An in-depth review of the development paths of Horizon Robotics and Black Sesame’s intelligent driving chips

The road to smart driving chips is not easy. Let’s review the two companies, Horizon and Black Sesame, together at the weekend .

● Horizon Robotics has completed 15 rounds of financing, raising a total of US$2.362 billion. After the D round of financing, its post-investment valuation reached US$8.71 billion.

● Heizhima Intelligence has received 10 rounds of financing, with a total financing amount of approximately US$695 million. We will continue to observe what stage these two companies can reach in the Hong Kong stock market. Hong Kong stocks have a special technology company listing mechanism, which allows technology companies with no income and no profit to list in Hong Kong. It is suitable for companies in the five special technology industries of new generation information technology, advanced hardware , advanced materials, new energy and energy conservation and environmental protection, new food and agricultural technology.

Part 1

Operating conditions of the two companies From 2021 to 2023: ● Horizon's revenue increased from 467 million yuan to 1.552 billion yuan (an average increase of 80.51%), and gross profit increased from 331 million yuan (an average increase of 85.64%) to 1.094 billion yuan, while the gross profit margin has remained stable at around 70%. ● In contrast, Black Sesame's operating income was 61 million yuan, 165 million yuan, and 312 million yuan, which has expanded fivefold in the past three years. ● Horizon also experienced losses in the same period, which were 2.064 billion yuan, 8.720 billion yuan, and 6.739 billion yuan, respectively, and the adjusted net losses were 1.103 billion yuan, 1.891 billion yuan, and 1.635 billion yuan; ● Black Sesame's net losses were 2.357 billion yuan, 2.754 billion yuan, and 4.855 billion yuan, respectively.

The reasons for the losses of the two companies are similar. The initial investment, initial scale limitations and the company's R&D investment have increased year by year. ● Horizon's R&D expenses were 1.143 billion yuan, 1.879 billion yuan and 2.366 billion yuan respectively, ● Black Sesame's R&D expenses were 595 million yuan, 764 million yuan and 1.363 billion yuan. As of the end of 2023, ● Horizon held a total of 11.359 billion yuan in cash and cash equivalents, but the net cash from operating activities was negative 1.744 billion yuan. ● Black Sesame's cash and cash equivalents balance was 1.298 billion yuan.

Part 2

The smart driving chip market is in the midst of fierce competition, with major companies scrambling to break through and gain a leading edge. From existing data and analysis, it can be seen that the competition landscape of the smart driving chip market presents the following characteristics:

● NVIDIA 's leading position: NVIDIA is currently the leading supplier of intelligent driving and occupies an important position in the field of intelligent driving. With the launch of Thor, BYD, Xiaopeng, Ideal and Zeekr have all chosen the latest platform.

● Outstanding performance of Tesla's FSD chip: Tesla's FSD chip occupies the largest market share in China. Due to Tesla's vertical integration considerations, its performance and installed capacity are higher than other competitors, which provides strong support for Tesla's leading position in intelligent driving technology.

● Mobileye gets support: Although Mobileye's market share is not as good as Nvidia and Tesla, its products are still competitive. Recently, Mobileye has received support from Volkswagen Group. At present, Horizon Robotics and Black Sesame are both replacing mainstream chip solutions from other overall chip solutions. Of course, China's solutions actually include Huawei, Core Engine and Aixin Yuanzhi. We will analyze them in the Zhixin channel later.

The development of the smart driving chip market is affected by the slowdown in the growth of the new energy vehicle market. As the market becomes saturated, price wars become more intense, which poses a challenge to the profitability of smart driving chip companies. The risk of chip overcapacity is gradually emerging worldwide, which has brought supply chain pressure and profitability challenges to smart driving chip companies. Price wars are actually inevitable.

summary

The global smart driving chip market is highly competitive, and major companies are working hard to improve technology, expand market share, and respond to various challenges inside and outside the industry. In such a competitive environment, only by continuous innovation and improvement can Huawei and Horizon Robotics be relatively stable in China. The other three companies, Black Sesame, Core Engine, and Aixin Yuanzhi, face greater challenges. We will analyze them again when we have the chance.