New Stock Outlook | Increase in revenue without increase in profit signifies multiple challenges, with the largest customer revenue share of Cloud Intelligence exceeding 90% in 2024.

Currently, the wave of intelligentization in automobiles is reshaping the industry landscape at an unprecedented speed. With the deep integration of technologies such as artificial intelligence, 5G communication, and high-precision sensors, intelligent driving, cabin interaction, and vehicle-road coordination are moving from concepts to large-scale implementation. This revolution is not only redefining the travel experience but also accelerating the shift of the automotive industry's value focus from "hardware-defined" to "software-defined." Whether it is the transformation and breakthrough of traditional car companies or the cross-border empowerment of technology companies, they are collectively driving intelligent cars towards a safer, more efficient, and more personalized future. Intelligentization has become a key track determining the next round of competition in the automotive industry. As the tide of the times surges, companies in the industry chain are gradually entering the capital market, trying to accelerate technological iteration and market expansion through the power of capital. A capital competition race around the future of travel authorization has already started. On January 19, Yun Intelligent Automotive Technology Co., Ltd. (referred to as "Yun Intelligent"), based in Hangzhou, submitted an application for listing on the main board of the Hong Kong Stock Exchange. CICC is its exclusive sponsor, officially kicking off a new journey to Hong Kong. According to a report by Frost & Sullivan, Yun Intelligent is the third largest domestic supplier of car TRANSPORT INT'L solutions in China. Based on the shipment volume of 4G on-board internet control units in 2024, its solutions rank first among all domestic suppliers. Financially, Yun Intelligent's latest performance has fallen into a dilemma of "revenue growth without profit growth." According to the prospectus, in 2023 and 2024, Yun Intelligent's revenue was approximately RMB 206 million and RMB 398 million, respectively, with adjusted net profits of RMB 10.635 million and RMB 40.145 million. Although revenue and profit saw a significant increase, by the first three quarters of 2025, Yun Intelligent's revenue had grown by 16.84% to RMB 301 million, but its adjusted net profit had decreased by 5.07% to RMB 31.127 million. Why has Yun Intelligent experienced a decline in profit in its latest performance? And can it return to a growth trajectory? This growth expectation may directly impact its IPO valuation level. TRANSPORT INT'L as the core business, emergency call solutions as a new growth curve Established in 2016, Yun Intelligent has been focusing on the research and application of intelligent connected car technology. After nearly a decade of accumulation and precipitation, it has become the leading domestic supplier in China's car-mounted intelligent connected solution industry, with the technical capabilities to provide comprehensive solutions. According to the prospectus, to meet the evolving demands of intelligent connected cars, Yun Intelligent has introduced multiple solutions covering TRANSPORT INT'L, emergency calls, sensing, and domain control solutions, aiming to seamlessly integrate with vehicle functions to ensure safety, efficiency, and enhance user experience. Among them, the TRANSPORT INT'L solution is the foundation of Yun Intelligent's business. In 2024, this business accounted for 83.5% of Yun Intelligent's revenue. The emergency call solution is a key element required for export car models, forming a synergistic effect with the TRANSPORT INT'L solution. This product is not only a legal safety unit in countries such as the European Union and the United Arab Emirates but has also become a mandatory standard requirement in China. In 2024, the revenue from Yun Intelligent's emergency call solution accounted for 7.2% of the total. The sensing and domain control solutions are key elements in realizing overall car intelligentization. Yun Intelligent's Central Gateway (CGW) product has been delivered to four vehicle manufacturers in 18 models, and stable mass production has been achieved. Currently, the company is developing and testing higher-level domain controllers (ZCU) products and is in discussions with four vehicle manufacturers for testing and supply of related products. In addition, the company is actively promoting the mass production and commercialization of products with ultra-wideband functions. In 2024, revenue from Yun Intelligent's sensing and domain control solutions accounted for 5.2% of the total. With a diversified product matrix, Yun Intelligent's comprehensive service capabilities continue to strengthen. In 2023, 2024, and for the first three quarters of 2025, Yun Intelligent put 87, 82, and 130 different models of solutions into mass production, supplying them to 17, 14, and 12 vehicle manufacturers, respectively. The shipment volume of various solutions during these periods was approximately 848,600, 1.504 million, and 1.293 million units. According to the Frost & Sullivan report, in 2024, Yun Intelligent successfully established partnerships with six out of the top ten vehicle manufacturers in China, providing solutions to two of the top three domestic automobile brands. As of September 30, 2025, Yun Intelligent had served 36 vehicle manufacturers with mass production projects. Regarding revenue, Yun Intelligent's steady revenue growth is mainly due to the continuous growth of its core business, the TRANSPORT INT'L solution. Additionally, the rapid growth of the emergency call solution and the sensing and domain control solution serve as new growth curves. In particular, the emergency call solution has seen significant growth due to regulatory standards in various countries and regions, making it a mandatory configuration. The percentage of revenue from this solution increased from 0.9% in 2023 to 19% in the first three quarters of 2025, with corresponding revenue increases from RMB 1.887 million to RMB 57.34 million. The growth in revenue from the sensing and domain control solution is mainly due to the increasing demand for integrated on-board systems in the automotive intelligentization field, especially in the areas of autonomous driving and advanced safety systems. The revenue from this business increased from 6% in 2023 to 9.6% in the first three quarters of 2025. It is worth noting that in the first three quarters of 2025, revenue from the TRANSPORT INT'L solution decreased by approximately 4% to around RMB 208 million. Yun Intelligent stated that this decline was mainly due to adjustments in the vehicle models of its customers. Although revenue from the TRANSPORT INT'L solution decreased during this period, the doubling growth of the emergency call solution and the sensing and domain control solution revenues continued to drive overall revenue growth. In terms of profitability, Yun Intelligent's adjusted net profit surged by 277.48% to RMB 40.145 million in 2024, mainly due to several factors. These include growth in revenue, benefits from economies of scale in production leading to a gross profit margin increase from 23.5% to 27.4%, and a decrease in the proportion of "tri-costs" from 22.4% in 2023 to 13.4%, which accelerated profit release. However, in the first three quarters of 2025, Yun Intelligent's adjusted net profit decreased by 5.07% to RMB 31.127 million, mainly due to a decrease in the gross profit margin by 1.4 percentage points to 24.6% and a slight increase in the proportion of tri-costs. The significant drop in the overall gross profit margin was primarily due to the gross profit margin of the sensing and domain control solution plummeting from 31.9% to 1.2%. Yun Intelligent explained that the sharp decline in the gross profit margin of this product was mainly due to strategic investments in new product development and strategic price reductions to win customers and market share. This may indicate a weakening market competitiveness of Yun Intelligent's sensing and domain control solutions, which is perhaps the main reason for the price reductions. With the "revenue growth without profit growth" trend shown in the first three quarters of 2025, Yun Intelligent may face deeper challenges and potential risks than what is visible on the surface. High customer concentration, challenges in the technological upgrading of the TRANSPORT INT'L solution, and the drastic decline in the gross profit margin of the sensing and domain control business directly indicate the weakening product competitiveness and profitability. In the short term, the emergency call business driven by policy remains a relatively stable growth pillar. The key test for Yun Intelligent to truly return to sustainable growth will be whether it can successfully steer the TRANSPORT INT'L solution, sensing, and domain control solutions onto a path of healthy development before the momentum of this business weakens. At the same time, concerns may arise among investors about Yun Intelligent's competitiveness in the sensing and domain control solution market. In the first three quarters of 2025, the shipment volume of Yun Intelligent's sensing and domain control solutions increased significantly to 493,400 units from 309,700 units in 2024, leading to a 178.1% year-on-year revenue increase to RMB 28.811 million. However, the gross profit margin of this business dropped from 31.9% to 1.2%. This may indicate that in the face of intensified industry competition, the adoption of more expensive chip solutions to meet higher-performance requirements has resulted in a sharp increase in costs. Due to market competition, the company accepted more stringent pricing to seize market share, resulting in the drastic decline in gross profit margin. Yun Intelligent will need to prove its market competitiveness in the sensing and domain control solution market to the market in the future. In conclusion, behind the revenue growth of Yun Intelligent lies multiple challenges: high customer concentration, technological upgrading pressure on the TRANSPORT INT'L solution, and the steep decline in the gross profit margin of the sensing and domain control business. In the short term, the emergency call business driven by regulatory policies remains a relatively certain growth pillar. Whether the company can successfully steer the TRANSPORT INT'L solution, sensing, and domain control solutions onto a path of sustainable development before the momentum of this business weakens will be a key test for Yun Intelligent in returning to sustainable growth.