The world's first stock of Robotaxi went public, what are the highlights of Pony.ai?

My Little Pony was listed on NASDAQ on Nov 27.

In fact, My Little Pony has become the largest IPO in the field of autonomous driving in the US stock market since this year. It will also be the largest autonomous driving IPO among US stocks this year, and is truly the "first Robotaxi stock in the world."

Founded in 2016, My Little Pony Zhixing is an autonomous driving technology company. Its technical goal is to create a "virtual driver" (Virtual Driver) suitable for different models and scenarios. In 2018, PonyPilot (PonyPilot), China's first autonomous driving travel service (Robotaxi) platform, was also the first company in China to obtain driverless travel service licenses in all four major first-tier cities in the north, Guangzhou, and Shenzhen. In addition, My Little Pony has also set up autonomous truck (Robotruck) and passenger car intelligent driving (POV) businesses.

Peng Jun, co-founder and CEO of My Little Pony Zhixing, was very proud to be able to successfully land on the NASDAQ and was highly recognized in the capital market. "In eight years, My Little Pony Zhixing led the industry through cycles and relentlessly breaking through technological changes, and now it has finally reached a critical inflection point in commercialization."

Another interesting piece of information is that Waymo, a company that also focuses on the Robotaxi business, completed its latest round of financing this year, raising as much as USD5.6 billion.

As a scarce target for US stocks on the same track, what are the future potential and market prospects of My Little Pony?

1. The L4 autonomous driving technology company with the highest revenue in China has sufficient cash to consolidate its ability to get through the cycle.

The listing is actually a careful selection. It is a comprehensive review of the company's strategic path, business model, financial health, business compliance, competitive advantage in the market, and prospects on the track.

According to public information, at present, My Little Pony has obtained nine "firsts" in China's Robotaxi industry - currently, My Little Pony Zhixing is the first company in China to obtain driverless travel service licenses in the four major first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen. It is also the first company in China to launch a standardized autonomous driving test vehicle, and the first company in China to launch Robotaxi, an autonomous driving travel service.

At present, My Little Pony Robotaxi has accumulated over 33.5 million kilometres of autonomous driving road test mileage, including nearly 4 million kilometres of unmanned test mileage. In the first half of 2024, the average number of orders for each fully unmanned Robotaxi exceeded 15 orders per day, which became a key milestone in the large-scale commercialization of the company's Robotaxi.

Leading technical capabilities have been recognized by the market. Coupled with continuous scaling, My Little Pony Zhixing already has strong self-hematopoietic abilities. Compared to most autonomous driving companies in the industry, My Little Pony can be considered an "excellent student."

According to the prospectus, Little Pony Zhixing's revenue for 2022 and 2023 was USD68.39 million and USD71.9 million (up 5.1% year on year), and revenue for the first three quarters of 2024 was USD39.51 million (up 85.5% year on year). The total revenue for the past three years exceeded USD0.179 billion (about RMB1.3 billion yuan). It is currently the L4 autonomous driving technology company with the highest revenue in China. It has the highest revenue scale among L4 autonomous driving companies that currently disclose financial data.

My Little Pony divides revenue into three blocks, namely revenue from autonomous driving travel services, revenue from autonomous driving freight services, and revenue from technology licensing and application services. Specifically, all three businesses achieved significant year-on-year revenue growth in the first three quarters of 2024. Among them, revenue from autonomous driving services was USD4.7 million, up 422.2% year on year; revenue from autonomous freight service was USD27.4 million, up 56.5% year on year; and revenue from technology licensing and application services was USD7.4 million, up 155.2% year on year.

At the same time, the company maintained a healthy cash flow. According to the prospectus, as of the end of Jun 2024, the total amount of the company's cash and cash equivalents, short-term investments and restricted cash wasUSD0.473 billion. The capital is sufficient, which can guarantee the safe and stable operation of the company for about 5 years. If you add the current total capital of about USD0.452 billion to the calculation, this time value has nearly doubled.

Generally speaking, in the economic downturn, assets with higher profit quality and defensive value are often "safe havens" for investors and are more likely to be favoured by investors. Having enough cash and raising the safety cushion gave the pony the strength to continue to move through the cycle.

This ability to cross the cycle can also be confirmed by the increase in the number of employees at Little Pony Zhixing in recent years.

In addition, My Little Pony has continued to invest in R&D in recent years. In the first nine months of 2022 to 2024, the company's total R&D investment was about USD0.369 billion. According to the prospectus, My Little Pony plans to raise capital from the IPO to promote large-scale commercialization and market expansion of autonomous driving services and freight services. Of this, about 40% of the funds raised will be used to continue to invest in research and development of autonomous driving technology.

Based on the underlying logic driven by R&D growth of high-precision innovative enterprises, My Little Pony Zhixing attaches great importance to R&D, and emphasizes that putting technology first to drive commercial development will further strengthen its ability to continue to grow and move through cycles in the future.

2. The Chinese version of Waymo has broad market prospects and is recognized by top capital.

Judging from the above analysis, My Little Pony is a player with an absolute leading position in China's Robotaxi industry. If you study it more deeply, you'll find that the company has many similarities with Waymo, the leading company in the US Robotaxi industry.

Other than being on the same track, My Little Pony is basically the same as Waymo's technical route and areas of focus. According to information, both sides focus on urban areas and high-speed travel scenarios in China and the US, and use multi-sensor fusion solutions to sense routes, and mass-produced models from both sides have reached the L4 level.

At the same time, they both have the ability to operate on a large scale. My Little Pony Zhixing operates in four major first-tier cities in the north, Guangshen, and currently has a fleet of more than 250 vehicles. Waymo mainly focuses on Phoenix, Los Angeles, and San Francisco in the US, and currently has around 700 operating vehicles.

Also, compared to Waymo, My Little Pony has a wider layout. Currently, Waymo is focusing only on the US, and My Little Pony Zhixing's global layout is gradually gaining momentum. According to data, My Little Pony has set up R&D centres in Silicon Valley and Luxembourg, respectively, and is setting up autonomous driving businesses in countries and regions such as South Korea, Luxembourg, Saudi Arabia, and the United Arab Emirates to enable technology and products to go overseas. This also echoes the reason why its prospectus explains that Robotaxi's revenue rose 422.2% year over year in the first three quarters of this year - mainly due to revenue from Robotaxi technology solutions projects in South Korea.

At present, My Little Pony Zhixing has taken the lead on the eve of large-scale commercialization of Robotaxi, reaching strategic cooperation or establishing joint ventures with many top domestic and foreign automakers, including Toyota, BAIC, GAC, SAIC, FAW, etc. According to reports, My Little Pony has cooperated with Toyota and BAIC to mass-produce Robotaxi, and the 1,000-vehicle scale Robotaxi will be launched in the next two years. It is expected that the balance between operation break-even (gross profit correction) will be achieved in 2025, and large-scale commercialization of Robotaxi will begin.

Zhang Ning, vice president of Little Pony Zhixing, once publicly stated, "In cities such as Guangshen in the north, when the number of Robotaxis is launched, the operating volume will reach a break-even point. Crossing this point, every time we add a vehicle, our cost will be lower, gross margin will be higher, and we will enter a positive phase of continuous self-hematopoiesis.”

Many of the top international capitals have also used real money to express their recognition. Since its inception, My Little Pony has carried out multiple rounds of financing. According to public information, the investors behind Little Pony Zhixing have a rich background, not only well-known VCs such as Sequoia China, IDG Capital, and Wuyuan Capital, but also top car companies such as Toyota Motor Corporation and FAW Group, state-owned enterprises such as China Merchants Capital, as well as Saudi New Future City, Canada's Ontario Teacher Retirement Fund, and Brunei Investment Authority. Among these are both industrial capital and financial bosses. In the future, My Little Pony Zhixing will have more room for imagination in building an industrial chain ecosystem.

Looking back, My Little Pony's growth ceiling is still very imaginative.

Since autonomous driving is of great strategic importance in many aspects such as shaping the industrial ecosystem and promoting national innovation, promoting the development of autonomous driving has risen to a high level of national strategy. Both at home and abroad, a series of favourable policies have been introduced, creating a moderate development environment for the development of the industry.

Driven by the policy, the size of the global Robotaxi service market continues to grow, and expectations for large-scale commercialization are constantly increasing. According to Frost & Sullivan data, based on GTV (transaction value), the global mobile mobility market will reach USD4.5 trillion in 2025, and will further grow to USD4.7 trillion in 2030. Driven by technological advancements, support policies, and falling hardware costs, Robotaxi services are expected to be commercialized around 2026. China is expected to become the largest market for Robotaxi services, which is expected to reach USD39 billion by 2030, accounting for more than half of the global Robotaxi service market.

Currently, the concentration of related industries in the world is not high, and there is a lot of room for integration. As a leading leading enterprise, My Little Pony Zhixing has established a viable business model, and has a more advanced global layout compared to similar manufacturers. It is expected to form a first-mover advantage, lay a solid foundation for rapid business expansion, and deeply enjoy the dividends of rapid growth in the scale of the industry.

Following the simple commercial rule of "raising big fish in big water," the global roboTaxi service market of nearly USD80 billion dollars is enough to carry many companies with a market value of 10 billion dollars or even tens of tens of billions of dollars. It is unknown whether My Little Pony will be the first to reach the target, but the comparative advantages shown so far have widened the gap with most of its peers.

Overall, by relying on correct strategic choices and effective competitive strategies, My Little Pony has successfully captured opportunities in the broad market of autonomous driving, and has gained a leading edge in this racetrack through long-term intensive cultivation and persistence, and has also given it greater certainty in the wave of autonomous driving companies entering the capital market.