Core Viewpoint - Zebra Zhixing has submitted its listing application to the Hong Kong Stock Exchange, marking its entry into the capital market, but faces significant financial challenges, including a cumulative loss of 4.183 billion yuan over three years and a declining gross margin [1][9][12] Company Structure and Control - The company was founded in 2015 by SAIC Group and Alibaba, with a shareholding structure that shows strong control by these two major shareholders, holding 40.17% and 37.16% of voting rights respectively [2][4] - The board of directors is heavily influenced by Alibaba and SAIC, with 5 out of 8 executive and non-executive directors having backgrounds in Alibaba [5] Financial Performance - Zebra Zhixing reported a total revenue of 805.43 million yuan in 2022, which increased to 871.89 million yuan in 2023 but fell to 823.79 million yuan in 2024, indicating stagnation [11] - The company has experienced net losses of 8.78 billion yuan, 8.76 billion yuan, and 8.47 billion yuan from 2022 to 2024, with a cumulative loss of approximately 2.6 billion yuan [9][10] - The gross margin has declined from 53.9% in 2022 to 38.9% in 2024, reflecting increased competitive pressure [12] Dependency on Major Shareholders - Over 90% of Zebra Zhixing's revenue comes from its top five clients, with SAIC Group contributing nearly half of its revenue [14] - The company is also heavily reliant on Alibaba for supplies, with procurement from Alibaba accounting for over 50% of total purchases [14] Strategic Shift and Market Position - The company is undergoing a strategic transition from operating system solutions to AI-driven cockpit solutions, as it recognizes the diminishing value of traditional operating systems [17][20] - Zebra Zhixing's market share in the central OS sector has decreased from 1.99% in 2021 to 0.95% in 2024, facing stiff competition from major tech companies like Huawei and Baidu [19] Future Outlook - The IPO proceeds are intended to fund the development of AI-driven cockpit solutions and global market expansion, highlighting the urgency for financial support to sustain its strategic shift [21]