New Stock Preview | Magic Vision Intelligence standing on the wind of smart driving: Market share is only 0.3%, listing may be for blood transfusion

Artificial intelligence is driving the rapid development of the intelligent driving industry. However, participants are sacrificing profits in exchange for a higher market share in order to enjoy the benefits of industry growth. Recently, a provider of intelligent driving solutions, Mobius Vision Intelligence, which has not had a leading reputation, has accumulated over 700 million RMB in losses since 2022 and is bleeding money in its upcoming listing on the Hong Kong Stock Exchange. It is reported that on October 5th, Mobius Vision Intelligence updated its listing application to the Hong Kong Stock Exchange main board. The company had submitted its application on September 28th, with GUOTAI JUNAN International and Guosen (Hong Kong) as its joint sponsors. According to industry consulting, based on revenue projections for 2024, the company ranks eighth among domestic third-party intelligent driving solution providers in the Chinese market. From 2022 to 2024, the company's revenue compound annual growth rate is 73.9%, with a continued high growth rate of 76.3% in the first half of 2025. However, during this period, the company has incurred net losses of 2 billion RMB, 2.28 billion RMB, 2.33 billion RMB, and 1.12 billion RMB respectively, accumulating total losses of 7.73 billion RMB, with a cumulative loss ratio as high as 95.5%. As of August 2025, the company only has cash and cash equivalents of 144 million RMB, which could be depleted within a year at the current burn rate, indicating a critical need for capital. The upcoming Hong Kong listing may provide the much-needed funding for the company, but it is worth noting that Mobius Vision Intelligence has gone through multiple rounds of financing, with the latest being a Series D round in June 2025, valuing the company at 25.43 billion RMB. This listing also implies that some financial investors may have exit requirements. Is this company worth watching? Despite its high growth in business, the company has been experiencing annual losses. Mobius Vision Intelligence is one of the few third-party providers of intelligent driving solutions in China that have their own AI algorithm design capabilities. Founded in 2015, the company developed its first-generation visual perception algorithm in 2017, evolving to the fifth generation by 2025, and introducing the fifth-generation end-to-end + multimodal large language model algorithm. The company's comprehensive intelligent driving solutions support L0 to L4 level intelligent driving functions. The company has three major businesses: Magic Drive solution, Magic Parking solution, and Magic Safety solution, with revenue shares in the first half of 2025 of 61.8%, 27.3%, and 10.9% respectively. The revenue structure is changing significantly, with Magic Safety experiencing large fluctuations in revenue and a decreasing share, while Magic Parking is the opposite, essentially compensating for the declining share. Magic Drive is a self-developed driving solution consisting of high-performance intelligent front-end integrated machines and domain controllers, covering mainstream L2 driving functions and expanding to advanced L2+ functions like NOA and HPA. The Magic Parking solution is an advanced extension of parking assist applications. Both of these businesses mainly target the passenger car sector. In contrast, Magic Safety is an advanced full-stack AI blind spot active safety defense system targeting the commercial vehicle sector, aiming to enhance driving safety and operational efficiency. The core of Mobius Vision Intelligence's three major business products is its independently developed AI algorithms. Since its establishment in 2015, the company has been dedicated to independent algorithm development, evolving its AI algorithm roadmap to the fifth generation. All three businesses have industry-leading levels of intelligent driving technology. During the reporting period, the company's solutions were selected by OEM customers for 92 vehicle models, delivering over 3.3 million sets. However, fierce industry competition, including competition from independent third parties and self-developed solutions by automotive companies, has led to slow customer growth for the company. In 2024, the company had 143 customers, an increase of only one from the previous year. In the first half of this year, it had 97 customers, with 20 new clients. Furthermore, the company has a relatively high customer concentration, with the top five customers contributing 65.9% of revenue in the first half of 2025, with the largest customer contributing 21.9%. Due to industry competition, the company's profitability is not stable. The gross profit margin declined from 25.6% in 2022 to 14.2% in 2024, and improved to 20.1% in the first half of 2025, a 10.1 percentage point increase year-on-year. The company has significant research and development expenses, but the results have led to a noticeable decrease in expense ratio, which was 44.5% in the first half of this year, a significant improvement from 108.4% in 2022. Additionally, the administrative expense ratio and sales expense ratio also improved to 15.6% and 5.1% respectively. However, the combined three expense ratios remain high at 65.2%, making it challenging for the company to turn a profit. In terms of the industry, intelligent driving has become a battleground for various automotive products, and the penetration rate of intelligent driving is accelerating. According to industry reports, the global intelligent driving solution market size (L0 to L2+ levels) will reach 320 billion RMB by 2024, with a five-year compound annual growth rate of 27.6%. China is the main market, with a market size of 912 billion RMB, a compound annual growth rate of 43.3%, accounting for 28.5% of the global market. By 2029, the market is expected to reach 2.281 trillion RMB, accounting for 34.15% of the global market. At the L2 and L2+ levels, are expected to be the mainstream products in China's intelligent driving sector. The five-year compound annual growth rates for these two levels in 2024 are projected to be 44.2% and 219.4%, with market sizes of 452 billion RMB and 357 billion RMB, respectively. By 2029, these are expected to reach 657 billion RMB and 1.523 trillion RMB respectively. L2+ products are gradually becoming the core of intelligent driving solutions, and with the development of AI, multiple cutting-edge technologies, including multimodal LLM-enabled intelligent driving, will be applied. In the fiercely competitive industry, both self-developed solutions by automotive companies and third-party solutions are competing for market share. For example, Xpeng Motors focuses on intelligent driving as a selling point. Despite the competition, Mobius Vision Intelligence only holds a 0.4% market share based on 2024 revenue, ranking eighth, with the largest participant holding an 8% market share. However, the company is one of the few domestic suppliers based on AI native genes and technology accumulation with full-stack self-research capabilities. With its comprehensive self-developed core technology in the field of intelligent driving solutions, Mobius Vision Intelligence has attracted many investment institutions. With over 10 rounds of financing from early stages to series D, the valuation has soared from 4.34 billion RMB in the A round in 2017 to 25.43 billion RMB in the D round in 2025, an increase of 4.86 times. Starting from the B+ round in 2021, the valuation premium has consistently exceeded 100%. Investors prior to the D round have benefited from substantial valuation premiums, but Mobius Vision Intelligence has announced lock-up periods. Among the seasoned independent investors, including Jinpu Investors, Nantong Jisheng, Land Investment, and Xuzhou Real Estate, have lock-up periods of six months, holding a combined 8.74% stake. Nantong Jisheng entered in the A+2 round with a 1.15% stake, worth 29 million RMB based on the current valuation, a profit of over three times, while Xuzhou Real Estate joined later in the C+ round with a valuation premium of only 16.7%. In summary, Mobius Vision Intelligence is positioned in the fast-growing industry of intelligent driving solutions, and high growth in the industry will allow the company to fully benefit from the development of the industry. With its core technology areas of comprehensive self-research, the company will attract more investment institutions and raise its valuation. However, as the entire industry is sacrificing profits to pursue growth, the company's continuous losses have put a strain on its cash flow, necessitating a listing to raise capital. As a high-growth field, sacrificing profits in the early stages is inevitable, but targets with technological advantages are likely to continue leading the industry in brutal growth. The company presents investment opportunities as well as risks, and attention should be paid to the balance between the company's growth, profitability strategies, cash flow changes, and the exit demands of existing investors after the listing.