(1) Ningbo Junma holds 12.31% of the shares of Foretek, and Li Shufu is the ultimate beneficiary.

(2) In addition, Ge Weidong's Chaos Investment and a number of state-owned assets also invested in Foretek.

(3) At present, the company has set off a wave of listing, but profitability is still a problem.

"Science and Technology Innovation Board Daily" on November 26 (Reporter Chen Mei) Another intelligent driving solution provider sprints to the Hong Kong Stock Exchange!

Recently, Foretek (Zhejiang) Intelligent Technology Co., Ltd. (hereinafter referred to as "Foretek") submitted a prospectus to the Hong Kong Stock Exchange. Founded in 2016, Foretek is a company focusing on advanced driver assistance systems (ADAS) and autonomous driving system (ADS) technology, according to data from the Financial Associated Press.

Ningbo Junma Investment Partnership (Limited Partnership) is the largest shareholder of Foretek, holding 12.31% of the shares. Equity penetration shows that Li Shufu is the ultimate beneficiary of the former, with a shareholding ratio of more than 90%.

In other words, once the IPO of the Foretek Hong Kong Stock Exchange is successful, Li Shufu, the automobile tycoon, will usher in another IPO.

Li Shufu holds shares and incubates a smart driving IPO

In fact, in addition to the equity relationship between Fretech and Li Shufu, the reporter of "Science and Technology Innovation Board Daily" noticed that Zhang Lin, the founder of Fretek, was also an executive of China Geely Holdings, which is controlled by Li Shufu.

According to the prospectus, Zhang Lin worked for Geely Holding and served as vice president from April 2011 to February 2016. At the same time, Zhang Lin was responsible for Geely's overseas marketing and factory construction during his tenure at Geely Holdings. Prior to joining Geely, Lin worked at Chrysler and Chery AUTOMOBILE Co., Ltd.

As of June 30, 2024, Foretek has established cooperative relationships with 46 OEMs, with more than 280 fixed-point projects and more than 200 mass production projects.

It is worth mentioning that Geely Holdings, which is owned by Li Shufu, also has direct business dealings with Foretek. According to the prospectus, from 2021 to the first half of 2024, the sales amount of related products imported by Foretek from Geely Group will be 100 million yuan, 64.532 million yuan and 393 million yuan respectively, and the proportion of revenue from a single major customer in the same period will be 43.5%, 22.0% and 43.3%.

According to the disclosure, Foretek's business has gradually covered the full product line of all Geely's passenger car and commercial vehicle brands, including solutions, controllers, cameras, and radars, which are used for the entire L0 to L2+/L2++ and above solutions.

Regarding this kind of business dealing, an early VC investor told the reporter of the "Science and Technology Innovation Board Daily", "In the market, there are actually many large groups to incubate companies according to business needs, and VC institutions also see more projects related to industrial capital." ”

"This kind of incubated project, although there are related party transactions, is more certain in its growth. At the same time, as a tentacle, the industrial capital of large groups also needs innovation to develop new technologies. ”

According to the prospectus, with the support of Geely Holdings, from 2021 to the first half of 2024, Foretek's revenue will be 333 million yuan, 328 million yuan, 908 million yuan and 312 million yuan respectively, of which the revenue growth rate in the first half of this year will be 33.68%. It is estimated that from 2025 to 2027, the amount of products and services provided by the company to Geely Holding will reach 1.115 billion yuan, 1.33 billion yuan, and 1.548 billion yuan.

With a valuation of 6 billion, private equity boss Ge Weidong and local state-owned assets have invested

Due to the bundling with Geely Holdings, Foretek has attracted much attention in the primary market, and has experienced three rounds of financing in Series A, Series B and Series C since its establishment.

The reporter of "Science and Technology Innovation Board Daily" noticed that the cost of Foretek's shareholding rose from the initial 3.8 yuan/share to 6.15 yuan/share; The valuation has also risen from 3.5 billion yuan at the beginning to 6.06 billion yuan in the last round.

Among them, the B round of financing of Foretek has accumulated nearly 1 billion yuan, attracting chaos investment, as well as Yunxiang Wuzhen, Shuiyun Wuzhen, Tongxiang Jintong, Shaanxi Dechuang, Jiangsu Qiquan, Jiaxing Lingsai and other local state-owned assets.

In recent years, the private equity boss has focused on the primary market and invested in four IPOs, including Huizhiwei (688521), Haiguang Information (688041), Haite Biotechnology (300683), and Orient Securities (600958), with a current market value of 24.416 billion yuan, 274.504 billion yuan, 3.691 billion yuan and 87.940 billion yuan respectively.

The prospectus disclosed that Ge Weidong sold 20 million yuan at a price of 6.15 yuan per share, holding 3.4% of the shares of Foretek before the IPO.

A number of local state-owned assets are also external institutional shareholders of Foretek.

Equity penetration shows that the Tongxiang Municipal Finance Bureau holds 4.69%, 4.18% and 0.85% of the shares respectively through Yunxiang Wuzhen, Shuiyun Wuzhen and Tongxiang Jintong; Behind Jiangsu Qiquan is the Jiangsu Provincial Department of Finance, which holds shares in Foretek through the Jiangsu Provincial Government Investment Fund (Limited Partnership); In addition, Shaanxi Dechuang also has the figure of Shaanxi State-owned Assets Supervision and Administration Commission behind it, which indirectly holds shares through Shaanxi Automobile Holding Group.

In addition, PICC Kechuang, Guangdong Everbright (controlled by Sun Life Everbright Life Insurance Co., Ltd.), Fengzhang Qingyu (TCL Industrial Holdings), as well as SAIC, Dongfeng, BAIC and other leading institutions also participated in the financing of Foretek.

It is worth mentioning that among the above-mentioned investors, the Tongxiang Municipal Finance Bureau holds nearly 10% of the shares, and the registered place of Foretek is in Tongxiang City, Jiaxing City, Zhejiang Province.

"Zhijia" companies set off a wave of listing, and profitability is still the focus of attention

Since the beginning of this year, companies in the field of intelligent driving have set off a wave of listings. Up to now, including Cidi, Horizon, Pony.ai, WeRide, etc., have been listed or submitted listing applications.

"Behind the IPO of intelligent driving enterprises, it is not unrelated to its current operating pressure, such as large R&D investment and unabated profit pressure." The above-mentioned early VC investors said.

Taking Foretech as an example, the "Science and Technology Innovation Board Daily" noted that although the company has the support of Geely Holdings in terms of revenue, in terms of net profit, the losses during the reporting period reached 296 million yuan, 855 million yuan, 738 million yuan and 278 million yuan.

This situation is also reflected in other smart driving companies. From 2021 to the first half of 2024, the company lost 180 million yuan, 263 million yuan, 255 million yuan, and 123 million yuan respectively, and the adjusted net loss was 114 million yuan, 159 million yuan, 138 million yuan, and 59 million yuan respectively, with a cumulative loss of 470 million yuan in three and a half years.

Jiang Han, a senior researcher at Pangu Think Tank, said in an interview with the Science and Technology Innovation Board Daily that the high investment in R&D, the slower-than-expected commercialization speed, and market competition are the main reasons for the company's losses.

In Jiang Han's view, the company faces fierce market competition and needs continuous financing to maintain operations. "Especially in the case of a downturn in the primary market, listing has become the main way for smart driving companies to raise funds to alleviate financial pressure."

According to the prospectus, from 2021 to the first half of 2024, Foretek's R&D investment will reach 185 million yuan, 515 million yuan, 561 million yuan and 187 million yuan respectively, accounting for 55.5%, 157.58%, 61.8% and 60.6% of the year's revenue.

In terms of commercialization, a primary market investor told the "Science and Technology Innovation Board Daily" reporter that as of now, the practical application of intelligent driving is still below the L3 level, but L2 and L2+ autonomous driving are growing rapidly. Therefore, "the overall market demand has not yet been fully released, and users' acceptance and willingness to pay for high-level autonomous driving need to be improved." "Collection

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