In May, Hong Kong stocks ushered in a "good start", and many technology stocks kicked off a strong rebound, but Zhixing Automotive Technology suffered a "head start".
On May 3, Zhixing Automotive Technology (01274. HK) staged a "high diving", the stock price plummeted 39.24%, the cumulative decline in the past two days was more than 46%, almost halved, the company is currently closing at HK$60 per share, with a market value of HK$13.58 billion.
According to the data, Zhixing Automotive Technology landed on the Hong Kong Stock Exchange on December 20 last year, the company has the halo of "the first share of autonomous driving" in Hong Kong stocks, and the stock price continues to rise after listing, with a cumulative maximum increase of more than 300% during the period, and the trend can be described as sharp, but it has been abnormal recently, what happened behind this?
According to the announcement, the cornerstone investors of Zhixing Automotive Technology ushered in a wave of lifting of the ban as early as June 19 this year. With that date just over a month away, the company's share price crash may have something to do with it. Previously, the funds were quite profitable, and some sensitive institutions may have sold off before the arrival of the lifting of the ban, choosing to settle in the pocket.
However, more importantly, the company's weak performance, long-term loss quagmire, and worrying business model may be the reasons behind the choice of funds to smash the market.
As an autonomous driving solution provider, the company now has commercialized L2 to L2+ autonomous driving solutions, and is developing L2 to L4 autonomous driving solutions for OEMs.
As of the end of last year, the company has obtained fixed-point letters related to 16 well-known whole car companies such as Geely Automobile, Great Wall Motor, Chery Automobile and Dongfeng Motor.
At present, the penetration rate of electric vehicles is rising, and the oil vehicles have shown a posture of competition, next, "intelligent" will become the key "ticket" of the second half of the competition of new energy vehicles, which is the consensus of the industry. Among them, "autonomous driving" may become the core of the competition among the major giants, and Zhixing Automotive Technology, as the pioneer of the autonomous driving track, is expected to get a share of this feast.
However, the company's profitability is worrying, from 2020 to 2023, the company recorded revenue of less than 2.8 billion yuan in four years, while the total net loss attributable to the parent company in the same period exceeded 1 billion yuan, recording losses for four consecutive years. Although the company's loss amount has narrowed in 2023, its profit is still far away.
At the same time, the company's gross profit margin was also under pressure. From 2020 to 2023, the gross profit margin of Zhixing Technology will be approximately 20.1%, 20.6%, 8.3% and 9.9%, respectively. As an autonomous driving manufacturer with core technology, the company's gross profit margin is even worse than that of some ordinary manufacturing companies.
In addition, Zhixing Auto Technology's over-reliance on a single customer and supplier is often criticized by investors. In 2023, the company's products are highly dependent on Mobileye, accounting for nearly 9% of the purchase volume, and the company's revenue from Geely Group will even exceed 9%.
Some industry insiders have bluntly said that the role of Zhixing Automotive Technology is more like a hard-pressed OEM, looking to Mobileye to purchase chips and core software, doing system integration, testing, verification, packaging and other processes by itself, and looking for car manufacturers like Geely to deliver solutions. Whether upstream or downstream, the company lacks bargaining power, and once there is a problem in cooperation, the company's business will also be significantly damaged.
As an enterprise with an annual gross profit of only 121 million yuan, the company's market value is as high as tens of billions of Hong Kong dollars, and this is still the valuation level after being cut in half.
Zhixing Automotive Technology is on the cusp of autonomous driving, looking glamorous, the industry prospect is promising, and the high valuation is normal, reflecting the optimistic expectations of capital. But there is always a limit to everything, and if the market pursues it excessively, once it is stormy, the accumulated bubble may be punctured. In the long run, there is still great uncertainty about whether the company can become bigger and stronger in the fierce competition.
Author: Flying Fish