On August 28th, Heizhima Intelligent (02533.HK) announced that its revenue increased by 69.2% to RMB 180.1 million for the six months ending June 30, 2024, mainly due to the increased sales of its autonomous driving products and solutions. The company recorded a profit of RMB 1104.8 million for the six months ending June 30, 2024, compared to a loss of RMB 3729.1 million in the same period last year.
The company's overall gross margin increased by 365.3% to RMB 90.1 million. The gross margin of the company's autonomous driving products and solutions increased from 12.9% for the six months ending June 30, 2023, to 47.2% for the six months ending June 30, 2024, due to the improvement and validation of the company's autonomous driving algorithm integrated in the system-on-chip (SoC) based solutions, which allows customers to choose solutions with fewer hardware components according to their needs. The gross margin of the company's intelligent image solution business increased from 47.5% in the same period last year to 86.6% for the six months ending June 30, 2024, mainly due to the increase in revenue percentage generated by the licensing of self-developed software and algorithms with no hardware components required and higher gross margin. As a result of the above reasons, the company's overall gross margin increased from 18.2% in the same period last year to 50.0% for the six months ending June 30, 2024.
The company's research and development (R&D) expenses increased by 21.8% to RMB 687.3 million for the six months ending June 30, 2024, mainly due to the simultaneous commercial adaptation of the C1200 and ongoing development of the higher performance A2000 chip.
The company continues to increase its investment in R&D, with R&D expenses accounting for 67% of total operating expenses in the first half of 2024, and the proportion of R&D team members reaching 85%. The company is committed to developing more advanced SoC products and expanding its product line to meet the demand for Level 3 and above autonomous driving functions. For example, the company is developing the Huashan A2000 SoC, which, according to Frost & Sullivan, will have a designed computing power of over 250 TOPS and become one of the highest-performing automotive-grade SoCs in the world.
As of June 30, 2024, the company has 58 granted patents in China, 72 granted patents in the United States, 121 patent applications in China, and 45 patent applications in the United States. As of the same date, the company has registered two integrated circuit layout designs in China, 96 software copyrights, two software copyrights in the United States, and 176 registered trademarks worldwide.
The company's Huashan series high-performance chip A1000 has been mass-produced and applied to vehicles, supporting Level 2 to Level 3 autonomous driving functions, including memory parking, autonomous parking, and NoA (Navigate on Autopilot) functions on highways and urban expressways. Currently, the NoA function has been available in 13 provinces and cities in China, including Sichuan, Shanxi, Shandong, etc. As of June 30, 2024, the Huashan A1000 chip has been successfully integrated in mass-produced vehicles such as the Geely Lynk 08 series, Dongfeng eπ007, Dongfeng eπ008, and the company has obtained intention orders for SoC production from 16 automotive OEMs and Tier 1 suppliers for 23 models.
As an emerging application scenario of intelligent driving technology, the integration of vehicle and road cloud realizes real-time information interaction among vehicles, roads, and traffic facilities through deep integration of software and hardware, effectively reducing transportation costs and improving transportation safety. Relying on the chip and algorithm advantages accumulated in the mass production of Huashan A1000 series products in passenger and commercial vehicles, the company conducts precise perception and fine management based on trajectory analysis of all participants in road traffic, including pedestrians and vehicles. Up to now, the company has launched several vehicle-to-road cloud integration projects in Hubei, Shenzhen, Luoyang, and other places, further expanding its market in the field of intelligent transportation.
The company stated that as its chip and algorithm applications in the automotive autonomous driving field continue to deepen and mature, and the computing power of its chip products continues to improve, the company will not only explore more automotive application scenarios but also actively expand into emerging areas such as humanoid robots.