based on total installations, aligned with ten major Chinese OEMs, such as SAIC, Changan, and BYD, solidifying its reputation as a key partner in the industry.

The installation rates for Horizon’s solutions have quadrupled between 2022 and 2023, further testament to their competitive edge.

In the first half of 2024, Horizon claimed the top market share both in front-view integration computing solutions and intelligent driving solutions at 33.73% and 28.65%, respectively.

The data speaks volumes; since their inception, Horizon has established itself as the definitive frontrunner in the intelligent driving sector, showcasing unparalleled growth and innovation.

Digging deeper into its growth trajectory, Horizon has exhibited a compound annual revenue growth rate of approximately 82.3% between 2021 and 2023, alongside maintaining high gross margins over the years, indicative of operational efficiency and strong demand

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Their margin for the recent half-year period has significantly increased to 79%.

Moreover, Horizon has been actively securing partnerships with auto manufacturers; thus far, they have obtained defined production orders for 290 vehicle models with 152 successfully moving to standard operating production.

These defined orders symbolize future revenue opportunities as they transition into mass production, ensuring that Horizon possesses a substantial commercial moat.

On the management front, Horizon boasts a highly qualified and experienced teamFounder Yoon Kai, a renowned expert in deep learning with over 25 years in the field, has been instrumental in advancing China’s machine learning, computer vision, and pattern recognition technologies, having published over 100 papers cited widely in the industry.

Today, collaborations with automotive giants like Changan, Li Auto, and Volkswagen underscore the expanding influence of Horizon Robotics, as they aim to deepen strategic partnerships across the automotive industry.

An illustrious moment came in 2020 when Horizon, merely five years after its founding, achieved mass production of its automotive-grade computing system—Journey 2—on Changan’s UNI models, representing a significant milestone in China’s domestic smart automotive chip production.

This was closely followed by further advancements with the rollout of Journey 3 and Journey 5 systems in models like Li Auto ONE, situating Horizon in a favorable position for continued success in the automotive sector.

Amidst its rapid growth, BYD has emerged as one of Horizon’s earliest investors, and both companies are engaged in extensive collaboration across various facets of intelligent driving technology.

In a notable partnership, Horizon is also collaborating with CARIAD, a software subsidiary of the Volkswagen Group, representing a significant step onto the international automotive stage.

Given this impressive growth rate coupled with the consolidation of successful commercial ties, Horizon Robotics is undoubtedly one of the most compelling companies currently listed in the intelligent driving sector.

As we turn our gaze towards its strategic methodologies, it is evident that unique know-how not only defines a firm’s competitive edge but also serves as a critical driver of growth.

Unlike many of its competitors, Horizon Robotics embodies an atypical approach by blending software with hardware, branding itself as a software company dressed in chip clothing

Yoon Kai once defined it succinctly: “We are a software company at heart, and that has remained our guiding principle.”

Rather than merely accumulating technical specs, the firm leverages its combined strength in hardware and software, striving to offer consumers experiences that exceed expectationsThis principle is clearly reflected in the fact that none of the 6 million computing solutions delivered are reliant on individual chip deliveries, enabling Horizon to uniquely cater to a comprehensive range of driving intelligence solutions.

The history of technology from PCs to mobile internet has consistently shown that hardware-software integration is pivotal during transformation epochs, driven home by partnerships like Intel and Microsoft in the PC space, or Qualcomm and Google in the mobile sector.

In today’s context, both Tesla and Huawei have adopted strategies centered on hardware-software integration and cooperative ecosystems, reengineering the smart car landscape while enhancing user experiences drastically.

Since its founding, Horizon has pledged to navigate the breadth of software into hardware to establish a holistic capacity—combining industry-leading technical competency, robust engineering capabilities, and a user-centric product system.

This multi-pronged approach has allowed Horizon to achieve rapid growth, reaching the shipment milestone exceeding 6 million sets and defined production orders for 290 vehicle models within a remarkably short span.

With the launch of the new Journey 6 hardware this quarter, the company aims to finalize their first batch of mass-produced modelsIn another feather to their cap, Chery has also partnered with them across multiple vehicle brands, demonstrating the breadth of their influence across varied demographics.

The Journey 6, capable of achieving computing power up to 560 TOPS by encompassing CPU, BPU, GPU, and MCU abilities into a single architecture, represents a pioneering model capable of addressing diverse intelligent driving requirements.

As Horizon’s SuperDrive enters nationwide capability testing, it’s clear the velocity of their innovation is set to accelerate

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