Chinese autonomous driving technology company Horizon listed on the main board of the Hong Kong Stock Exchange on October 24, raising a total of HK $5.407 billion (about 4.961 billion yuan), becoming the largest technology IPO in Hong Kong this year.

On its first day of trading, Horizon Robot-W opened at HK $5.12, up 28.2%. But after surging in the afternoon, shares fell back and closed 20% lower than they had opened.

According to the prospectus, Horizon recorded revenue of about 467 million yuan, 906 million yuan and 1.552 billion yuan in 2021, 2022 and 2023, respectively, with a compound annual growth rate of 82.3%; Revenue in the first half of 2024 was about 935 million yuan, an increase of 151.6% year-on-year.

Since its establishment, Horizon has received many investments, including SAIC Motor, GAC, Great Wall, BYD, FAW, Intel, Yunfeng Fund, Five source Capital, Sequoia Capital, Hillhouse, Blackstone, SK Hynix, Ningde Times, Licun Precision, Xingyu Shares, Weil shares, Sunny Optics and other shareholders. The total financing exceeded 3.4 billion US dollars (about 23.97 billion yuan at present).

Official information shows that Horizon's market positioning is "advanced assisted driving (ADAS) and advanced autonomous driving (AD) solution provider for passenger cars";, Horizon's soft and hard integrated solution has been adopted by 27 Oems (42 OEM brands) and has been applied to 290 models. And China's top ten Oems have chosen Horizon's intelligent driving solutions.

From AIoT to intelligent driving, a nine-year journey of strategic refocus

Horizon was founded in 2015, and its founder Dr. Yu Kai is an internationally renowned machine learning expert. He served as vice president of Baidu Research Institute from April 2012 to June 2015, responsible for promoting Baidu's infrastructure construction in the field of AI, and successfully invited Andrew Ng to join and jointly build Baidu's artificial intelligence system. He also served as laboratory director at NEC American Research Institute and was one of the first researchers in the world to develop deep neural networks.

At the beginning of the business, Horizon simultaneously laid out two business directions: intelligent driving and AIoT (artificial Intelligence Internet of Things). The AIoT business has brought considerable revenue to the company, approaching 200 million yuan in 2019. However, Yu Kai realized that although the AIoT market is vast, it is seriously fragmented, and it is difficult to achieve scale in various vertical fields, and the resource investment is not proportional to the return.

At that time, when the new energy automobile industry fell into the winter, NiO, Xiaopeng, Ideal and other "new forces" car companies have faced financing difficulties. In this context, Yu Kai has made an unusually bold decision - to completely abolish AIoT business and focus on intelligent driving. This strategic decision meant that the company needed to redefine its goals and the allocation of core resources, and although Horizon's capital reserves were sufficient at that time and its business was advancing steadily, in order to focus on future growth points, Yu Kai still insisted on pushing the company to focus on intelligent driving with more strategic value.

Commercialization and market challenges

So far, Horizon has introduced several versions of intelligent driving chips, covering from L2 assisted driving to L4 advanced automatic driving. Journey 1, released in 2017, is the company's first smart chip; In 2019, Horizon released China's first vehicle-level smart chip Journey 2; In 2021, it launched the full-scene vehicle intelligent central computing chip Journey 5, which integrates automatic driving and intelligent interaction; In 2024, the latest Journey 6 series has also been launched, which can cover different intelligent driving scenarios and provide flexible computing solutions.

As of October 2024, the cumulative shipment of Journey series chips exceeded 6 million sets, becoming the automotive computing platform supplier with a market share second only to Nvidia. However, in the face of global competitors such as Nvidia, Mobileye and Tesla, as well as the rapid rise of domestic manufacturers such as Huawei, Black Sesame Intelligence and Momenta, Horizon's market position is not invulnerable.

Horizon's market strategy is different from friends, its product positioning is more open, using the "chip + algorithm reference + tool chain" model, and actively cooperate with a number of domestic and foreign car companies. In 2022, Horizon reached strategic cooperation with automotive companies such as Chery and Volkswagen, which enabled Horizon's intelligent driving solutions to be quickly applied to multiple models. However, in the future, as the trend of self-developed chips by auto companies deepens, such as NIO and Xiaopeng companies may choose self-developed chips, and Horizon's customer dependence will also be challenged.

Write at the end

Yu Kai is often asked whether "scientists are suitable for entrepreneurship", and he has continued to explore how to balance the two identities of scientists and entrepreneurs since founding Horizon. On this topic, Yu Kai believes that the biggest challenge for scientists to start businesses is how to achieve commercialization, and many failed companies are not lost in technology, but fail to create efficient commercial operations. He emphasized that Horizon's success lies in a customer-oriented culture, rather than in the pursuit of technological innovation.

The transformation of smart vehicles is a general trend that is reshaping the automotive, mobility and road transport industries, which are estimated to reach $13 trillion globally by 2023. Thanks to the rapid development of technology and changes in consumer demand in recent years, autonomous/intelligent driving functions are becoming more and more common in today's cars.

However, in the horizon, the successful listing is only a stage of the development of the enterprise, its future development is still full of challenges, whether it can continue to maintain a leading position in the competition of technology and market, it remains to be verified.

Reference link:

https://mp.weixin.qq.com/s/eRhJLX4c8Jgo2EqQRuO6FQ

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