Rate Of Return
Buffett Apprentice[HK IPO] Xidi Smart Driving, the first commercial vehicle autonomous driving company listed in Hong Kong
Xidi Zhijia is a supplier of intelligent driving products and solutions for commercial vehicles in China. We focus on the R&D of autonomous trucks for mining and logistics in closed environments, V2X (vehicle-road coordination) technology, and intelligent perception solutions, providing proprietary technology-based products and solutions, with a primary focus on intelligent driving in closed environments during the track record period.
The company started its IPO on December 11, with an offer price of HKD 263, 10 shares per lot, a minimum subscription of HKD 256.52, a market cap of HKD 11.517 billion, and an issuance of 5.408 million shares. It belongs to the automotive industry and has a greenshoe option.
The sponsors are CICC, CITIC Securities, and Ping An of China. The first-day rise rate of projects sponsored by CICC in the past two years is 58.92%, CITIC Securities is 77.77%, and Ping An of China has only two projects but both showed a first-day rise. The overall performance of the sponsors is acceptable.
There are a total of 5 cornerstone investors, namely ICBC Credit Suisse, ICBC Credit Suisse International, Qianhai Kaiyuan Qunwei, Xiangjiang Zhizheng, and Zhijia No.1. The cornerstones collectively subscribed to approximately HKD 546 million, accounting for 38.39% of the total issuance, which is a decent proportion.
As of December 31, 2024, China's intelligent commercial vehicle market is relatively fragmented, with many participants still in the stage of exploring technological breakthroughs and data accumulation. Some leading companies are actively expanding various application scenarios to achieve large-scale commercialization. Notably, during the track record period, the company's revenue mainly came from product sales. In addition, Xidi Zhijia is one of the earliest companies to commercialize in China's intelligent commercial vehicle market.
The company's revenue from 2022 to 2024 was RMB 31.056 million, RMB 133 million, and RMB 410 million, respectively, with a year-on-year revenue growth of 209.22% in 2024. The net profits from 2022 to 2024 were -263 million, -255 million, and -581 million, respectively, with a year-on-year net profit growth of -127.71% in 2024.
The loss in 2024 was mainly due to increased expenses such as share-based payments, financial costs of financial instruments with priority measured at amortized cost, and listing expenses. Calculated on a non-IFRS basis, after adding back these listing expenses, the adjusted net profit in 2024 was RMB 127 million, with a year-on-year narrowing of losses by 7.78%.
At the offer price, the market cap of HKD 11.517 billion issues HKD 1.422 billion, with an issuance ratio of 12.35%. The cornerstones locked in 38.39%, so the floating shares are HKD 862 million.
This issuance adopts the clawback mechanism of 18C companies. The initial public offering in Hong Kong is 5%, with a clawback of 10% if the subscription multiple is 10 times or more but less than 50 times, and 20% if it is 50 times or more.
The current subscription multiple is 1.67 times, and the subscription is quite lukewarm. However, the best thing about this stock is that poor subscription sentiment creates opportunities.
Subscription Strategy:
Xidi Zhijia is a supplier of intelligent driving products and solutions for commercial vehicles in China. The sponsors are CICC, CITIC Securities, and Ping An of China, and their overall performance is acceptable. The 5 cornerstone investors collectively subscribed to HKD 546 million, accounting for 38.39% of the total issuance, which is a high proportion. The company's revenue in 2024 grew by 209.22% year-on-year, showing rapid growth, but it is still in a loss-making state. This issuance adopts the clawback mechanism of 18C companies, with floating shares of HKD 862 million, an initial offering of 5%, and a maximum clawback of 20%. The current subscription multiple is 1.67 times, and the subscription sentiment is quite lukewarm. If the subscription multiple is within 50 times, I plan to participate a little!
My remarks represent personal views only and do not constitute any investment advice. The stock market is risky, and investment requires caution!
Follow me: Small Investor Lao Yu
$CIDI(03881.HK)
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