Investment Rating - The report initiates coverage on Zhixing Automotive Technology (01274 HK) with a "Buy" rating [1] Core Views - Zhixing Automotive Technology is a leading full-stack autonomous driving solution provider in China, driven by both product innovation and customer expansion [2] - The company has secured over 40 vehicle models for its autonomous driving solutions, with Geely being its largest customer [2] - The global autonomous driving solutions market is expected to reach nearly RMB 10 trillion by 2030, with China accounting for a significant portion [3] - Zhixing is expected to achieve revenue of RMB 1 58 billion in 2024, with a year-on-year growth of 30%, and turn profitable by 2026 [4] Financial Performance and Valuation - Revenue for 2024E is projected at RMB 1 576 million, with a year-on-year growth of 29 54% [1] - Net profit for 2024E is expected to be -RMB 140 85 million, improving significantly from -RMB 195 11 million in 2023A [1] - The company's revenue in 2023 was RMB 1 216 million, a decline of 8 27% year-on-year, but actual product deliveries increased by 58% [50] - In H1 2024, revenue reached RMB 636 million, up 17 11% year-on-year, with autonomous driving solutions contributing RMB 613 million [51] Product and Market Analysis - Zhixing's product portfolio covers L2 to L2++ autonomous driving levels, with iFC, iDC, and SuperVision™ series [2] - The company has established a subsidiary in Germany to support domestic automakers in enhancing their competitiveness in overseas markets [2] - The global autonomous driving solutions market is expected to grow significantly, with L3-L5 solutions projected to reach RMB 966 6 billion by 2030 [3] - China's L3-L5 autonomous driving penetration rate is expected to reach 80 2% by 2030, surpassing the global average by 16 7 percentage points [3] Competitive Advantages - Zhixing has a strong R&D focus, with 250 R&D personnel accounting for 74 18% of its workforce [45] - The company has a comprehensive product matrix, including SuperVision™, iDC Mid, and iDC High, with plans to launch iFC 3 0 in 2024 [39] - Zhixing's SuperVision™ solution, which supports point-to-point navigation, has been deployed in Geely's popular models, including the Zeekr 001 and 009 [2] - The company has a strong cost control strategy, with iDC Mid achieving a gross margin of 15 1% in H1 2023 [95] Industry Trends - The global autonomous driving solutions market is expected to grow rapidly, driven by increasing demand for high-level autonomous driving (L3-L5) [3] - China's autonomous driving market is expected to lead globally, with L3-L5 penetration rates projected to reach 80 2% by 2030 [3] - The average selling price (ASP) of L3-L5 autonomous driving solutions is around RMB 10,000, significantly higher than that of L1-L2 solutions [86] Strategic Partnerships and Expansion - Zhixing has partnered with Mobileye to develop advanced autonomous driving solutions, including the SuperVision™ system [26] - The company has established a joint venture with Hangsheng Electronics to develop integrated cockpit and autonomous driving products [111] - Zhixing's German subsidiary has helped a major domestic automaker pass the EU's new GSR regulations, enhancing its competitiveness in overseas markets [49]
知行汽车科技：全栈自动驾驶领航者，产品客户双轮驱动