The world of autonomous driving is rapidly evolving, and at the forefront of this revolution is a company known as Haomo TechFounded in 2019 as a supplier of autonomous driving solutions, Haomo Tech has frequently captured headlines, especially concerning its anticipated initial public offering (IPO) on the Hong Kong Stock ExchangeRecently, speculation arose regarding a potential delay in its IPO plans when Wei Jianjun, the chairman of Great Wall Motors, allegedly halted the process internallyHowever, this was promptly refuted by the company's chairman, Zhang Kai, who reaffirmed that their IPO efforts are ongoing, with an expected timeline set for 2025.

Haomo Tech’s journey began as an offshoot of Great Wall Motors, specifically its Intelligent Driving Division, illustrating the strong ties between the two entitiesWith the experienced Gu Weihua, previously with Baidu, at the helm as CEO, the company aims to leverage its roots to advance its technological capabilities

Ownership data shows that Wei Jianjun remains the largest shareholder, holding a significant stake of 37.1871%, a reflection of the intertwining relationship that exists within the automotive giant and its autonomous sibling.

Initially, Haomo Tech had ambitions to achieve profitability by 2022 and to list on the STAR Market by 2023. However, these targets have seen delaysRumors of a Hong Kong IPO emerged last year, but those claims were swiftly denied, showcasing the volatility of the investment landscape that startups in the tech sector often navigate.

Despite being an independent entity since its inception, Haomo Tech continues to maintain a close-knit partnership with Great Wall MotorsIn their 2022 annual report, Haomo Tech was prominently featured as part of Great Wall's strategy, with Wei Jianjun serving on Haomo’s boardThis collaboration is more than a mere corporate formality; it represents a crucial underpinning of Haomo's operational framework

As of February 2024, Haomo Tech's HPilot advanced driving assistance system was being used in over 20 vehicle models, amassing an impressive 120 million kilometers driven in assisted modeYet, its customer portfolio remains largely confined to its parent company, highlighting the dependency that exists.

In a candid acknowledgment of the strategic partnership, CEO Gu Weihua remarked, "Great Wall is a robust support—it has sold a million vehicles for several consecutive years with plans to reach four million by 2025. Why wouldn't I focus on serving Great Wall well?" His pragmatic approach underscores the importance of this relationship in an era where many automotive manufacturers are increasingly cautious about sharing critical operational data with tech-driven firms, due to competitive secrecy and strategic advantages.

However, it's worth noting that Great Wall's recent performance in the electric vehicle sector hasn't matched expectations

Although the company's total sales have consistently exceeded one million units annually, the proportion of electric vehicles sold remains modestFor instance, figures show sales of 137,000, 132,000, and 263,000 electric vehicles in recent years, only accounting for 10.7%, 12.3%, and 21.5% of total sales, respectivelyThis gap highlights both a challenge and an opportunity for Haomo Tech as it seeks to innovate while remaining tethered to Great Wall's performance.

While for many, Haomo Tech is seen as a startup with immense potential from birth—often referred to as being born with a silver spoon—they face the exigent challenge of gathering vast amounts of driving data necessary for machine learning and improvement of their autonomous systemsThis need for data sharing has created an atmosphere of hesitancy among other automotive manufacturers who remain wary of too close a partnership, fearing market repercussions.

Intriguingly, Haomo Tech is not without competition in the space

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Earlier this year, it was reported that Great Wall has begun collaborating with Yuanrong Qixing, a second supplier of intelligent driving solutions, indicating that despite Haomo's ties, the parent company is proactively seeking diversified technologies, clearly illustrating that reliance on a single provider can pose risks in an evolving market.

As the automotive industry faces increased competition and an ongoing price war, the challenge of sustaining profitability while navigating price reductions becomes steeperWith this heightened pressure, the reverberations naturally seep into the upstream driving technology sectors, prompting suppliers like Haomo Tech to rethink their strategiesChairman Zhang Kai has suggested a renewed focus for 2024 with plans to offer products that deliver exceptional value for money, aiming to expand their customer base and significantly boost commercial applications and production volumes.

For companies within the autonomous driving sector, the path to an IPO is fraught with challenges and complexity

Since the beginning of the year, over ten autonomous driving-related companies have embarked on the journey toward going publicNotable among them are Horizon Robotics, which recently reached a staggering valuation of $8.71 billion, and others like Momenta and Pony.ai, each wrestling with the dual pressures of rapid development costs against the backdrop of market expectations.

With research and development spending far exceeding revenue for many companies—such as WeRide, whose cumulative R&D expenditure from 2021 to 2023 reached 2.26 billion yuan against revenues of only 1.068 billion yuan—the struggle to achieve financial sustainability looms largeOther firms, including the chip manufacturer Black Sesame, reported R&D expenses amounting to five times their revenue during the same period, tallying net losses of nearly 5.87 billion yuanThese daunting figures paint a stark picture of the financial pressures inherent in the autonomous driving industry.

In Haomo Tech’s case, the company has undergone several rounds of funding, with notable investors including Great Wall Motors, Meituan, and Hillhouse Capital backing its capital needs

The first half of 2024 saw an influx of funding as Haomo completed two significant rounds: a series B1 financing of over 100 million yuan in February, followed by an additional 300 million yuan in series B2 funding in April, aimed at bolstering research into autonomous driving technology.

While Haomo Tech has indicated that it achieved over a hundred million yuan in revenue in 2021, details on its profitability and ongoing financial commitments remain murkyAn eventual public listing could relieve some financial burdens in the short term, but the deeper question remains—can Haomo Tech demonstrate its ability to operate on a commercial level and insure its sustainability in an intensely competitive landscape? The year 2024 is shaping up to be critical for the intelligent driving industry, where the journey toward profitability and the anticipated IPO is expected to be laden with both obstacles and opportunities.