New Stock Outlook | From judicial restructuring to "AI+Mobility" rebirth, can Chongqing Afari Technology's Hong Kong IPO leverage AI ambitions?

In the era where the wave of artificial intelligence intertwines deeply with the revolution of new energy vehicles, Chongqing Afari Technology, a A-share listed company born from traditional manufacturing industry, and introducing AI genes and industrial ecosystem resources, is moving towards the international capital market with a new look. Recently, Chongqing Afari Technology submitted an application for a main board listing to the Hong Kong Stock Exchange, aiming to deepen its global strategy layout and accelerate overseas business development. This listing in Hong Kong is seen as a key step in "replenishing ammunition" for its AI ambition. The funds raised are planned to be used to implement AI strategy, enhance research and development capabilities, strategically integrate upstream and downstream industry chain resources, strengthen domestic and international sales and service network construction, and supplement operating funds. Facing intense competition and massive R&D investment in the industry, can Chongqing Afari Technology successfully leverage its H-share listing to translate AI technology into substantial business income and successfully break through in the "AI + car" race? "AI + car" dual-wheel drive: Chongqing Afari Technology's breakthrough and establishment It is understood that Chongqing Afari Technology's transformation story began in 2020, when the company initiated judicial restructuring due to operational difficulties, with the support of Manjinghong Fund and Chongqing Liangjiang Industrial Investment, successfully completed the reorganization, thus completing the strategic transformation from Lifan Technology to Chongqing Afari Technology. Since 2024, Anqi Investment has invested and served as the chairman, the company has clearly defined its core strategic direction as "AI + Mobility", committed to becoming a leader in disruptive innovation technology, and providing closed-loop solutions of "AI + Mobility" for global strategic customers. This strategic transformation has adjusted the company's business layout to be driven by "end business" and "technology business". According to the latest financial data, for the six months ended June 30, 2025, the company achieved revenue of RMB 4.149 billion, an increase of 40.4% year-on-year. Overseas business is another highlight, with overseas business revenue reaching RMB 2.839 billion by 2024, accounting for over 40% of the company's overall revenue. Now, since its transformation, Chongqing Afari Technology has developed unique leading AI native capabilities in the technology field, forming its competitive moat. In the field of intelligent driving, the company has developed a unique RLM (Reinforcement Learning - Multimodal) model. According to Zhoushi Consulting's data, Chongqing Afari Technology is the first company to achieve large-scale deployment of end-to-end RLM model in the intelligent driving scenario. Currently, the company has released the "Qianli Zhi Jia 1.0" solution, providing L2-level intelligent driving capability, and plans to release the L3-level intelligent driving solution "Qianli Zhi Jia 2.0" in 2025, and introduce the L4-level intelligent driving solution "Qianli Zhi Jia 3.0" in the latter half of 2026, targeting the Robotaxi scenario. In the intelligent cockpit area, Chongqing Afari Technology has developed the industry's first AGI L3 intelligent body-level intelligent cockpit system based on proprietary multimodal interaction models and AI-native Agent OS. This Agent OS (Intelligent Body Operating System) is designed specifically for intelligent bodies, supporting intelligent body development and deployment on the vehicle end, and compared to mainstream industry solutions that extend cloud-based AI capabilities on systems like Android, it has higher integration and intelligence levels. In addition, as a driving force for future growth, the company is accelerating the full-chain industrial layout of Robotaxi, aiming to deploy in the next 18 months. The company plans to cooperate with Geely to develop Robotaxi-specific vehicle models, and to achieve scaled operation services in more than 10 cities globally, with more than 1,000 Robotaxi deployed in a single city. Chongqing Afari Technology's strategic advantage also benefits from its solid industrial alliances. On the one hand, maintaining a long-term stable strategic cooperation relationship with Geely Group, with Geely Group being the company's largest supplier and customer during the historical period, this deep cooperation not only ensures a stable supply chain, but also allows the company to obtain a large amount of real-world data to continuously improve its AI models. On the other hand, the strategic investment by Mercedes-Benz will enable Chongqing Afari Technology to form close strategic cooperation in the fields of intelligent driving and intelligent cockpit, and provide technical support for the new models to be launched in China, greatly enhancing Chongqing Afari Technology's brand image and business expansion potential in the global market. High R&D investment and commercialization challenges: the sweetness and bitterness of AI transformation Although the strategic focus has shifted to AI, the end business (automobiles, motorcycles, and general machinery) remains the company's main source of revenue and cash flow foundation. It is understood that in the first half of 2025, revenue contributions from automobile business and motorcycle business still dominated, accounting for over 85% of total revenue: automotive business revenue increased to RMB 2.599 billion, and motorcycle business revenue increased to RMB 1.277 billion. However, under intense market competition, the company's overall gross profit margin continues to be under pressure, reaching 5.5% in the first half of 2025. Especially in the automotive business, the gross profit continues to be negative, reaching a negative RMB 23.6 million in the first half of 2025, with a gross profit margin of -0.9%, indicating that while automotive sales and revenue have grown, profitability has not fully recovered. It is worth noting that in order to fulfill its AI strategy, Chongqing Afari Technology's R&D investment is rapidly increasing. For the six months ended June 30, 2025, the company's R&D expenses reached RMB 288 million, a significant increase of 59.7% compared to the same period in 2024, indicating that the company is allocating a large amount of resources to the construction of the AI technology stack to maintain a leading position in the fast-paced iteration of intelligent driving and intelligent cabins. The funds raised in the Hong Kong IPO are intended to be used to implement AI strategy, enhance research and development capabilities, and strengthen industrial chain integration. In the future, high R&D expenses are expected to continue in order to support the iterative upgrade of L3 and L4 level intelligent driving solutions. Therefore, for investors, the biggest risk and uncertainty for the company is also the pace of commercialization of the AI business. The prospectus clearly states that during the historical period, the company has not generated income from technologies such as intelligent driving, intelligent cabins, and Robotaxi solutions. If the growth rate of the "AI + Mobility" solution is lower than expected or the market acceptance is insufficient, it may have a significant impact on the company's prospects and operations. In this process, the complexity of intelligent driving technology itself, the long execution and verification cycles, and potential contract cancellations, delays, or supply chain shortages may hinder its commercialization process. In addition, the company also faces risks of supplier dependence (which may affect the supply and cost of key components), as well as the risk of not being able to timely launch new products to meet changing market demands and technological changes. Additionally, changes in geopolitics, international trade policies, export controls, and changes in economic or trade sanctions may also affect the company's international expansion, financial condition, and operational performance.