Invested by Lenovo Xiaomi, the ideal contribution is more than 40% of the revenue, and the embarrassment of 1% of the market share of Zongmu Technology

Zongmu Technology, which has been listed on the New Third Board and applied for the Science and Technology Innovation Board, chose the Hong Kong Stock Exchange as the destination of the capital market. According to the prospectus recently submitted by Zongmu Technology, the revenue from 2021 to 2023 will be 230 million yuan, 470 million yuan, and 500 million yuan respectively, and the total loss is more than the earning, and the corresponding adjusted net loss will be 380 million yuan, 480 million yuan, and 520 million yuan.

According to the description of the prospectus, Zongmu Technology is an ADAS (Advanced Driver Assistance System) solution provider, investors include Lenovo, Xiaomi, etc., and the ideal revenue from the largest customer in 2023 accounts for 43.8% of the total revenue, but in terms of sales revenue in 2022, Zongmu Technology ranks fifth among the company's headquarters in Chinese mainland ADAS solution providers for Chinese passenger cars, with a market share of 1%, and the gross profit margin of the vehicle-grade sensor business, which contributes the largest business in 2023, is 1.2% , the overall gross profit margin was 3.5%. Zhixing Technology, which also starts from hardware to make autonomous driving solutions, has a gross profit margin of 9.9% in 2023, and the gross profit margin of Horizon, a provider of ADAS and AD (high-level autonomous driving) solutions submitted to the Hong Kong Stock Exchange during the same period, is 70.5%. is also in the autonomous driving track, and the embarrassment of Zongmu Technology is immediate.

The three-year loss was 1.38 billion yuan

"It seems to be doing intelligent driving, but I really haven't dealt with it", an employee of an autonomous driving AI technology company told a reporter from Beijing Business Daily that "their business is more focused on parking, which does not overlap with us and has no special impression."

According to the information disclosed in the prospectus, in China's passenger car automatic parking solution market, Zongmu Technology ranked second among the company's suppliers headquartered in Chinese mainland in terms of sales revenue in 2022, with a market share of 4.9%. In China's passenger car APA parking solution market, Zongmu Technology ranked first among the company's Chinese mainland headquartered suppliers in terms of sales revenue in 2022, with a market share of 5.6%.

In the prospectus, these figures are listed after the ranking of China's passenger car ADAS (Advanced Driver Assistance Systems) solutions market. In the above dimensions, Zongmu Technology ranks fifth in the country with a market share of 1%.

In the risk factors sector, Zongmu Technology ranked competition at the top of the list, "We operate in a highly competitive market and compete with well-known competitors and new entrants to the market. We may not be able to compete successfully with existing or potential competitors."

According to the prospectus, from 2021 to 2023, Zongmu Technology's net loss will be 1.58 billion yuan, and the adjusted net loss will be 1.38 billion yuan. "We have incurred significant operating losses and net losses during the track record period, and may not be able to achieve or continue to be profitable in the near future," reminds Zongmu Technology.

In fact, Zongmu Technology's loss is not a special case. There is a view that autonomous driving is still in the early stage of the industry, and companies are more inclined to lower prices to seek higher market share. In the state of continuous losses, whoever can harvest stable orders, hematopoiesis to maintain operations, and raise more bullets will have a better chance of winning.

In this regard, Zongmu Technology told a reporter from Beijing Business Daily: "In the future, the company will continue to increase R&D investment, further promote the commercialization of autonomous driving solutions, promote the commercialization of autonomous driving energy service robots, and enhance customer value through collaborative development." ”

Contributed the majority of gross profit margin of 1.2%

Third-party observers are more concerned about the data, "ADAS companies need to further expand their market share, increase revenues, increase gross margins, and control expenses in order to become healthy companies in the face of uncertain profitability." Wang Qinglin, manager of Ruidaheng Research Institute, told a reporter from Beijing Business Daily.

As a Tier 1 supplier, Zongmu Technology is involved in software design, hardware design, system design and integration of these components in the field of autonomous driving, so as to develop solutions that can be deployed on a large scale.

Zongmu Technology's revenue mainly comes from the sales of intelligent driving products and solutions, autonomous driving-related R&D services, and other three parts, and from 2021 to 2023, intelligent driving products and solutions all contribute more than ninety percent of the revenue.

In 2023, the revenue proportion of rail-level sensors will increase from 32.8% in 2021 to 64.5%, and the revenue proportion of domain controllers will decrease from 58.5% in 2021 to 27.5%. In other words, more than 60% of Zongmu Technology's current revenue comes from rail-level sensors.

Zhang Xiang, director of the Vodaf Digital Vehicle International Cooperation and Research Center, told Beijing Business Daily that "the autonomous driving solution is a large system, and Zongmu Technology mainly sells domain controllers and rail-level sensors, and the products are relatively simple, and the concept is also confused."

From the perspective of making money, in 2023, the gross profit margin of rail-level sensors will be 1.2%, the gross profit margin of domain controllers will be 11.7%, and the gross profit margin of autonomous driving related R&D services will be 18.6%. Talking about the gross profit margin and future trend of rail-level sensors, Zongmu Technology said, "This business includes 4D millimeter-wave radar, high-resolution cameras and ultrasonic sensors. Gross profit margin increased from -9.1% in 2022 to 1.2% in 2023, mainly due to higher camera sales and higher gross profit margin of camera products compared to radar products."

According to the prospectus, Zongmu Technology's highest gross profit margin is autonomous driving-related R&D services, which will be 42.7%, 50.8%, and 18.6% respectively from 2021 to 2023, and the corresponding revenue will account for 8.6%, 7.1%, and 7.9%.

The growth rate is not as good as the industry average

Also in the autonomous driving track, the gross profit margin of Zongmu Technology's competitors has a different performance.

Zhixing Technology, which will be listed in December 2023, is a mass production solution provider in the field of autonomous driving, with revenue of 1.22 billion yuan and gross profit margin of 9.9% that year. Horizon, which recently submitted its prospectus to the Hong Kong Stock Exchange, is a provider of ADAS and AD (high-level autonomous driving) solutions, with a gross profit margin of 70.5% in 2023.

Zhang Xiang also paid attention to the difference between the development of Zongmu Technology and the industry level. According to the prospectus, the domestic market size of the ADAS solution track where Zongmu Technology is located from 2021 to 2023 will be 25.9 billion yuan, 41.3 billion yuan, and 55.4 billion yuan respectively. From 2021 to 2023, Zongmu Technology's revenue will be 230 million yuan, 470 million yuan, and 500 million yuan respectively.

This shows that Zongmu Technology's growth rate is lower than the industry average growth rate. The ADAS field has relatively high requirements for core technologies, Zongmu Technology's ranking is low, and the threshold in the field of automatic parking is relatively low, and its ranking is higher", Zhang Xiang told a reporter from Beijing Business Daily, "In the future, Zongmu Technology's market share may decline." ”

The dependence on large customers is also one of the risks of Zongmu Technology. According to the prospectus, from 2021 to 2022, revenue from the largest customers accounted for 28%, 50%, and 43.8% of total revenue, respectively. Existing OEM customers may decide to stop using our products in their models because they are developing their own solutions or choosing products from our competitors."

Combined with RCC Ruidaheng engineering information database, there are currently nearly 100 intelligent driving manufacturing project information, Wang Qinglin told Beijing Business Daily reporter, "from the perspective of participating enterprises, Xiaopeng and others have invested in the research and development of intelligent driving industry chain, in order to better grasp their own development, powerful car companies will be more inclined to independent research and development of intelligent driving systems, the current order volume for Zongmu Technology and other enterprises is not an absolute guarantee." In 2023, the largest customer will contribute nearly 50% of the performance to Zongmu Technology, and once the choice of major customers changes in the future, it will cause a huge blow to Zongmu and be a huge hidden danger for the development of the enterprise."

Beijing Business Daily reporter Wei Wei