Upcoming IPOs | Yundong Intelligence: Second Attempt to Rush onto the Hong Kong Main Board, with Capacity Expansion Coexisting with Profit Pressure

From intelligent cockpits and OTA upgrades to advanced driver assistance systems and vehicle-road collaboration, an increasing number of functions rely on the vehicle's stable and high-speed data connectivity capabilities, which also drive the rapid expansion of the transport intelligence solutions market. Recently, Yundong Intelligent, a supplier focused on in-vehicle intelligent connectivity solutions, has made another bid to list on the main board of the Hong Kong Stock Exchange. According to the prospectus, the company's main products include the vehicle networking control unit (T-Box), emergency call (eCall), and domain control solutions, serving multiple vehicle manufacturers. With the ongoing increase in the penetration rate of smart vehicles and the accelerated development of 5G vehicular networks, this company, which has entered the first tier of domestic transport intelligence firms, is poised to open new growth spaces based on its technological accumulation and industry benefits, and to continuously enhance its profitability amidst fierce competition. Transitioning from 4G to 5G, the in-vehicle intelligent connectivity sector is still in a growth cycle. Since its establishment, Yundong Intelligent has focused on the in-vehicle intelligent connectivity field, building its product system around the communication needs of vehicle manufacturers. The company currently offers 4G and 5G T-Boxes, emergency call systems, and related software solutions. Unlike companies that solely provide hardware modules, Yundong emphasizes its integrated hardware and software capabilities and has independently developed a communication software platform. From an industry perspective, the sector in which the company operates still has considerable growth potential. According to Frost & Sullivan data, the market size for in-vehicle intelligent connectivity solutions in China is expected to grow from 169.3 billion yuan in 2025 to 553 billion yuan in 2030, more than tripling in five years, driven primarily by increases in the penetration of smart connected vehicles, upgrades in automotive electronic and electrical architecture, and policy support. Among these, transport intelligence solutions remain the largest market segment. As 5G becomes more prevalent, the demand for high-bandwidth, low-latency communication is expected to drive upgrades in transport intelligence products. Currently, the company is still deriving most of its revenue from 4G products but has completed its transition to include 5G products. In its prospectus, it notes that its 5G solutions offer not just communication modules but complete solutions tailored to the entire vehicle application, suggesting that if the penetration rate of 5G T-Boxes continues to rise, the company stands to benefit from an upgrade in product structure leading to increased Average Selling Price (ASP). The automotive supply chain typically has a high entry barrier. From R&D to verification to mass delivery, vehicle manufacturers usually endure a long certification cycle, which gives companies already within the supply system a competitive edge. The prospectus shows that the company has served a total of 42 vehicle manufacturers and has formed integrated capabilities in research and development, certification, and manufacturing while possessing its own factory for production. Financially, from 2023 to 2025, the company's operating revenues are forecasted to be approximately 206 million yuan, 398 million yuan, and 449 million yuan, yielding a cumulative growth of over 100% across two years. During the same period, gross profit margins remain above 20%, reaching 27.4% in 2024 and 26.3% in 2025, showing relative stability overall. In terms of profit, the company is projected to achieve a net profit of 40.14 million yuan in 2024 and 39.57 million yuan in 2025. Although revenue continues to grow, profits remain relatively flat, indicating that the company is still in a phase of ongoing investment. Regarding R&D, from 2023 to 2025, the company's R&D expenses will remain around 30 million yuan, although the proportion of R&D costs relative to revenue may decrease as revenue increases, but it still remains at a high level. Meanwhile, the company is also advancing the construction of its second factory. According to the prospectus, the new factory in Wuhu, Anhui, is expected to add approximately 600,000 units in capacity once it has completed the ramp-up, in order to meet the growing order demands of key customers. Overall, Yundong Intelligent's primary investment logic stems from the dual themes of industry growth and domestic substitution. On one hand, the continuous growth of new energy vehicles drives an increase in demand for transport intelligence; on the other hand, under the trend of localization in the automotive supply chain, local suppliers have the opportunity to continuously expand their market share. Though the company is not the industry leader, it has already entered the first tier domestically, and if 5G products burgeon and continue securing designated new models, it has the potential for further revenue growth. However, challenges remain behind the high growth, with ongoing concerns over customer concentration and profitability quality. While Yundong Intelligent has established a market position, its future operations still face tests regarding customer structure, profitability quality, and market competition. Reports indicate that from 2023 to May 2026, revenue from the top five customers accounted for 97.6%, 96.7%, 95.6%, and 96.0%, respectively, while the largest client's revenue share was as high as 72.6%, 90.8%, 85.6%, and 77.4%. Such high customer concentration means that the company's operational performance largely depends on the procurement pace of its core clients. If major clients' sales decline, adjustments in the supplier system occur, or new model projects do not progress as expected, the company may experience noticeable revenue fluctuations. Although the company stated it is actively expanding its customer base and has served 42 vehicle manufacturers cumulatively, the contribution from new customers is yet to materialize in its revenue structure. Thus, customer diversification remains an important indicator for future operations. Additionally, the current transport intelligence market has both international Tier 1 suppliers and domestic automotive electronics companies continuing to invest. With the gradual popularization of 5G, more manufacturers are entering the market, leading to continuous iterations of new technologies, resulting in potentially increased price competition. Particularly, the automotive supply chain has historically faced pressure to reduce prices, with vehicle manufacturers usually requiring suppliers to continuously lower costs. If the pace of product upgrades cannot keep up with price declines, the company's profitability could be adversely affected. In terms of profitability quality, the companys revenue has continued to grow, but the profit growth rate has significantly slowed. Revenue is projected to reach 449 million yuan in 2025, yet the net profit is slightly lower than in the previous year. In its prospectus, it explains that this is mainly due to increased administrative expenses, decreased other income, and variations in the book value of redeemable debts. From an operational standpoint, the growth rate of administrative expenses exceeds that of revenue, indicating that as the company scales, management costs increase correspondingly. If future revenue growth slows while costs remain high, the profit margin may continue to be pressured. From a manufacturing capability perspective, although rising self-production ratios contribute to enhancing quality control, the construction of a new factory also adds fixed asset and depreciation pressures. If market demand does not meet expectations in the future, underutilized new capacity could equally drag down profitability. Looking ahead, the future competitive landscape of the industry will be determined not only by the hardware products themselves but also by software platform capabilities, vehicle communication system integration capabilities, and synergies with intelligent driving and intelligent cockpits. As centralized computing platforms and regional control architectures become more popular, transport intelligence products may also undergo changes. Therefore, the companys ability to continuously maintain R&D investment and rapidly adapt to the evolution of new generation automotive electronic architectures will directly impact its future competitiveness. In summary, the sector in which Yundong Intelligent operates aligns with the long-term development direction of automotive intelligence. The company has established a certain market position and possesses competitive advantages such as independent R&D, customer certification, and manufacturing capabilities, providing a foundation for growth amidst a backdrop of industry expansion. Based on the information disclosed in the prospectus, the company still belongs to the growth category within automotive electronics. Its future performance will depend more on its ability to expand new customers, the pace of 5G product proliferation, and whether it can continuously leverage economies of scale. For the market, beyond monitoring industry prosperity, it is equally essential to continually observe whether the companys revenue structure diversifies, if profitability improves further, and whether new capacity can be successfully converted into actual orders, all of which will affect its long-term growth potential.