Horizon Robotics, a Chinese firm that specializes in Autonomous driving, seeks to raise up to $696 million via an initial public offering (IPO) in Hong Kong. This offering is noteworthy because it intends to be the biggest in the Hong Kong Special Administrative Region (HKSAR) for 2024. The company plans to offer 1.36 billion shares, with the offer price ranging from HK$3.73 to HK3.99 ($0.51), based on official documents.
If successful, Horizon Robotics will outpace the IPO started by China Resources Beverage, which is in the process of book-building toward a listing of $650 million. The rise in IPO activity indicates that Hong Kong's capital markets may be regaining steam after a long slump caused by regulations and reduced approvals for Mainland companies seeking to list in overseas markets that could raise funds.
Then, investors have shown keen interest in Horizon Robotics, given that cornerstone investors are willing to invest about $219.8M worth of shares. Some of them include Alisoft China and Baidu, which both offered $50 million. This backing demonstrates the horizons investors have set for Horizon Robotics' growth and its market's place in the autonomous vehicle industry.
The interest was evident in the demand for Horizon's stock specifically and the growing interest investors are developing in technology companies in the region. The Chinese company listings market in the HKSAR has reached relatively low levels in recent years, mainly due to some strict regulatory measures that have halted many approvals. However, the expected IPO of Horizon Robotics might signal a shift as the city tries to regain its status on the financial map.
Horizon Robotics intends to spend 70% of the IPO proceeds on research and development for the next five years. This investment is aimed at improving high-level features such as advanced driver assistance systems and bringing more advanced autonomous driving to automobiles used in China's passenger market. The remaining 10% will be spent on sales and marketing communication as part of the firm's expansion of its market coverage.
The schedule for the company's IPO includes setting a final price on October 21st and trading the shares in the Hong Kong Stock Exchange on October 24th. Notably, Volkswagen is one of the shareholders owning a small percentage of Horizon Robotics, reflecting the close cooperation between traditional car manufacturers and new technology companies in the modern auto industry.