With a valuation of over 16 billion, "the first domestic self-driving chip stock" is knocking on the door of the Hong Kong Stock Exchange

"The first domestic self-driving chip stock" is knocking on the door of the Hong Kong Stock Exchange.

In early July, Black Sesame Intelligence officially submitted a prospectus to the Hong Kong Stock Exchange, seeking to be listed on the Hong Kong stock market.

Since its establishment seven years ago, Black Sesame Intelligence has received support from a number of star capitals in the primary market and has received a total of ten rounds of financing. Investors include NIO Capital, Tencent, Xiaomi, SAIC, FAW, Geely and many other star institutions and car companies.

If Black Sesame Intelligence is successfully listed in Hong Kong, it means that "the first domestic self-driving chip stock" will be successfully born.

It is reported that Black Sesame Intelligence’s fundraising scale is approximately US$200 million to US$300 million. Among them, 80% of the funds raised will be used for research and development, 10% will be used to improve commercialization capabilities, and 10% will be used to supplement working capital.

As of the end of 2022, Black Sesame Smart Huashan A1000 series chips have achieved shipments of 25,000 pieces.

At the same time, Black Sesame Intelligence is expected to achieve its annual shipment target of 100,000 pieces this year, further increasing its market share to 9%.

"The gross profit margin of the industry is very high, and competition will be fierce in the future." In 2021, not long after Xiaomi announced its car-making, Lei Jun said this to Shan Jizhang, the founder of Black Sesame Intelligence, when conducting investment due diligence.

01. With a valuation of over 16 billion, Black Sesame Intelligence became the first company to apply for listing under the 18C rules.

Black Sesame Intelligence was established in July 2016. It is mainly engaged in the design, development and configuration of smart car SoC products, as well as the sales of different levels of autonomous driving solutions.

The prospectus shows that Black Sesame Intelligence has received a total of ten rounds of financing in the seven years since its establishment.

Among them, many domestic car companies have become shareholders of Black Sesame Intelligence.

In September 2016, three months after its establishment, Black Sesame Intelligence received Series A financing from Northern Light Venture Capital, with an implied valuation of US$10 million before the transaction and an implied valuation of US$18.1 million after the transaction.

In December 2021, Black Sesame Intelligence raised US$218 million in Series C+ financing, which was also its last financing before going public. After completing this round of financing, Black Sesame Intelligence’s valuation reached US$2.218 billion, approximately RMB 16.1 billion.

Since its establishment seven years ago, Black Sesame Intelligence has conducted a total of ten rounds of financing, with a cumulative financing of US$695 million (approximately RMB 5 billion). It has received support from a number of star capitals and has a promising market prospect.

Specifically, investors in Black Sesame Intelligence include:

Northern Light Venture Capital holds a total of 11.48% of the shares;

Ocean Pine Capital holds approximately 5.97% of the shares;

Wu Yuefeng Capital holds 7.67% of the shares;

Xiaomi holds 4.05% of the shares;

Tencent holds 3.87%;

NIO Capital holds 2.78% of the shares;

BOC Investment holds 2.97%;

SDIC China Merchants Venture Capital holds 2.55% of the shares;

Geely Group holds 0.86% of the shares,

SAIC holds 0.52% of the shares.

Despite multiple rounds of funding, Black Sesame is still unable to achieve profitability due to industry characteristics, and its revenue in the past year has not reached HK$500 million, and its commercialization level has not met the original listing standards of the Hong Kong Stock Exchange’s main board.

In March this year, the Hong Kong Stock Exchange revised the "Listing Rules" and added a new 18C document, releasing policy goodwill to specialized technology companies.

Black Sesame has also become the first specialized technology company to apply for listing based on 18C documents.

According to the requirements of Document 18C, the company needs to obtain a certain amount of investment from leading independent investors.

The so-called senior independent investors of Vanguard mean that the investment holdings are not less than 12 months, and the total shares held by senior independent investors of Vanguard are not less than 10% of the issued share capital, or the amount invested is not less than HK$1.5 billion.

Black Sesame lists Northern Light Venture Capital and Ocean Pine Capital as its leading senior independent investors.

Northern Light Ventures and Ocean Pine Capital hold 11.48% and 5.97% respectively.

02. After one year of mass production, annual shipments are 25,000 pieces, becoming the world’s third largest supplier of autonomous driving chips.

A Frost & Sullivan report shows that China's ADAS car sales are currently in a period of rapid growth. It is expected that the market size of ADAS SoC will reach 35.9 billion yuan by 2028, with a compound annual growth rate of 24.5% from 2022 to 2028.

Black Sesame has become the world's third largest supplier in terms of shipments of automotive-grade high-computing SoCs in 2022.

In terms of performance, from 2020 to 2022, Black Sesame is:

Achieved revenue of 53.02 million yuan, 60.5 million yuan and 165 million yuan;

Operating losses were 293 million yuan, 723 million yuan and 1.053 billion yuan.

The main reason for the loss is that the chip industry is characterized by high R&D investment and R&D cycle. The research and development expenses of black sesame seeds remain at a high level.

During the reporting period, the research and development expenses of black sesame were 254 million yuan, 595 million yuan and 764 million yuan respectively. The revenue proportions reached 480.2%, 984% and 461% respectively.

From a specific business perspective, Black Sesame Intelligence mainly includes two major business contents:

Autonomous driving products and solutions

Intelligent imaging solutions

The prospectus information shows that the intelligent imaging solution business took the lead in commercialization as early as August 2018 and began to generate revenue.

From 2020 to 2022, the annual revenue of the intelligent imaging solution business will remain at around 20 million yuan, with average revenue scale and growth performance.

Judging from the information in the prospectus, among the two major businesses, the intelligent imaging solution business assumes more of the function of early commercialization.

The autonomous driving products and solutions business is the main source of revenue for Black Sesame, and it also carries the valuation and prospects of Black Sesame Intelligence.

The autonomous driving products and solutions business mainly includes SoC products and solutions.

In terms of SoC products, in June 2020, Black Sesame Intelligence launched the automotive-grade SoC Huashan A1000/A1000L.

1. Huashan Series

Huashan A1000/Huashan A1000L chips are both 14nm processes.

The Huashan A1000 chip provides 58TOPS computing power at INT8 precision. It is the first high-computing power autonomous driving SoC developed and launched in China with its own IP core.

The Huashan A1000L is specially designed for L2 and L2+ autonomous driving, with a computing power of 16TOPS.

Huashan A1000 chip internal structure

Thanks to the mass production and delivery of the above products, the autonomous driving products and solutions business achieved revenue of 142 million yuan in 2022, driving Black Sesame's annual revenue to increase by 173.43% year-on-year to 165 million yuan.

As of the end of 2022, the total shipment volume of the above two chips exceeded 25,000 pieces.

In addition to the above two SoCs, in April 2021, Black Sesame Intelligence also launched Huashan A1000 Pro.

Huashan A1000 Pro has a computing power of 106 TOPS and is expected to be mass-produced and installed this year.

According to Frost & Sullivan, this chip is the first self-driving SoC developed and launched in China with a computing power of over 100TOPS.

For L3 and above, Black Sesame is developing the Huashan A2000 series with a target computing power of 250+TOPS, which is expected to be launched in 2024 and mass produced in 2026.

2. Wu-Tang Series

In April this year, Black Sesame Intelligence also launched Wudang C1200, a cross-domain computing SoC that integrates autonomous driving, smart cockpit, body control and other computing functions.

Wudang C1200 uses an advanced 7nm process, which has smaller chip area and power consumption than previous generations, but has better performance and density.

Wudang C1200 chip is expected to provide samples this year and mass production in 2025.

3. Autonomous driving solutions

In addition to SoC products, in order to fully utilize the potential of automotive-grade SoC, Black Sesame has also developed hardware platforms and autonomous driving solutions, including:

Autonomous driving solutions covering ADAS to L3 and above - BEST Drive

Commercial vehicle active safety system-Patronus

V2X edge computing solution-BEST Road

Development and testing platform-FAD

Huashan SOM

Among them, the intelligent driving solution BEST Drive provides a closed-loop integrated solution package from sensor information collection and analysis to decision execution.

It includes Drive Eye, which supports visual perception and display, Drive Sensing, which supports integrated solutions, and Drive Brain, which supports L3-level domain control.

Black Sesame Drive Sensing Solution

Based on 1 A1000L+5V5R, it can realize 360° surround view, automatic parking assist, remote control parking, memory parking, adaptive cruise, automatic emergency braking, and lane centering assist functions.

Based on 1 A1000+10V5R, it can realize 360° surround view, automatic parking assist, remote control parking, memory parking, valet parking, adaptive cruise, automatic emergency braking, lane centering assist, highway assist, high-speed automatic Assisted navigation driving, automatic assisted navigation driving in urban areas, and high-speed navigation.