V2X solution developer PATEO files for IPO on Hong Kong Stock Exchange

Beijing (Gasgoo)- On June 28, intelligent cockpit and V2X solution provider PATEO CONNECT Technology (Shanghai) Corporation ("PATEO") officially submitted its application for an initial public offering (IPO) to the Hong Kong Stock Exchange.

In 2010, the company launched China's first 3G V2X system, becoming one of the early players in the country's intelligent connected vehicle market. It is also among the few companies that developed intelligent cockpit solutions in the early stages.

According to the prospectus, PATEO has undergone multiple financing rounds, the most recent being a Series D round in the first half of 2024, which raised for the company approximately 1.047 billion yuan. The investment brought PATEO’s valuation to around 8.572 billion yuan.

As of December 31, 2023, PATEO has been qualified as an intelligent cockpit supplier by 22 automakers, including 15 Chinese automakers, 5 joint ventures, and 2 global automakers. In the first five months of 2024, PATEO secured 17 new contracts from seven carmakers for its intelligent cockpit solutions. By March 31 this year, the company had served over 40 automotive brands and more than 200 vehicle models.

Intelligent cockpit solution products are the primary source of PATEO's revenue, driving the company's financial growth. From 2021 to 2023, PATEO's revenues were 864 million yuan, 1.218 billion yuan (+41% YoY), and 1.496 billion yuan (+22.8% YoY), respectively. Revenue from intelligent cockpit solutions accounted for 85.7%, 88.6%, and 90.4% of total revenue in these years.

Despite the revenue growth, the company remains unprofitable. From 2021 to 2023, PATEO reported net losses of 372 million yuan, 452 million yuan, and 284 million yuan, respectively, with a cumulative net loss exceeding 1.1 billion yuan over these three years. During this period, PATEO’s gross profit margins were 21.3%, 14.1%, and 15.4%, and R&D expenses were 279 million yuan, 277 million yuan, and 235 million yuan.

PATEO attributes the continued losses to significant upfront investments aimed at achieving economies of scale.