---
title: "Behind EACON's IPO: Transition from heavy assets to light assets still incurs a loss of 1.2 billion, operating cash flow continues to be under pressure"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/292417287.md"
description: "EACON officially listed on the Hong Kong Stock Exchange with an issue price of HKD 87.92. As the largest provider of autonomous driving solutions in China's mining sector, it holds a market share of approximately 37.6%. Despite strong revenue growth, the company has accumulated losses exceeding 1.2 billion yuan, and its operating cash flow continues to be under pressure as it transitions from a heavy asset model to a light asset model"
datetime: "2026-07-13T00:20:44.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/292417287.md)
  - [en](https://longbridge.com/en/news/292417287.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/292417287.md)
generator: "portal-rs"
---

# Behind EACON's IPO: Transition from heavy assets to light assets still incurs a loss of 1.2 billion, operating cash flow continues to be under pressure

**"Harbor Business Observation" by Shi Zifu**

On July 8, EACON (07687.HK), known as "the world's first stock for autonomous driving in mining areas," officially landed on the Hong Kong Stock Exchange. It is reported that the company's issue price was HKD 87.92, and as of the close on July 10, the stock price was HKD 90.100, with a market capitalization of approximately HKD 13.323 billion.

According to data from Frost & Sullivan, based on revenue in 2025, EACON ranks first in China's commercial vehicle intelligent driving market; in terms of the number of active autonomous mining trucks, it is also the largest provider of autonomous driving solutions in China's mining areas, with a market share of approximately 37.6%. As of December 31, 2025, the company's deployed fleet includes 2,580 active autonomous mining trucks.

Additionally, according to Frost & Sullivan, China's autonomous driving solutions market for mining areas is entering a rapid scaling phase, with the penetration rate of autonomous mining trucks expected to rise from about 12% in 2025 to over 50% by 2030, and the market size in 2025 is projected to reach RMB 3.8 billion, with a compound annual growth rate of 171.4% from 2021 to 2025.

In terms of the global market, demand in major mining areas such as Australia, Canada, and Chile is also continuously growing, with the market size expected to increase from USD 1 billion in 2025 to USD 7.3 billion by 2030.

**1**

**Cumulative losses exceed 1.2 billion, shifting from heavy assets to light assets**

EACON focuses on the commercialization of L4 level autonomous driving solutions in the mining industry and is one of the early entrants into the autonomous mining transportation field. The company's solutions are designed to meet the specific operational needs of mining areas, particularly suitable for complex terrains, limited human resources, and high safety requirements.

During the historical performance period, EACON's revenue mainly came from autonomous driving solutions for mining areas and intelligent mining digitalization solutions.

From 2023 to 2025 (hereinafter referred to as the reporting period), EACON's revenue from autonomous mining truck products and solutions in closed environments was HKD 266 million, HKD 974 million, and HKD 1.428 billion, accounting for 98.2%, 98.7%, and 99.5% of total revenue during the respective periods, indicating a concentration in a single business.

The company stated that during the historical performance period, it achieved strong revenue growth and significant profit margin expansion, thanks to the rapid scaling of autonomous driving solutions in mining areas and a strategic focus on high-profit service products. In the early stages, a heavy asset company fleet model was adopted to manage its own fleet, reducing customer adoption barriers and ensuring early deployment success. With the successful benchmark deployment and the expansion of fleet footprints, customer trust and solution standardization have improved. Therefore, the proportion of the light asset customer fleet model in revenue has begun to increase. This trend is expected to continue, positioning the business as a more sustainable and high-profit model, built on recurring revenue and long-term customer relationships In direct terms, the autonomous mining truck products and solutions in a closed environment mainly operate through the fleet model provided by the company and the fleet model provided by customers.

During the reporting period, the revenue from the company-provided fleet model was RMB 153 million, RMB 520 million, and RMB 613 million, accounting for 56.5%, 52.7%, and 42.7% of the total revenue for the respective periods, with a slight decline in the proportion of the company-provided fleet model in 2025. The revenue from the company-provided fleet model is closely related to the average monthly number of active mining trucks, which significantly increased from 139 units in 2023 to 817 units in 2025.

The company stated that it is actively transitioning from a capital-intensive company-provided fleet model to a lighter capital and higher profit customer-provided fleet model. Under the customer-provided fleet model, customers purchase or lease vehicles, while the company provides autonomous driving technology, software support, and auxiliary services for mining areas.

During the same period, the revenue from the customer-provided fleet model was RMB 113 million, RMB 453 million, and RMB 813 million, accounting for 41.7%, 46.0%, and 56.8% of the total revenue for the respective periods; the average monthly number of active autonomous mining trucks under the customer-provided fleet model was 20 units, 89 units, and 800 units.

At the end of each reporting period, the number of active autonomous mining trucks under the customer-provided fleet model was 60 units, 291 units, and 1,709 units, while the number of active autonomous mining trucks under the company-provided fleet model was 248 units, 712 units, and 871 units.

The average number of active autonomous mining trucks per mining site under the customer-provided fleet model was 60 units, 29 units, and 66 units, while the average number of active autonomous mining trucks per mining site under the company-provided fleet model was 41 units, 45 units, and 54 units.

Additionally, during the reporting period, the total material transportation volume was 30.6 million cubic meters, 134 million cubic meters, and 308 million cubic meters, respectively.

On other key data aspects, during the reporting period, the average service life of active autonomous mining trucks was 7.1 years, 7.3 years, and 7.1 years, while the average remaining service life of active autonomous mining trucks was 6.6 years, 6.6 years, and 6.1 years.

**In terms of overall financial performance, during the reporting period, EACON achieved revenues of RMB 271 million, RMB 986 million, and RMB 1.435 billion, with net losses of RMB -334 million, RMB -390 million, and RMB -516 million, and net profit margins of -123.2%, -39.5%, and -35.9%, respectively. The total loss amount for the company over the past three years was RMB 1.24 billion.**

During the period, the adjusted net profit (measured under non-Hong Kong Financial Reporting Standards) was RMB -284 million, RMB -303 million, and RMB -484 million, while the adjusted EBITDA (measured under non-Hong Kong Financial Reporting Standards) was RMB -228 million, RMB -176 million, and RMB -193 million In addition, during the reporting period, EACON's gross margins were -18.6%, 7.6%, and 10.1%, respectively. In 2024, the company's gross margin has turned positive.

Regarding the reasons for the continued losses, EACON stated that there was no recorded net profit during the historical performance period and it is expected to continue to incur net losses in the short term. The company first deployed solutions in the mining field in July 2020. The cumulative losses were mainly due to the significant upfront investment required for the fleet model provided by the company, ongoing R&D efforts to establish the technical foundation for the solutions, and relatively high customer acquisition costs associated with the emerging industry. Additionally, the aggressive market expansion strategy adopted in the early stages of commercialization, prioritizing rapid deployment and extensive coverage to acquire quality customers, led to increased initial revenue costs. These factors resulted in a gross loss in 2023, with relatively low gross margins expected in 2024 and 2025.

Regarding EACON's various expense inputs, during the reporting period, the company's R&D expenditures were RMB 177 million, RMB 208 million, and RMB 271 million, accounting for 65.4%, 21.1%, and 18.8% of total revenue, respectively; administrative expenses were RMB 37.159 million, RMB 85.663 million, and RMB 128 million, accounting for 13.7%, 8.7%, and 8.9% of total revenue, respectively; distribution and sales expenses were RMB 16.571 million, RMB 31.182 million, and RMB 45.862 million, accounting for 6.1%, 3.2%, and 3.2% of total revenue, respectively.

Looking ahead, EACON expects to achieve sustainable profitability through a combination of business model transformation, revenue scale, and cost optimization.

**2**

**Proportion of Top Five Customers Declines, Operating Cash Flow Continues to Deteriorate**

EACON's customer base mainly includes mining companies and their contractors. During the past performance period, a significant portion of the company's revenue came from a limited number of customers.

During the reporting period, EACON's consolidated revenue from the top five customers was RMB 256 million, RMB 825 million, and RMB 950 million, accounting for 94.4%, 83.7%, and 66.3% of total revenue, respectively; revenue from the single largest customer was RMB 113 million, RMB 537 million, and RMB 512 million, accounting for 41.7%, 54.5%, and 35.7% of the company's revenue, respectively.

The company admitted that it may continue to rely on sales to a relatively small number of customers in the foreseeable future. Furthermore, the revenue amount from any single major customer or the overall concentration of revenue among major customers may fluctuate due to various factors. Such fluctuations may affect business stability, cash flow, and financial performance, and may pose greater risks to the company if it loses a major customer or if there are significant changes in its customer base.

At the same time, the total procurement amount from the top five suppliers was RMB 384 million, RMB 835 million, and RMB 1.086 billion, accounting for 62.7%, 54.3%, and 60% of total procurement, respectively; the procurement amount from the single largest supplier was RMB 261 million, RMB 444 million, and RMB 604 million, accounting for 42.6%, 28.9%, and 33.4% of procurement, respectively Renowned economist and Vice President of the China Business Economics Association, Song Xiangqing, believes that the revenue share of the top five customers of EACON continues to decline and improve. However, the long-term high dependence on a few major customers and a single leading customer is a practical issue arising from the scenario attributes of the unmanned driving segment in mining and the market structure. From an industry perspective, there are only a few large state-owned enterprises in the energy and mining sectors in China that have the budget for large-scale intelligent open-pit mining and can support the implementation of unmanned driving fleets of hundreds of vehicles. The limited number of players on the supply side and the concentration of quality project resources on the demand side naturally lead to a high concentration of customers in the segment. From the perspective of business operational risk, the revenue share from the single largest customer has consistently maintained at around 30-40%. If this customer reduces orders or delays project implementation due to capital expenditure cycles, industry price fluctuations, or internal supplier strategy adjustments, it will significantly impact the company's short-term revenue scale. Additionally, major customers have stronger bargaining power, and the continuous demand for customized development will also compress project profit margins.

However, it is important to objectively recognize that the company's current customers are all industry leaders, with relatively stable credit qualifications and a high retention rate of existing projects. The key path to alleviating this risk in the future lies in continuously expanding small and medium-sized mining customers, extending into diversified mineral types such as metal and building materials, focusing on overseas mining markets, and enriching lightweight cooperation models such as short-term rentals and solution deliveries, gradually optimizing the customer revenue structure and reducing the impact of single customer order fluctuations on the operational fundamentals.

With a high concentration of downstream major customers, EACON also faces the explicit issue of a surge in accounts receivable and accounts payable.

At the end of each reporting period, the company's trade receivables and notes receivable were 115 million yuan, 620 million yuan, and 1.091 billion yuan, respectively, while the turnover days for trade receivables were 48.8 days, 86.9 days, and 168.5 days, respectively; trade and other payables were 189 million yuan, 451 million yuan, and 581 million yuan, respectively.

**At the end of each reporting period, EACON's net cash flow from operating activities was -251 million yuan, -713 million yuan, and -394 million yuan, continuing to flow out.**

EACON also plans to strengthen cash flow management by improving the accounts payable cycle. Specifically, it will negotiate more favorable payment terms with major suppliers through bulk purchasing; distinguish between necessary and discretionary expenditures and implement stricter budget discipline; adjust the employee team structure according to the current development stage, increasing the proportion of performance-based compensation to enhance labor productivity; and optimize inventory management through more precise planning based on orders, setting appropriate minimum inventory thresholds, and reducing the overall inventory levels of major material categories.

Song Xiangqing analyzes that EACON's continuous losses and ongoing cash flow outflows are primarily due to the structural investment pressure in the early commercialization stage of the L4 unmanned driving industry in mining, combined with the company's unique heavy asset operation model.

Firstly, there is a long-term rigid R&D investment on the technology side. The company needs to maintain a high-educated R&D team of hundreds of people to continuously iterate the full-stack autonomous driving software and hardware, mining cloud platform, and safety control systems. The annual R&D expenditure is substantial, which is a common upfront cost for high-level autonomous driving companies in closed scenarios Secondly, in terms of business model, the company has a large number of self-owned unmanned mining trucks operating under the "vehicle-holding model," which requires upfront procurement, modification, and operation of a large number of mining vehicles to form a fleet asset. This leads to significant capital expenditures being front-loaded, while cash inflows rely on long-term operational service installments, extending the cash recovery cycle.

Thirdly, the delivery of mining projects has customized characteristics, with significant differences in geology, scheduling rules, and safety standards across different mining areas. Each large project requires targeted engineering implementation and long-term on-site operation and maintenance, resulting in high delivery costs and delayed marginal profit release. Meanwhile, downstream mining customers have longer payment cycles, leading to continuously rising accounts receivable that further occupy operating funds. Although the company's revenue growth is impressive, the industry is still in the early stages of large-scale penetration, and the gross profit from orders temporarily cannot cover the initial capital expenditures, research and development, and other fixed costs, resulting in a situation of increasing revenue without increasing profit and continuous cash outflow. In the long run, whether cash flow can be reversed depends on the standardization of project replication, optimization of the self-owned fleet model, and continuous improvement of unit service gross profit.

Against the backdrop of ongoing operational losses, EACON heavily relies on external debt for funding, with its borrowing sources mainly consisting of bank loans and financing leases to maintain daily operations and capital expenditures.

**EACON's borrowings mainly include bank loans and borrowings under financing lease agreements. As of the end of each reporting period, the company's debts were RMB 1.334 billion, RMB 1.157 billion, and RMB 1.369 billion, respectively. By the end of April this year, the debt amount rose to RMB 1.607 billion.**

**![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OGCnaIRdqlm2V3AF-qQy6m3LoA2DqyvXYxYnFLPjal0cAAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)**

In detail, EACON recorded current borrowings of RMB 166 million, RMB 677 million, and RMB 689 million, rising to RMB 1.004 billion in April this year; non-current borrowings were RMB 107 million, RMB 447 million, and RMB 615 million, with the company's borrowing contract interest rates ranging from 0.8% to 7.2%.

As of April 30, 2026, the company has committed unused bank financing of RMB 1.302 billion, all granted through signed agreements or written confirmations from financial institutions.

In terms of cash on the books, as of the end of each reporting period, the company's year-end cash and cash equivalents balances were RMB 67.966 million, RMB 46.027 million, and RMB 245 million, respectively.

As of the end of each reporting period, EACON's current ratios were 0.75, 0.84, and 1.40, and its quick ratios were 0.72, 0.79, and 1.31, indicating a continuous improvement in short-term solvency.

GuoZheng International Securities research report points out that **advantages and opportunities include being the absolute leader in the unmanned driving vertical track in Chinese mining areas, leading market share; fully self-developed L4 level unmanned driving technology adaptable to complex scenarios of various mining types and vehicle models; a scalable business model driven by benchmark deployment and replication; and collaboration with industry leaders to establish an unmanned driving ecosystem in mining areas, such as the State Energy Group, Zijin Mining, TBEA, and State Power Investment Corporation.** Weaknesses and risks are reflected in continuous losses and pressure on operating cash flow; downstream mining capital expenditures are subject to cyclical fluctuations, and slower-than-expected penetration of autonomous driving technology will affect order releases; the rapid pace of technological iteration may pose a risk of declining product competitiveness if the conversion efficiency of R&D investment is insufficient. \*\*(Produced by Harbor Finance)

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**