近日，Black Sesame International Holding Limited（下称“黑芝麻智能”）再次向香港联交所递交上市申请，中金公司、华泰国际为联席保荐人。
Founded in July 2016, Black Sesame Intelligence is a provider of automotive-grade intelligent vehicle computing SoCs (system chips) and SoC-based solutions, and released the "Huashan No. 1" autonomous driving chip A500 in August 2019. In April this year, Black Sesame Intelligence further launched the Wudang series C1200, which can cover the needs of many different domains within smart cars such as cockpit and intelligent driving.
Black Sesame Smart's IPO road is not smooth. As early as July 2022, Shan Jizhang, CEO of Black Sesame Intelligence, revealed that the company was applying for the process of the Science and Technology Innovation Board, and in June 2023, Black Sesame Intelligence switched to Hong Kong stocks, but because it did not pass the hearing within 6 months, the listing application materials of Black Sesame Intelligence in early 2024 were in a "invalid" state.
As the first company to submit listing application materials under the effective date of the "18C" rules of the Hong Kong Stock Exchange, the IPO process of Black Sesame Smart has attracted much attention from the market. According to the "18C" regulations, for companies in the new generation of information technology, advanced hardware, advanced materials, new energy, energy conservation and environmental protection, new food and agricultural technology and other industries, only in terms of market value, research and development expense ratio, sufficient working capital and investment by senior independent investors and other aspects are proposed, but there are no requirements for the net profit and cash flow of the corresponding enterprises.
From the current point of view, the operating years and valuation level of Black Sesame Intelligent meet the requirements of the "18C" rules of the Hong Kong Stock Exchange, but it is still unknown whether it can knock on the door of the Hong Kong Stock Exchange as desired.
As the core component in the process of "new four modernizations" (electrification, networking, intelligence, and sharing) of automobiles, intelligent driving chips have grown significantly with the outbreak of new energy vehicles in recent years, but chips are the weak link in the intelligent driving industry chain, and most chip unicorn companies are still in the stage of capital transfusion.
The black sesame intelligence born in this context cannot escape the fate of "burning money". According to the prospectus, from 2021 to 2023, the operating income of Black Sesame Intelligence will be 60.504 million yuan, 165 million yuan, and 312 million yuan respectively, maintaining a continuous growth trend.
However, the loss attributable to equity holders of the company was 2.357 billion yuan, 2.754 billion yuan and 4.855 billion yuan respectively, with a cumulative loss of more than 10 billion yuan in three years. After excluding the fair value change of financial instruments and share-based payment, the adjusted net loss of Black Sesame Intelligent was 614 million yuan, 700 million yuan and 1.254 billion yuan, respectively.
"We may continue to incur net losses in the near term. Black Sesame Intelligence explained in the prospectus that the reason for the loss is that it is in the fast-growing automotive-grade SoC and solution market expansion and operation stage, and is continuing to invest and research and develop. Future revenue growth will depend on the ability to develop new technologies, enhance customer experience, establish effective commercialization strategies, and develop new products and solutions.
From 2021 to 2023, the R&D investment of Black Sesame Intelligence will be 595 million yuan, 764 million yuan, and 1.362 billion yuan respectively, accounting for 78.7%, 69.4% and 74.0% of the total operating expenses in the same year, and 984.0%, 461.8% and 436.2% of the revenue in the same year, which means that the commercialization of Black Sesame Intelligence is still in the early stage.
In terms of gross profit margin, from 2021 to 2023, the gross profit of Black Sesame Intelligence will be 21.872 million yuan, 48.631 million yuan and 77.143 million yuan, and the gross profit margin will be 36.1%, 29.4% and 24.7% respectively, showing a downward trend. In this regard, the prospectus explained that it was mainly due to the inventory provision related to the SoC solution of Black Sesame Intelligence, and the inventory provision was made according to the reduction of the net realizable value.
In the intelligent driving chip industry with long investment time, high R&D cost and slow commercialization, Black Sesame Intelligence, as one of the few intelligent driving chip companies that can achieve mass production, is naturally inseparable from the blessing of capital.
Since its establishment in 2016, Black Sesame Intelligence has been favored by well-known capitals such as Northern Light Venture Capital, SAIC Motor, China Merchants Venture Capital, Oceanpine Capital, Tencent, Dongfeng Asset, NIO Capital, and Xiaomi Yangtze River Industry Fund, and has conducted a total of 10 rounds of financing, raising a total of about 645 million US dollars. The valuation of Black Sesame Intelligence has also increased from US$18.1 million at the beginning to US$2.218 billion, or about 16 billion yuan.
As of December 31, 2023, Black Sesame Intelligence's cash and cash equivalents were $1.298 billion. The company disclosed in the prospectus that it is estimated that these funds will be able to maintain financial capacity for 15 months, assuming an average cash burn rate of $87.9 million in the future, which is similar to the level of cash burn in 2023.
Since the last round of financing in December 2021, Black Sesame Intelligence has not received new financing for more than 2 years. If the listing is stranded or unable to raise new funds, the company will face greater financial pressure.
Black Sesame Intelligence admits that if the capital requirements are significantly different from the current plan, the company may need additional capital sooner than expected. If additional financing is not available in a timely manner on favorable terms, or is not available at all, it may adversely affect the company's liquidity, etc.
It is worth mentioning that the relationship between Black Sesame Intelligence and large customers does not seem to be stable. In the previously disclosed prospectus, the largest customer of Black Sesame Intelligence is customer A, and the recently updated large customer has been changed to F. Compared with 2021 and 2022, the top five customers of Black Sesame Intelligence in 2023 have basically undergone a major change, and the top five customers in 2021 will only have customer D in 2023, and the remaining four major customers have disappeared.
Black Sesame Intelligence explained that the significant decrease in sales from customer A in 2023 is mainly due to the company's upgrade of its existing autonomous driving solutions, which leads to the need for a transition period to further upgrade and adjust the customer's own platform, and customer A's downstream customers in the commercial vehicle field have encountered difficulties in operation and liquidity, resulting in a decrease in customer A's purchase volume, which affects the company's sales to customer A.
From 2021 to 2023, under autonomous driving products and solutions, the customer retention rates of SoC-based solutions are 0%, 60%, and 37%, respectively, and the customer retention rates of algorithm-based solutions are 50%, 33%, and 29%, respectively, which is the main revenue of Black Sesame Intelligence, and from 2021 to 2023, the company's autonomous driving products and solutions contributed 56.6%, 86.0%, and 2023, respectively. 88.5% of revenue.
From the perspective of the industry, Black Sesame Intelligence is also facing a lot of external competitive pressure. As one of Black Sesame's competitors, Horizon Journey chip shipments have exceeded 3 million pieces, and Black Sesame Intelligence has shipped more than 152,000 SoC products by the end of 2023, which is not in the same order of magnitude as Horizon's shipments, and is incomparable with foreign chip giant NVIDIA. In the external environment where there are giants in front and chasing soldiers in the back, it is not easy for Black Sesame Intelligence to break through smoothly.