Recently, China's autonomous driving industry ushered in a huge IPO boom.

The Zhitong Finance App learned that on October 24, Horizon was listed on the Hong Kong Stock Exchange, with a sharp rise of 28.32%. The market capitalization once exceeded HK$66 billion, setting the record for the largest technology IPO in Hong Kong stocks this year. The next day, Wenyuan Zhixing landed on NASDAQ and took the “world's first share of universal autonomous driving”. The opening market surged 27%, and the market capitalization soared to 5.34 billion US dollars.

In a situation where market sentiment is picking up collectively, while the “bright start” of Horizon and Wenyuan Zhixing boosted confidence, it also made everyone think: Who is the next dark horse to take over the lead?

Under the tide, who is rushing to take the exam?

2024 will be a “big year” for autonomous driving companies to enter the capital market. Heavyweight players in segments such as chips, lidar, and solutions will collectively shine to launch a breakthrough battle for listing.

According to incomplete statistics, 8 companies in the autonomous driving industry chain have started the IPO process during the year. Of these, 4 have taken a critical step to open the door to listing, including: Sagiteng Juchuang, Black Sesame Intelligence, Horizon, and Wenyuan Zhixing.

Among the unicorns that are still fighting for IPOs, Yujiao Innovation, which has rich experience in mass production, is making the final sprint to land in Hong Kong stocks. It is reported that the company has already gone through overseas issuance and listing, and it is only a “step away” from ringing the bell; Momenta, which aims for L4 high-end autonomous driving, and Momenta, which has parallel L2+L4 tracks, is setting its sights on the US stock market.

However, if you look closely at the causes of this wave of IPOs, there are multiple considerations of policy dividends, market expectations, and corporate survival. Policy warming winds blow frequently. From the publication of the “Notice on Launching Pilot Work on Intelligent Connected Vehicle Access and Road Traffic” in November last year, several cities have successively promoted intelligent connected vehicle legislation this year. Support policies have been implemented one after another from the central government to the local authorities, injecting strength into the development of the industry and providing reassurance to the capital market.

Industry expectations are improving. Currently, the global automotive industry is undergoing an unprecedented revolution. From traditional means of transportation to mobile smart terminals, from mechanical structure to software definition, every iterative upgrade is reshaping the genes of this century-old industry. Intelligence has not only brought about a huge incremental market, but also spawned a new industrial chain. Autonomous driving technology at different levels is gradually penetrating into various market segments, becoming the “second growth curve” for major mainstream car companies.

According to the data, the global penetration rate of cars equipped with L2 (including L2+/L2++) intelligent driving solutions will be 32.1% in 2023, and is expected to reach 61.1% in 2028. This means that smart driving solutions are gradually changing from “optional” to “standard for new cars.” It can be seen that the autonomous driving industry, which is being bet on by half of the venture capital community, is still in the thick of snow.

The company followed the trend. Since last year, autonomous driving technology and commerce have “blossomed”. Driven by the passenger car market in particular, various companies have begun to launch. Companies such as Youjiao Innovation and Sagiteng Juchuang all ushered in a major performance explosion in 2023. Although there are factors that force capital into the market, it is more of a strategic choice for veteran players who have been rooted in various racetracks for more than 10 years.

At this moment, who will take over the baton?

The three companies, Youchao Innovation, My Little Pony, and Momenta, which are currently lining up for the market, have plans to install advanced smart driving solutions and L4 autonomous driving in front of passenger cars, but they all have their own characteristics.

On the technical path, Momenta adopts a “one flywheel, two legs” strategy, emphasizes AI data drive, uses data generated by L2 mass-produced models to feed back L4 autonomous driving, and seek balance between the present and the future.

Youjiao Innovation chose a more steady and pragmatic “gradual” path. The company started low and gradually explored and iterated towards L2 and L2+ through the mass production experience of ADAS systems, while laying out L4 R&D to reserve space for future technological evolution. This development strategy allows every technical level of Youjia Innovation to be fully verified, giving it a certain advantage in mass production implementation. Furthermore, in addition to intelligent driving, Youjiao Innovation has extended the layout to the fields of smart cockpit and vehicle-road collaboration, forming a business ecosystem with mutual support and collaborative development, and empowering smart cars from different fields. Using core technology as the starting point, this “vertical” — various autonomous driving levels, and the “horizontal” — coordinate system for different functional scenarios of smart cars makes the technical upper limit and market layout of Yuchao Innovation have further room for imagination.

Furthermore, it is worth noting that all three companies have established positions in overseas markets, including mass-produced models and autonomous driving solutions. Youchao's innovative solutions have taken many models overseas to Europe, Southeast Asia, etc., and is one of the first domestic suppliers to help automakers obtain EU DDAW certification. At the same time, it also took the lead in helping Chinese car companies obtain E-NCAP five-star ratings. Recently, it also achieved a new breakthrough in smart driving overseas through SAIC MG MG ES5 project.

Judging from the data performance, Youjia Innovation also showed typical characteristics of technology growth stocks.

According to the prospectus, from 2021 to 2023, its revenue increased from 0.175 billion yuan to 0.476 billion yuan, with a compound annual growth rate of 64.9%. In particular, in 2023, revenue increased 70.4% year over year, showing strong growth momentum. Furthermore, as of the last practical date, Youjiao Innovation has launched mass production cooperation with 29 automakers. Its customers include 7 of the top ten domestic automakers in terms of sales.

Who can have the last laugh through the cycle?

Seen from a macro perspective, the autonomous driving circuit is still full of room for imagination and development. However, judging from capital performance, after experiencing early cyclical adjustments, the industry has ushered in a time of revaluation: the story is no longer hard currency, and the “burning money to make dreams” model is no longer sustainable; instead, deep thinking about the sustainability of the business model is being replaced by deep thinking about the sustainability of the business model.

Needless to say, autonomous driving is still an industry that requires dreams and visions, but dreams must eventually come true.

The current wave of autonomous driving IPOs is not only a carnival in the capital market, but also an inevitable choice for the industry to reach a specific stage of development. In this process, we saw a strong collision between capital and technology, and also witnessed a profound transformation of the industry from conceptual hype to rational development.

For autonomous driving companies, IPOs are not the end; they are a new starting point. With the help of the capital market, enterprises need to complete the transformation from technology to commerce faster to achieve true “hematopoietic” capabilities.

The tide rises and falls, and the waves wash the sand. The winners of the future will probably not be the ones who shout the loudest slogans. Only companies that have worked hard and achieved breakthroughs in technology accumulation, mass production implementation, and global layout can go further and have the last laugh in this marathon.