Recently, the Chinese autonomous driving industry has seen a grand wave of IPOs.

According to the Sina Finance app, on October 24th, Horizon Robotics debuted on the Hong Kong Stock Exchange, opening with a 28.32% surge, with a market cap exceeding 66 billion Hong Kong dollars at one point, setting a record for the largest technology IPO in Hong Kong stocks this year. The next day, Weiming Automotive made its debut on the NASDAQ, securing the title of the "world's first common automated driving stock," opening with a 27% jump and a soaring market cap of 5.34 billion US dollars.

In the collective warming market sentiment, the strong debut of Horizon Robotics and Weiming Automotive not only boosted confidence but also made people wonder: who will be the next dark horse to take over?

Who is striving under the surging tide?

In 2024, it will be a "big year" for autonomous driving companies to land in the capital markets, with heavyweight players in subfields such as chips, lidar, solutions, collectively gearing up for the listing breakthrough battle.

According to incomplete statistics, 8 companies in the autonomous driving industry chain have initiated the IPO process this year, with 4 of them taking a crucial step towards the market listing, including TuSimple, Nanfang Black Sesame Group, Horizon Robotics, and Weiming Automotive.

Still in the midst of the IPO battle for unicorns, Yujia Innovation, which has rich experience in mass production, is making final preparations to list on the Hong Kong Stock Exchange. It is reported that the company has passed the overseas issuance and listing application, only one step away from the final push; aiming at L4 advanced autonomous driving, Xiaoma Zhihang and Momenta, with the dual-track of L2+L4, are turning their sights to the U.S. stock market.

If we scrutinize the causes of this wave of IPO frenzy, it is intertwined with multiple considerations such as policy dividends, market expectations, and corporate survival. The warm breeze of policies is blowing frequently. From the release of the notice on carrying out the pilot work of intelligent connected vehicles access and on-road traffic in November last year, to the legislation of intelligent connected vehicles in many cities this year. Supportive policies from the central to local levels have successively landed, injecting a booster for the industry's development and providing reassurance to the capital markets.

Positive industry expectations. Currently, the global automotive industry is undergoing an unprecedented revolution. From traditional transportation vehicles to mobile intelligent terminals, from mechanical structures to software-defined, each iteration is reshaping the genes of this century-old industry. Smart technology not only brings a huge incremental market, but also gives rise to a brand new industry chain. Different levels of autonomous driving technology are gradually penetrating various segmented markets, becoming the "second growth curve" for major mainstream car manufacturers.

Data shows that in 2023, the global penetration rate of vehicles equipped with L2 (including L2+/L2++) intelligent driving solutions is 32.1%, and it is expected to reach 61.1% by 2028. This means that intelligent driving solutions are gradually transitioning from an "optional" to a "standard feature" for new vehicles. It is evident that the autonomous driving industry, which has been heavily invested by venture capital, still has a promising future.

Enterprises are seizing the opportunity. Since last year, autonomous driving technology and business have been seeing simultaneous growth, especially driven by the passenger vehicle market. Various companies, such as Yujia Innovation and Speedcomm, have achieved significant performance breakthroughs in 2023. While the rush to go public may be driven by capital pressures, for veteran players rooted in the industry for over a decade, it is more of a strategic choice aligned with industry development.

With the current trend, who will take the lead next?

Currently queuing for listing are Yujia Innovation, Xiaoma Zhihang, and Momenta, all three companies are making layouts in the passenger vehicle sector for advanced intelligent driving solutions and L4 level autonomous driving, each with its own unique characteristics.

In terms of technological approach, Momenta adopts a "one flywheel, two legs" strategy, emphasizing AI-driven data to support L4 autonomous driving, seeking a balance between the present and the future by using data generated from L2 mass-produced vehicles.

Yujia Innovation has chosen a more stable and pragmatic 'progressive' path. Starting from the bottom, the company has gradually explored iterations from L2 to L2+ through the mass production experience of the ADAS system, while also laying out L4 research and development to reserve space for future technological evolution. This development strategy allows Yujia Innovation to fully validate each technological level, giving it a certain advantage in mass production landing. In addition to smart driving, Yujia Innovation has extended its footprint to include smart cabins and vehicle-road collaborative areas, forming a mutually supportive and collaborative business ecosystem to empower smart automobiles in different fields. By starting from core technology, unfolding both "vertical"-each autonomous driving level, and "horizontal"-different functional scenarios of smart automobiles, Yujia Innovation has further room for imagination in terms of technological limits and market map.

In addition, it is worth noting that all three companies have deployed in overseas markets, including mass-produced models and autonomous driving solutions. Yujia Innovation's solutions have been used in multiple models exported to Europe, Southeast Asia, and other regions. It was also one of the first domestic suppliers to help whole vehicle manufacturers obtain EU DDAW certification, leading to the achievement of E-NCAP five-star ratings for Chinese car companies, and recently achieving a new breakthrough in smart driving going global through the SAIC MG ES5 project.

From a data perspective, Yujia Innovation also exhibits typical characteristics of a technology growth stock.

According to the prospectus, from 2021 to 2023, its revenue increased from 0.175 billion yuan to 0.476 billion yuan, with a high compound annual growth rate of 64.9%. Especially in 2023, revenue increased by 70.4% year-on-year, demonstrating strong growth momentum. As of the final feasible date, Yujia Innovation has initiated mass production cooperation with 29 whole vehicle manufacturers, including seven of the top ten domestic whole vehicle manufacturers in terms of sales volume.

Who will have the last laugh across the cycle?

Looking from a macro perspective, the autonomous driving track is still full of imagination and development space. However, from a capital performance perspective, after the industry went through an earlier cyclical adjustment, it has now arrived at a moment of value reassessment: the story is no longer about hype, and the 'burn money to dream' model is no longer sustainable, replaced by deep contemplation on the sustainability of business models.

Undoubtedly, autonomous driving is still an industry that requires dreams and vision, but dreams ultimately need to be realized.

The current wave of autonomous driving IPOs is both a carnival in the capital markets and an inevitable choice for the industry at a specific stage of development. In this process, we have seen a strong collision of capital and technology, witnessing a profound turning point from concept speculation to rational development in the industry.

For autonomous driving companies, IPO is not the end, but a new beginning. With the support of the capital markets, companies need to quickly complete the transformation from technology to business and achieve true "self-sustaining" capabilities.

With the tides ebbing and flowing, only those companies that put efforts into technological accumulation, mass production implementation, global deployment, and achieve breakthroughs will likely emerge as the future winners in this marathon, rather than just those who shout the loudest slogans. They will be able to go further and have the last laugh.