Group 1 - The core point of the announcement is that Youjia Innovation has conditionally agreed to sell 51% equity of its subsidiary Hunan Youxiang for a total consideration of RMB 183.6 million, after which it will retain 49% equity [2] - Hunan Youxiang, established on November 16, 2020, is primarily engaged in vehicle-road collaboration-related businesses and was a wholly-owned subsidiary of Youjia Innovation prior to the sale [2] - The net assets of Hunan Youxiang were reported as RMB 4.4415 million, RMB 5.6783 million, and RMB 792,100 for the years 2023-2024, with post-tax net losses of RMB 259,400, RMB 1.2368 million, and RMB 2.1138 million for the respective periods [2] Group 2 - Youjia Innovation has established three main business segments: intelligent driving, intelligent cockpit, and vehicle-road collaboration, focusing on enhancing vehicle intelligence through sensor fusion and computational power [3] - The company is making continuous breakthroughs in L4 autonomous driving capabilities and is actively exploring applications in open road scenarios, supporting the scalable development of unmanned vehicles [3] - The vehicle-road collaboration business, while having long-term value in smart transportation, faces challenges such as communication delays and multi-party coordination, which need to be addressed for large-scale promotion [3] Group 3 - The company plans to implement a growth strategy based on sustainable development and quality performance, aiming to enhance adaptability and ensure financial stability [4] - The decision to sell the related assets is intended to concentrate resources on the research and development of intelligent driving and intelligent cockpit areas, thereby providing smarter, more convenient, and safer driving experiences [4] - This strategic asset sale is aimed at focusing on high-potential business areas that are expected to yield higher returns [4]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 31.4, indicating a potential upside of 20% from the current price of HKD 26.3 [4][2]. Core Insights - The company, Youjia Innovation, is a pioneer in progressive autonomous driving technology in China, focusing on a gradual development strategy from basic ADAS functions to full-stack self-developed autonomous driving solutions ranging from L0 to L4 [1][11]. - Youjia aims to become a global leader in the autonomous driving intelligent solutions industry, leveraging its expertise in algorithm development, software engineering, and hardware design [2][11]. - The company has established a strong customer base, including major automotive manufacturers such as SAIC, Chery, Dongfeng, Geely, Changan, and BYD, and has achieved significant milestones in production and certification [1][12]. Summary by Sections Company Overview - Youjia Innovation, founded in 2014 and headquartered in Shenzhen, has set up data and research centers in multiple cities and is recognized as one of the few companies in China capable of full-stack self-developed autonomous driving solutions [1][11]. - The company has been awarded the "2023 Supplier Innovation Award" by ZF Group and is among the first to help vehicle manufacturers obtain EU DDAW certification for driver monitoring systems [1][11]. Business Lines - Youjia has strategically developed three main business lines: intelligent driving solutions, intelligent cockpit solutions, and vehicle-road collaboration [2][22]. - By the end of 2024, Youjia's intelligent driving solutions are expected to be in mass production for 67 models across 22 manufacturers, with sales exceeding 900,000 units [2][12]. Financial Projections - Revenue projections for Youjia indicate significant growth, with expected revenues of RMB 1.025 billion in 2025, RMB 1.501 billion in 2026, and RMB 2.095 billion in 2027, reflecting year-on-year growth rates of 56.6%, 46.4%, and 40.0% respectively [2][39]. - The company is projected to achieve a net profit of RMB 0.9 billion by 2027, marking a turnaround from previous losses [2][39]. Industry Context - The autonomous driving solutions market in China is expected to grow significantly, with a projected market size of RMB 4.312 trillion by 2028, driven by increasing consumer demand for intelligent features and stable automotive sales growth [42][50]. - The global market for intelligent driving solutions is also on the rise, with a forecasted growth from RMB 589.9 billion in 2023 to RMB 1.3303 trillion by 2028, indicating a compound annual growth rate of 17.7% [42][50].