New Stock Outlook | With a 10-fold increase in revenue and over 900 million dollars in losses over the past three years, when will Zhendrive Technology's economies of scale lead to a turning point in profitability?

In recent years, driven by the continuous deepening of electrification and intelligence, the new energy vehicle industry is undergoing a profound structural transformation. This transformation fundamentally reshapes the requirements of OEMs for electronic control systems. The core demand has now focused on solutions that are easy to integrate, cross-platform reusable, and can support the reduction of the vehicle development cycle. The continuous expansion of demand has propelled the electronic control market into a fast lane of development. From 2020 to 2025, the global electronic control market size will increase from 383.1 billion yuan to 469.9 billion yuan, and is expected to further expand to 608.4 billion yuan by 2030. Riding on the rapid development of the market, electronic control solution provider ZENDrive Technology (Shanghai) Co., Ltd. has also seized opportunities and achieved rapid development in the past few years. GMTEight has noticed that recently, ZENDrive Technology has once again submitted its prospectus to the Hong Kong Stock Exchange. As of the end of May this year, the company has obtained 59 designations from 15 OEMs either directly or through first-tier suppliers. The company's solutions have been applied to 92 models, of which 74 have entered the mass production stage. According to Frost & Sullivan, in terms of sales revenue, ZENDrive Technology's main solutions are in the leading position in the Chinese market. However, while ZENDrive Technology has strengthened its market influence, it cannot ignore the shadow of continuous losses. From 2023 to 2025, the company has accumulated losses of over 900 million yuan. For this young company undergoing rapid expansion, how to transform its scale advantage into profit quality may be the most core issue in its long-term growth narrative. Profit dilemma behind explosive growth Looking at ZENDrive Technology's prospectus, the company's revenue curve over the past few years has been steep. From 2023 to 2025, ZENDrive Technology's revenue was 160 million yuan, 1.159 billion yuan, and 2 billion yuan respectively; by the end of May this year, the revenue further increased to 956 million yuan, with a year-on-year growth rate exceeding 73%. Breaking down the revenue structure, motor controllers are ZENDrive Technology's largest source of revenue, accounting for 86.5%, 82.5%, and 76% of the revenue from 2023 to 2025, respectively. In the first five months of 2026, revenue from motor controller business accounted for 81.1% of the company's revenue. During the reporting period, the rapid expansion of the power brick business also played a key role in the continuous growth of ZENDrive Technology's revenue. From 2023 to 2025, revenue from this business contributed 9.661 million yuan, 179 million yuan, and 347 million yuan respectively, accounting for 6%, 15.4%, and 17.3% of the revenue. During the same period, ZENDrive Technology also had revenue from power modules, R&D services, and other businesses, but the revenue scale was relatively small. On the other hand, while the revenue has experienced explosive growth, ZENDrive Technology's profit situation has not been satisfactory. From 2023 to 2025, the company's gross profit was -13.342 million yuan, 147.43 million yuan, and 112 million yuan, with gross profit margins of -8.3%, 1.3%, and 5.6% respectively, showing a trend of continuous improvement. By the first five months of 2026, the company recorded a gross profit of 86.484 million yuan, with a gross profit margin of 9%, further improving. However, in terms of net profit, from 2023 to 2025, ZENDrive Technology's net losses reached 237 million yuan, 335 million yuan, and 331 million yuan, totaling over 900 million yuan in three years. In the first five months of this year, ZENDrive Technology's net loss was 128 million yuan, showing some improvement year-on-year, but there still seems to be a long way to go to overcome the profit dilemma. Can the strategy of trading volume for price help break through the siege? As ZENDrive Technology launches its sprint to the Hong Kong Stock Exchange, the most pressing question for the broader secondary market investors is undoubtedly when will the company's profit inflection point come? Analyzing the key operational metrics of ZENDrive Technology's electronic control solutions, the above question is not easy to answer. Data shows that from 2023 to the first five months of 2026, the average sales volume of ZENDrive Technology's motor controllers was 31,900 units, 30,900 units, 61,400 units, and 31,200 units, showing a continuous upward trend; however, during the same period, the average selling price of the product was 4,328 yuan, 3,099 yuan, 2,473 yuan, and 2,484 yuan, indicating a trend of increasing volume but decreasing prices. Similarly, during the same period, the company's power bricks and power modules also faced pressure from continuously declining prices. According to ZENDrive Technology, the main reason for the decrease in the average selling price of the company's products is the intensified competition in the new energy vehicle market, as well as changes in the product-specific configuration and sales mix of the company's main product lines. At the industry level, continued pricing pressure has led to a decrease in vehicle prices, and this pressure has been transmitted to upstream suppliers. In addition, the increasing industry concentration has objectively intensified competition among suppliers, with data showing that in 2025, in terms of installation volume, the combined market share of the top ten new energy vehicle electronic control suppliers in China was 70.4%, and the market share of the top five power brick suppliers was as high as 92.9%. Although it may be difficult to overcome the profit dilemma in the short term, ZENDrive Technology believes that as the scale effect becomes apparent, the company's path to profitability will become clearer. The power brick business that is still in its early stages of development may become an important lever for ZENDrive Technology's further growth in the future. According to Frost & Sullivan data, the market penetration rate of power bricks will significantly increase from 5.7% in 2024 to 39.7% in 2030, surpassing the overall growth of the electronic control market and releasing a large amount of incremental demand. As one of the first companies to commercialize and scale the power brick solution, ZENDrive Technology is expected to benefit deeply from this historic phase of accelerated market penetration. It is also worth mentioning that ZENDrive Technology plans to leverage its core competencies in power electronics, motor control, and system integration to expand its electronic control and power electronic solutions from traditional automotive applications to emerging markets with strong long-term growth potential, including eVTOL, in-body intelligence, and AIDC fields. However, despite painting a grand future for itself, ZENDrive Technology may need to provide a clear and coherent narrative to the market in order to prove its long-term investment value, especially considering the discerning nature of investors. If ZENDrive Technology manages to fulfill its dream of listing on the Hong Kong Stock Exchange, the company also needs to present a clear WINOX table as soon as possible to demonstrate its long-term investment value to the market.