Core Viewpoint - Chengtai Technology, a radar supplier focusing on automotive millimeter-wave radar, is preparing for an IPO in Hong Kong, aiming to become the "first stock of millimeter-wave radar" in the market [1]. Company Overview - Chengtai Technology, founded in 2016 by former Huawei employees, specializes in automotive millimeter-wave radar, providing standardized hardware and customizable software [2][29]. - The company has completed 8 rounds of financing, raising a total of 359 million RMB, with a post-financing valuation of 1.32 billion RMB [1][29]. Product Offerings - Chengtai's core products include forward and corner radars, supporting driving assistance capabilities from L0 to L2+ [2][4]. - The forward radar series for passenger vehicles includes the CTLRR-220 series, with a detection range of up to 260 meters for the upgraded version [4]. - The company is also developing a new generation of central computing radar to enhance performance and simplify hardware [8][10]. Market Position - Chengtai has become the largest supplier of forward millimeter-wave radar in China, holding a market share of 9.3% in 2024 [14]. - The company has established partnerships with over 20 automotive OEMs, with BYD being its largest customer, accounting for over 90% of its revenue in recent years [14][17]. Financial Performance - Chengtai's revenue has shown significant growth, with projections of 348 million RMB in 2024, reflecting a compound annual growth rate (CAGR) of 145.7% from 2022 [17][20]. - The gross profit margin has improved, with the gross margin for forward radar increasing from 29.7% in 2022 to 43.1% in 2024 [20]. - The company is expected to turn profitable in 2024, with an adjusted net profit of 13.95 million RMB [20]. Research and Development - Chengtai has significantly increased its R&D spending, which accounted for 80% of total revenue in 2022, decreasing to 18% in 2024 as revenue grew [21]. - The company plans to use funds raised from the IPO for R&D, equipment upgrades, market expansion, and debt repayment [23]. Industry Trends - The global millimeter-wave radar market is projected to grow from 17.8 billion RMB in 2020 to 29.1 billion RMB in 2024, with a CAGR of 13.1% [34]. - The Chinese automotive millimeter-wave radar market is expected to reach 21.6 billion RMB by 2029, driven by policy mandates and increasing adoption of advanced driver-assistance systems (ADAS) [36][38]. - Chengtai anticipates that the penetration of millimeter-wave radar will continue to increase, especially in mid-range vehicles, as costs decrease and applications expand [42].

Core Viewpoint - Shenzhen Chengtai Technology Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, focusing on millimeter-wave radar for L0-L2+ assisted driving, distinguishing itself from competitors like Hesai and RoboSense, which target higher-level autonomous driving markets [1][2]. Company Overview - Chengtai Technology is the largest domestic supplier of front millimeter-wave radar in China by shipment volume, holding a market share of 9.3% in 2024, and the third-largest overall millimeter-wave radar supplier with a 4.5% market share [2]. - The company was founded by two former Huawei employees, with its product matrix including various models of millimeter-wave radar, primarily used in adaptive cruise control (ACC) and lane-keeping [2]. Customer Dependency - Chengtai Technology heavily relies on BYD as a major customer, with 93.6% of its revenue in 2024 coming from this client, up from 81.9% in 2022, indicating increasing dependency [2][3]. - This reliance on a single customer poses long-term operational risks and may limit the company's technological development autonomy [3]. Financial Performance - The company has seen significant revenue growth, with sales of millimeter-wave radar products increasing from 221,000 units in 2022 to 1.875 million units in 2024, despite a decline in average selling price to 184 RMB per unit [5]. - Revenue surged to 348 million RMB in 2024, a more than fivefold increase from 57.65 million RMB in 2022, yet the company remains unprofitable, recording net losses of 79.17 million RMB, 96.60 million RMB, and 21.77 million RMB from 2022 to 2024 [6]. Cash Flow Situation - Despite multiple rounds of financing, Chengtai Technology faces tight cash flow, holding only 15.87 million RMB in cash and cash equivalents against current liabilities of 620 million RMB, resulting in a net debt of -326 million RMB [7]. Future Outlook - The company needs to diversify its customer base, optimize cost structures, and enhance technological innovation to navigate the competitive landscape and technological advancements in the autonomous driving sector [8].