Many car companies have invested in Fruitech's IPO, accelerating the penetration of the smart driving market with a combination of full-stack self-developed software and hardware.

2024 is about to end, but the heat of the smart driving industry race track continues with news of related companies' IPO. On December 20th, Tudatong initiated a charge, according to the announcement submitted by the special purpose company TECHSTARACQ-Z, the two parties will officially list on the Hong Kong Stock Exchange through a merger. This year, several autonomous driving companies have sought listing, including Momenta, Pony.ai, WeRide, Horizon Robotics, BLACK SESAME, some of which have successfully been listed. In addition, Furuiteke, a smart driving unicorn that went public in Hong Kong at the end of November, has further intensified the enthusiasm for listing on the smart driving track this year. In addition to being the "darling" of capital, having received many rounds of financing, Furuiteke has also performed outstandingly in areas such as business model, commercial capabilities, customer coverage, and investor lineup. According to the prospectus, Furuiteke has established business cooperation with 46 OEMs, covering all domestic OEMs with top 10 car sales in 2023, with a total of over 280 designated projects and over 200 mass production projects. Furthermore, Furuiteke's investor base is quite luxurious, with shareholders including government industrial funds, well-known professional investment institutions, as well as various industry strategic partners such as SAIC, BAIC, Dongfeng, Geely, and Shaanqi. Smart driving industry professionals told reporters that Furuiteke is preferred by OEMs because of its different layout and capabilities compared to traditional Tier 1 suppliers. Full-stack self-development combined with software and hardware capabilities According to information from Zhishi Consulting, in terms of business model, Furuiteke differs from traditional Tier 1 suppliers focusing on hardware production and software suppliers focusing solely on intelligent driving algorithms. Furuiteke optimizes system performance through the integration of hardware and software, and achieves continuous upgrading and efficient iteration of intelligent driving solutions through a data closed-loop platform. This full-stack self-developed software and hardware integration form allows Furuiteke to build the ODIN Smart Base platform from four modules: controllers, sensors, software algorithms, and data closed-loop platforms, which can provide users with customizable, efficient, iterative, and cost-effective intelligent driving solutions. According to the prospectus, based on this business architecture, Furuiteke can provide OEM customers with comprehensive software and hardware integrated intelligent driving solutions. Furuiteke has developed three intelligent driving solutions: FT Pro, FT Max, FT Ultra, covering intelligent driving capabilities from L0 to L3 levels of vehicle. The current new car development cycle for domestic car brands is continuously shortening, with some brands approaching a development cycle of 12 months. Platformized technology creation by suppliers has multiple obvious benefits for OEMs, such as better compatibility, modularized rapid configuration, meeting the needs of different vehicle models, and improving on-board efficiency. The prospectus shows that Furuiteke's intelligent driving solution delivery cycle can be as short as 8 months, significantly shorter than the industry average. This can help clients shorten the development cycle of new vehicle models, respond more quickly to rapid market changes. In addition, Furuiteke's integrated research and development capabilities have greatly increased resource utilization efficiency and reduced dependence on computing power. For example, Furuiteke can achieve high-speed NOA and APA functions with 13 TOPS of computing power, demonstrating its competitive advantage in algorithm optimization and cost-effectiveness. Moreover, through iterative upgrading at the system level to optimize hardware and software performance, as well as the reuse of the technology platform, it can more economically realize the continuous upgrading of automobile intelligence functions for OEMs, thereby enhancing user experience, accelerating the popularization and penetration of intelligent driving functions. Capability for mass production scale delivery The industry generally believes that the scale production of autonomous driving enterprises represents important values in various dimensions such as technology maturity, market competitiveness, capital attraction, data accumulation, consumer awareness, and policy support. Mass production not only represents the technical strength of an enterprise but also is a key factor for its commercial success. Furuiteke has chosen the L2 progressive route, focusing on the mass market of production vehicles, and by providing automotive manufacturers with a full-stack intelligent driving solution, can achieve a more comprehensive commercialization more early on. Industry insiders say that the ability to mass produce and commercialize on a large scale is an important benchmark for assessing Tier 1 strength, which means that Furuiteke has a competitive advantage in delivery capabilities, quality control, establishing trust relationships with OEMs. According to media reports, in 2020, Furuiteke's Tongxiang Wuzhen intelligent manufacturing factory went into operation. In 2022, Furuiteke completed the expansion of a new intelligent manufacturing base covering 39 acres, and built new fully automatic millimeter wave radar production lines, camera production lines, camera module production lines, domain controller automatic assembly lines, among others. In 2023, Furuiteke completed the offline production of the 1 millionth intelligent driving product. In 2024, as Furuiteke celebrates its 8th anniversary, it announced that its 3 millionth ADAS system product has officially gone offline, reaching a new milestone in business scale and commercial profitability. Industry data shows that the market size of revenue-based global mass-produced L0 to L2+/L2++ level intelligent driving solutions has increased from 108.3 billion yuan in 2019 to 277.1 billion yuan in 2023, and is expected to reach 650.3 billion yuan by 2028. China, as the world's largest market for intelligent driving solutions, is expected to reach 210.3 billion yuan by 2028. The continuous increase in market demand requires stronger, more stable, and more mature delivery capabilities. According to the prospectus, Furuiteke plans to strengthen intelligent manufacturing, improve the capability for scaled production and commercial profitability. The proceeds from Furuiteke's Hong Kong IPO will be used to strengthen the research and development of the company's intelligent driving solutions and products, expand and upgrade capital expenditures related to production manufacturing, expand sales and service networks, among others. With its research system, product portfolio, and intelligent manufacturing, Furuiteke is actively promoting a positive cycle of business research and development, production, and commercial activities. The ability to integrate the local supply chain system In the second half of the competition with "intelligence" as the main theme, Chinese intelligent driving companies are aggressively breaking through, and independent automobile brands are also beginning to localize and upgrade their core suppliers. Gao Gong...According to the data from the Intelligent Automobile Research Institute, in 2022, the delivery of vehicles equipped with L2 level assisted driving (including L2+) as standard reached 5.8599 million units, a year-on-year increase of 61.66%; among them, the market share of domestic ADAS suppliers (including self-developed by car manufacturers) has reached 9.86%. In 2023, in terms of market share of suppliers in the entire ADAS market (excluding panoramic view and parking assistance), the market share of Chinese domestic suppliers (including self-developed by car manufacturers) has reached 19.60%, doubling compared to the previous year.In the prospectus, Foritech stated that with the expansion of sales volume, it is expected that through bulk purchasing and more efficient production processes, costs will be significantly reduced, and more favorable terms will be negotiated for raw materials and components, further reducing costs, improving economies of scale, providing customers with comprehensive, flexible, and cost-effective solutions, better grasping the market opportunities of intelligent driving solutions in terms of domestic substitution and increasing market penetration rates. At the same time, Level 2 intelligent driving solutions have become the mainstream in the market, and the penetration rate is expected to continue to increase, further driving the large-scale deployment of ADAS by Chinese independent OEMs. Data from Zhishi Consulting shows that as of the installation volume of Level 2 and Level 2+/Level 2++ intelligent driving solutions in China in 2023, Foritech ranks third among independent suppliers, with a market share of 14.6%. Based on the installation volume of Level 2+/Level 2++ intelligent driving solutions in China in 2023, Foritech is the third largest supplier of intelligent driving solutions among independent suppliers, with a market share of 11.5%. Foritech's highest-level FT Ultra solution has achieved Level 2+/Level 2++ and Level 3 automation, achieving rapid mass production in 2023, helping the company enter a new growth phase. With major OEMs increasing their promotion of intelligent driving experiences, user acceptance of intelligent driving is constantly increasing. At the same time, the enhancement of technological capabilities and the acceleration of economies of scale have accelerated the penetration of intelligent driving functions, and the market demand for intelligent driving solutions may experience further growth. Faced with the trends of domestic substitution and increased penetration of intelligent driving solutions, Foritech's deep integration capabilities in the supply chain undoubtedly enhance its competitive advantage and even provide strong support for the company's international expansion.