Hong Kong IPO: MINIEYE IPO Analysis and Subscription Plan
Shenzhen MINIEYE Technology Co., Ltd. (MINIEYE) is a Chinese intelligent driving and smart cockpit solution provider dedicated to empowering automotive intelligence and enhancing driving experience and safety.
1. Development History and Key Milestones:
Founded in December 2014, the founding team laid the foundation with academic and industry experience, driving the development vision through technological innovation.
In 2016, the prototype of the iSafety solution was launched, followed by years of continuous innovation and upgrades, expanding business segments, achieving technological breakthroughs, gaining industry recognition, and completing corporate restructuring. For example, iSafety was delivered at scale in 2017, a new generation of products was launched and secured orders in 2018, the smart cockpit division was established in 2019 to commercialize DMS, and in 2023, it was recognized as a "Specialized, Refined, Distinctive, and Innovative" (SRDI) enterprise and restructured into a joint-stock company.
2. Equity Financing Trajectory:
Since 2015, the company has undergone multiple rounds of financing, from angel rounds to Pre-IPO+ rounds, attracting numerous investors. The registered capital has continuously increased, injecting funds into technology R&D, business expansion, production capacity enhancement, and talent acquisition, driving business development and market layout.
3. Core Products and Solutions:
Intelligent Driving Solutions: Covering the iSafety and iPilot series. iSafety enhances automotive intelligence and safety with cost-effective features and strong compatibility; iPilot meets the higher autonomous driving demands of OEMs, and the company is actively developing iRobo to achieve full autonomous driving in specific regions.
Smart Cockpit Solutions: Centered on DMS and OMS, self-developed algorithms ensure stability and accuracy, improving driving and passenger safety and comfort. Some products help OEMs obtain international certifications.
Vehicle-Road Collaboration: Deploying a vehicle-road collaboration network, integrating self-developed devices, algorithms, and V2X technology, collaborating with clients across multiple fields to improve traffic efficiency and safety, and participating in projects to build a collaborative ecosystem.
The use of proceeds from MINIEYE's global offering is as follows:
1. Enhance R&D Capabilities
Approximately 35% will be used to enhance the R&D capabilities of intelligent driving and smart cockpit solutions. By increasing investment in advanced algorithms, software, and hardware R&D, the company aims to accelerate product iteration and technological breakthroughs, improve product performance, functionality, and safety, enhance market competitiveness, and meet customer demands and industry trends. For example, in-depth R&D in key areas such as autonomous driving algorithm optimization and smart cockpit interaction experience improvement will drive product upgrades.
2. Optimize Production Facilities and Supply Chain Management
Approximately 25% will be used to optimize production facilities and supply chain management. Upgrading production equipment and technology, expanding production scale, improving production efficiency and product quality stability, ensuring timely delivery, reducing production costs, and enhancing profitability and market responsiveness. Examples include introducing advanced automated production lines, optimizing production process layouts, and establishing supplier collaboration mechanisms.
3. Promote Business Commercialization and Market Expansion
Approximately 20% will be used to promote the commercialization and market expansion of intelligent driving and smart cockpit solutions. Strengthening marketing, sales channel development, and customer relationship management to enhance brand awareness and market share. Engaging in commercial collaborations and demonstration projects to accelerate product commercialization and expand domestic and international markets, especially in regions with growing demand for intelligent driving, such as participating in major auto shows and joint promotions with OEMs.
4. Supplement Working Capital and General Corporate Purposes
Approximately 20% will be used to supplement working capital and general corporate purposes. Providing financial support for operations, meeting daily working capital needs, and ensuring stable and sustainable business development. Helping the company respond to market changes, seize development opportunities, optimize financial structure, and enhance financial stability and flexibility to strengthen risk resilience.
IPO Information and Lottery Rate:
The company is offering 39.19 million shares globally, with 200 shares per lot. As of the time of writing, the offering is oversubscribed by 1.66 times. Based on the current margin financing situation, there will be no clawback. However, after the release of funds from Caiji Group, it is highly likely to trigger a clawback due to CITIC's reputation. Assuming a 30% clawback, there will be 29,392.5 lots each for Group A and Group B. An estimated 5,000-7,000 people will participate, with a lottery rate of around 100%.
Pre-IPO Investors and Cornerstone Investors:
MINIEYE completed multiple rounds of financing before its IPO, with the last Pre-IPO+ round completed in December 2023, raising RMB 40 million at a post-money valuation of RMB 5.348 billion (approximately HKD 5.721 billion). The cost per share was RMB 14.86 (approximately HKD 15.89), representing a 14.33% discount to the offer price. Pre-IPO investors are subject to a 12-month lock-up period.
The company has introduced two cornerstone investors, subscribing for HKD 540 million. At the upper price limit, cornerstone investors account for 68.2%; at the mid-point, 74.1%; and at the lower limit, 81.1%. Cornerstone investors are subject to a 6-month lock-up period.
Sponsors:
The IPO is jointly sponsored by CITIC Securities and CICC, with CITIC also acting as the stabilizing agent. CITIC's projects are reliable—the last one, Mengjinyuan, was profitable. In 2024, CITIC sponsored 11 projects, all of which were profitable in the gray market, with only one dipping below the offer price on the first day. As a stabilizing agent, all three projects this year have been profitable.
Financial Overview:
Revenue:RMB 175 million in 2021, RMB 279 million in 2022,RMB 476 million in 2023, and RMB 549 million in the last 12 months as of June 30, 2024.
Gross Profit:RMB 17.001 million in 2021, RMB 33.57 million in 2022, RMB 68.022 million in 2023, and RMB 87.782 million in the last 12 months as of June 30, 2024.
Net Loss:RMB 139 million in 2021, RMB 220 million in 2022, RMB 207 million in 2023, and a net profit of RMB 187 million in the last 12 months as of June 30, 2024.
Comprehensive Review:
MINIEYE's main revenue source is intelligent driving solutions (including iSafety and iPilot solutions), contributing RMB 386 million in 2023, accounting for 81.1% of total revenue. Smart cockpit solutions contributed RMB 18.346 million (3.8%), and vehicle-road collaboration contributed RMB 71.454 million (15%).
There are four listed companies in Hong Kong offering intelligent driving solutions: Horizon Robotics, Black Sesame Technologies, RoboSense, and Zongmu Technology, along with Desay SV Automotive listed in A-shares. A comparison list is shown below:
As shown in the chart, autonomous driving solutions are currently in a phase of rapid growth, resulting in high PS ratios. Based on research, MINIEYE's business is closest to Horizon Robotics, making Horizon a more comparable benchmark. Horizon is currently the industry leader in terms of brand recognition and market share. Scaling Horizon's data by a factor of 5, MINIEYE's valuation would be around RMB 9.5 billion, which is not expensive. If compared to Zongmu Technology and RoboSense, based on gross margins and growth rates, a valuation of around RMB 6 billion would be reasonable. Overall, the IPO valuation is acceptable, but the company's cash flow is tight!
In terms of funding, this offering aims to raise HKD 666-792 million, with cornerstone investors locking in HKD 540 million, leaving a free float of HKD 126-252 million, which falls into small-cap speculation territory. Sentiment-wise, the IPO is sponsored by CITIC Securities, with CITIC CLSA as the stabilizing agent. CITIC's projects are known for quality, which adds significant sentiment value. Tomorrow's gray market performance of Caiji Group will further influence sentiment. If it surges, it will drive even more interest. Place orders after observing tomorrow's performance.
Subscription Plan:
Speculative subscription
$MINIEYE(02431.HK)
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