Core Viewpoint - Magic Vision Technology (Shanghai) Co., Ltd. is preparing for an IPO on the Hong Kong Stock Exchange, facing a paradox of revenue growth while continuing to incur losses, with cumulative losses exceeding 773.54 million yuan over the past three and a half years [2][5]. Financial Performance - The company has reported continuous revenue growth, with total revenues of 117.8 million yuan in 2022, 146.5 million yuan in 2023, and projected revenues of 356.84 million yuan in 2024, marking a year-on-year growth of 143.53% in 2024 [4][5]. - Despite the revenue increase, the company has not achieved profitability, with annual losses of 200.43 million yuan in 2022, 227.95 million yuan in 2023, and 233.50 million yuan in 2024, leading to a total loss of 1.0228 billion yuan by June 2025 [5][6]. Business Segments - The primary revenue-generating segment is the Magic Drive solution, which contributed sales of 71.06 million yuan in 2022, 69.81 million yuan in 2023, and 227.07 million yuan in 2024, accounting for 60.3%, 47.6%, and 63.6% of total revenue respectively [3][4]. Capital and Financing - Since its establishment in 2015, the company has completed 11 rounds of financing, raising nearly 900 million yuan to support its operations despite ongoing losses [7]. - In June 2025, the company raised 293 million yuan at a share price of 9.4 yuan, but shortly after, shares were transferred at prices ranging from 3.8 yuan to 8.4 yuan, raising questions about the fairness of the pricing [7][8]. Shareholder Transactions - Notably, shareholder Chen Jianfei increased his stake at 9.4 yuan per share in June 2025, only to sell shares at 8.4 yuan per share a month later, indicating a potential discrepancy in share valuation [8][9].

Core Viewpoint - The rapid development of the intelligent driving industry driven by artificial intelligence is leading participants to sacrifice profits for higher market share, as exemplified by the significant losses of the company Magic Vision Smart, which has accumulated losses exceeding 700 million yuan since 2022 and is now seeking to go public in Hong Kong to raise funds [1][10]. Company Overview - Magic Vision Smart, established in 2015, is one of the few third-party providers in China with self-developed AI algorithms for intelligent driving solutions, having developed its first generation of visual perception algorithms in 2017 and reaching the fifth generation by 2025 [2][4]. - The company offers three main business solutions: Magic Drive, Magic Parking, and Magic Safety, with revenue shares of 61.8%, 27.3%, and 10.9% respectively in the first half of 2025 [2][3]. Financial Performance - The company has experienced a compound annual growth rate (CAGR) of 73.9% in revenue from 2022 to 2024, but has also reported net losses of 200 million yuan, 228 million yuan, 233 million yuan, and 112 million yuan during the same period, totaling 773 million yuan in losses, which represents a loss ratio of 95.5% [1][4]. - As of August 2025, the company had cash and cash equivalents of only 144 million yuan, which could be depleted within a year at the current burn rate, indicating an urgent need for capital [1]. Market Position and Competition - In the competitive landscape, Magic Vision Smart holds a market share of only 0.4%, ranking eighth among third-party solution providers in China, while the largest competitor holds an 8% market share [8]. - The company has a high customer concentration, with the top five customers contributing 65.9% of revenue, and the largest customer accounting for 21.9% [4]. Industry Growth Potential - The global market for intelligent driving solutions is projected to reach 320 billion yuan by 2024, with a five-year CAGR of 27.6%, and China is expected to account for 912 billion yuan of this market, growing at a CAGR of 43.3% [5][8]. - L2 and L2+ levels are anticipated to dominate the Chinese intelligent driving market, with projected market sizes of 452 billion yuan and 357 billion yuan respectively by 2024 [5]. Investment and Valuation - The company has undergone multiple rounds of financing, with its post-investment valuation increasing from 434 million yuan in 2017 to 2.543 billion yuan in 2025, reflecting a 4.86 times increase [8][9]. - The company has attracted significant interest from investors due to its core technology and self-research capabilities, although it faces challenges in achieving profitability amidst ongoing losses [10].

Core Insights - The article discusses the rapid development of the smart driving industry driven by artificial intelligence, highlighting the sacrifices made by participants in terms of profits to gain market share. The focus is on Magic Vision, a smart driving solution provider that has incurred significant losses since 2022 and is now seeking to go public in Hong Kong to raise funds [1][12]. Company Overview - Magic Vision has accumulated losses exceeding 700 million yuan since 2022 and is ranked eighth among third-party solution providers in China's smart driving solutions market, with a projected revenue compound annual growth rate (CAGR) of 73.9% from 2022 to 2024 [1][12]. - The company has developed its own AI algorithms since its establishment in 2015, with its solutions supporting driving functions from L0 to L4 levels [1][5]. Business Segments - The company operates three main business segments: Magic Drive (61.8% of revenue), Magic Parking (27.3%), and Magic Safety (10.9%) as of the first half of 2025. The revenue share of Magic Safety has been declining, while Magic Parking has been compensating for this decline [2][3]. Financial Performance - The company's revenue for 2022 was 117.8 million yuan, which increased to 146.5 million yuan in 2023, with a projected revenue of 356.8 million yuan for 2024. However, the company has faced continuous net losses, with a cumulative loss of 773 million yuan by mid-2025 [3][6]. - The gross margin has decreased from 25.6% in 2022 to 14.2% in 2024, but improved to 20.1% in the first half of 2025. The company has made significant improvements in its expense ratios, particularly in R&D [6][12]. Market Dynamics - The global smart driving solutions market is projected to reach 320 billion yuan by 2024, with China being a major market. The CAGR for the Chinese market is expected to be 43.3%, indicating strong growth potential [6][7]. - The competition in the smart driving industry is intense, with a shift towards in-house development by automotive companies reducing the demand for third-party solutions. Magic Vision holds a market share of only 0.4% [10][12]. Investment Landscape - Magic Vision has undergone multiple rounds of financing, with its valuation increasing from 434 million yuan in 2017 to 2.543 billion yuan in 2025. The company has attracted significant investment interest due to its technological capabilities [10][11]. - The upcoming IPO is seen as a means to replenish cash flow, as the company has limited cash reserves and is facing high operational costs [1][12].

Core Viewpoint - Magic Vision Technology (Shanghai) Co., Ltd. has submitted its prospectus for an IPO on the Hong Kong Stock Exchange, aiming to leverage its AI-driven intelligent driving solutions to attract investment [1][2]. Company Overview - Magic Vision is an AI innovation-driven provider of intelligent driving solutions, offering integrated hardware and software solutions with L0-L4 level capabilities [2]. - The company has developed a comprehensive self-research technology system from underlying algorithms to application layers, focusing on safety and user experience [2]. - Magic Vision's solutions have been selected by OEMs for 92 vehicle models, with over 3.3 million units delivered [2]. Financial Performance - Revenue for the years 2022, 2023, 2024, and the first half of 2025 was approximately RMB 118 million, RMB 147 million, RMB 357 million, and RMB 189 million, respectively [2]. - Net losses for the same periods were approximately RMB 200 million, RMB 228 million, RMB 234 million, and RMB 111 million [2]. - Adjusted net losses were approximately RMB 136 million, RMB 166 million, and RMB 170 million for 2022, 2023, and 2024, with the first half of 2025 showing a loss of about RMB 85 million [5]. Revenue Growth and Margins - Revenue growth rates were 19.9% in 2022, 24.4% in 2023, and projected at 143.5% for 2024 [6]. - Gross margins were 25.6% in 2022, 13.7% in 2023, and 14.2% in 2024, with a notable drop in 2023 followed by a slight recovery in 2024 [5][6]. Business Structure - The majority of revenue comes from the Magic Drive solution, contributing approximately RMB 71 million, RMB 69 million, RMB 227 million, and RMB 117 million in respective years [7]. - The Magic Parking solution has also seen growth, contributing RMB 1.2 million, RMB 1.4 million, RMB 8.6 million, and RMB 5.1 million, becoming the second-largest revenue source [7]. Investment and Shareholding - Magic Vision was established in August 2015, with a registered capital of approximately RMB 16.9 million [9]. - The company has undergone multiple financing rounds, with the latest D round in June 2025 raising about RMB 293 million, leading to a post-money valuation of approximately RMB 2.54 billion [11]. - The largest shareholder is Yu Zhenghua, who controls approximately 29.65% of the voting rights through various entities [13].