Competitive pricing battles in China have prompted Hozon to consider a Hong Kong IPO as a potential financial lifeline.
In 2023, Chinese electric vehicle manufacturer Neta Auto reported a revenue of RMB 13.555 billion (USD 1.87 billion), marking a significant milestone in the company's growth. Despite a year-on-year sales decline of approximately 16%, Neta managed to sell 124,189 vehicles, with an average product price of RMB 109,000 (USD 14,998).
The company, which began new car production in China in 2023, currently offers five mass-produced models, three of which start below RMB 130,000 (USD 17,888), targeting the new energy vehicle (NEV) market around RMB 100,000 (USD 13,760).
Neta is not resting on its laurels. The company is actively developing an intelligent cockpit system, an artificial intelligence large model, imaging technology, and system security, aiming to transform into a technology-focused company by 2026.
By the end of 2023, Neta had RMB 2.837 billion (USD 390 million) in cash and secured RMB 7 billion (USD 963 million) in a crossover financing round. The company's R&D expenditure was 10.6%, 6.9%, and 11.8% of total revenue, respectively, from 2019 to 2023, with an R&D ratio maintained no less than 12%, peaking at 30.64% in 2023.
Neta has established four R&D centres in Shanghai, Jiaxing, Beijing, and Hong Kong, employing 2,132 R&D personnel in various departments. The company has also developed the Shanhai and Yunhe vehicle platforms with a component commonality rate of 80%.
Looking ahead, Neta plans to launch one new model based on the high-end Shanhai platform and two new models based on the affordable Yunhe platform in the next two years. The company is also expanding its production footprint, with production sites announced to be built in Szeged, Hungary, and Turkey, with production starting at the end of 2025 and 2026, respectively.
Neta Auto, the brand of Hozon, launched in 2018, and the company has now set its sights on achieving global sales of one million units. In a strategic move, Hozon New Energy Automobile has filed an IPO to list on the Hong Kong Stock Exchange (HKEX).
Neta's factories in Thailand, Indonesia, and Malaysia are also part of the company's global expansion plans. The factories in Thailand and Indonesia started production in the first half of 2023, while the Malaysian factory is currently under construction, having begun in January.
In the first five months of 2024, Neta exported 16,458 vehicles, ranking first in export volume among new car-makers, but only accounted for 14.52% of its annual target. Despite this, Neta continues to push forward, aiming to make a significant impact in the global automotive market.
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