Unicorn BLACK SESAME Intelligence initiates IPO, aiming to lead the golden track of autonomous driving

Recently, Baidu's autonomous driving service platform "Luobo Kuai Pao" has been trending, sparking people's various imaginations about the future of autonomous driving.

In the second half of the development of new energy vehicles, the focus is on "intelligence". In the wave of automotive intelligence, the importance of the System-on-Chip (SoC) for autonomous driving vehicles, known as the "central brain", is self-evident.

Black Sesame Intelligence, a pioneer in the domestic intelligent driving chip industry, has proven its own value with leading technological strength in the era of intelligence. After a hearing at the Hong Kong Stock Exchange last month, Black Sesame Intelligence started its IPO on July 31st and will become the first listed company in the domestic "autonomous driving chip" sector. The company's stock code is "2533.HK", with a planned public offering of 37 million shares, a maximum offering price of HKD 30.30, and the offering period from July 31st to noon on August 5th. It is expected to be listed on the main board of the Hong Kong Stock Exchange on August 8th.

Pioneering Intelligent Driving Engraved in Technology Genes

Black Sesame Intelligence is one of the earliest domestic companies to research and develop autonomous driving SoCs. With a deep focus on the autonomous driving track, Black Sesame Intelligence has developed into a leading supplier of automotive-grade intelligent car computing chips and chip-based solutions in China and even globally, leading the wave of domestic substitution for automotive-grade chips.

In just 6 years, Black Sesame Intelligence has successfully entered the top three in the industry. Based on the shipment volume of automotive-grade high-performance SoCs in 2023, Black Sesame Intelligence is the world's third-largest supplier.

Through self-developed IP cores, algorithms, software-driven SoCs, and solutions based on SoCs, Black Sesame Intelligence's ultra-high-performance automotive-grade products (including the Huashan series and Wudang series) and technology equip intelligent vehicles with key capabilities for tasks such as autonomous driving, intelligent cockpits, advanced imaging, interconnection, etc., covering L2-L4 level autonomous driving and cross-domain computing solutions, meeting a wide range of customer needs for intelligent products.

Black Sesame Intelligence has created a complete ecosystem for autonomous driving applications: automotive-grade image processing ISPs enable cars to see clearly, integrated data channels enable cars to see far, and deep neural network accelerators enable cars to understand. These ecosystem chains can comprehensively empower intelligent vehicles.

Black Sesame Intelligence has become a leader in domestic "chip" manufacturing, relying on its strong R&D team.

Black Sesame Intelligence is the only domestic company that has assembled a team with over 20 years of experience in the automotive field and over 20 years of experience in the chip field. The core team members come from top companies in the industry such as Bosch, Howen Technologies, Qualcomm, Huawei, ZTE, etc. In addition, Black Sesame Intelligence continues to increase its R&D investment, seizing the high ground in the intelligent driving technology field, with R&D investments from 2021 to 2023 reaching RMB 595 million, RMB 764 million, and RMB 1.363 billion, respectively.

An experienced and knowledgeable R&D team, as well as a focus on research and development, constitute the unique advantage of BLACK SESAME in intelligence, that is: knowing chips better than the automotive industry, and understanding cars better than the chip industry.

With the continuous improvement of autonomous driving levels, the computing power of SoCs also needs to be continuously enhanced. Based on strong R&D capabilities, BLACK SESAME's products iterate rapidly, and the "value" of automotive-grade high-performance SoCs continues to increase.

Following the release of the industry's first cross-domain SoC integrating autonomous driving, intelligent cockpit, vehicle control, and other computing domains in April last year, the company is developing the Huashan A2000 with a computing power of 250+ TOPS for L3 and above. This is one of the highest-performance automotive-grade SoCs in the world, expected to be launched in the market this year, enriching the company's product matrix.

With the continuous landing and mass production delivery of SoC products with higher computing power and performance, BLACK SESAME is expected to seize the opportunity of intelligent driving and lead the industry into a new era.

In the field of autonomous driving chips, BLACK SESAME's "specialization" and "precision" have won the favor of many well-known institutions. Since its establishment, the company has received over 10 rounds of financing, with a total financing amount of approximately USD 700 million. The lineup of investors shines brightly, including Xiaomi, Geely, SAIC Group, Tencent, and other star companies, as well as leading capital such as DaJi Fund II, Wuyuefeng Innovation, and others.

Accelerating Commercialization, Surging Revenue

The automatic driving track is long and challenging. According to Frost & Sullivan data, the global and Chinese penetration rates of autonomous driving passenger cars are expected to increase from 69.8% and 74.7% in 2023 to 87.9% and 93.5% in 2028.

At the same time, the global and Chinese market size of automotive-grade SoCs will also increase from RMB 57.9 billion and RMB 26.7 billion in 2023 to RMB 205.3 billion and RMB 102.0 billion in 2028, with compound annual growth rates of 28.8% and 30.7% respectively.

BLACK SESAME has the strength to seize this rapidly growing market opportunity. From 2020 to 2023, the number of BLACK SESAME's customers has rapidly increased from 33 to 85. Currently, the company has cooperated with more than 49 automotive OEMs and Tier 1 suppliers, including FAW Group, Dongfeng Group, JAC Group, Hella, Yikatong Technology, Baidu, Bosch, ZF, and Marelli, among other well-known enterprises.

As the customer base continues to expand, BLACK SESAME's product order volume and revenue scale continue to reach new heights.

As of the end of March this year, BLACK SESAME's SoC product shipments have exceeded a total of over 156,000 units; the number of transactions for autonomous driving products and solutions business has increased from 35 transactions in 2021 to 298 transactions in 2023 The impressive operating data has also driven the company's revenue to climb steadily. From 2021 to 2023, the total revenue of the company surged from RMB 60.5 million to RMB 312 million, with a staggering compound annual growth rate of 127%; the company's gross profit also increased from RMB 21.87 million to RMB 77.14 million.

Furthermore, the company's gross profit margin saw a significant increase in the first quarter of this year, rising from 18.7% in the same period last year to 60.9%, mainly due to the integration of the company's autonomous driving algorithms into SoC-based solutions, as well as an increase in the gross profit margin of intelligent imaging solutions.

With the absolute growth of the domestic automotive-grade chip market and the pressure from laws such as the "Chip and Science Act" in the United States, high-end substitution has become a trend in the industry, which is expected to help domestic chip manufacturers seize market share.

Indeed, BLACK SESAME is benefiting from this wave of domestic substitution, with its market share rapidly increasing. In the ranking of domestic high-computing power autonomous driving SoC shipments (by chip), the company's market share increased from 5.2% in 2022 to 7.2% in 2023, a one-year rise of 2 percentage points.

BLACK SESAME has currently received intention orders from 16 automotive OEMs and Tier 1 suppliers to mass-produce SoC products for 23 models. In the coming years, the company's higher-level A2000, next-generation SoC, and other products are expected to bring more diversified customer base and intention orders, thereby driving the enhancement of the company's economies of scale and continuously strengthening its self-sustaining capability.

Summary:

This year marks the first year of the localization of autonomous driving chips in the era of intelligent automotive. The industry's growth potential and certainty of explosion are strong, and BLACK SESAME, which has a first-mover advantage in the industry, is well-prepared.

By focusing on innovation and breakthroughs in the field of autonomous driving AI chips, BLACK SESAME has achieved comprehensive layout in terms of technology, products, solutions, and business models for the landing of high-performance chips. As a leading enterprise in industry technology and product strength, BLACK SESAME's commercial development is progressing rapidly, leading the local automotive-grade chip industry towards deeper development.

The moment of the autonomous driving singularity is approaching. As a rare target of autonomous driving chips in the Hong Kong capital market, bearing the label of "high technology," BLACK SESAME is expected to accelerate its development and gain a larger market share after receiving capital support