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Interest in self-driving cars has increased again because of Tesla's recent, much-hyped robotaxi event. Chinese autonomous driving company Horizon Robotics has chosen an excellent time to lift funds through a Hong Kong stock market listing. If it meets its goal of raising as much as $696 million, it could be town's largest IPO this yr
The Intel and Volkswagen-backed company will sell 1.36 billion shares. This would make the listing larger than China Resources Beverage. Before Horizon's announcement, this soft drinks company was heading in the right direction to drag off town's largest recent share sale of 2024 after it began bookbuilding on Tuesday.
In Hong Kong, several large initial public offerings in close succession have often led to more dispersed retail investor funds and lower demand for corporations that will not be household names. This is more likely to be less of an issue for Horizon, because it has already attracted significant interest from corporate investors. Key investors within the Horizon stock offering include Alibaba Group's online business software division and Chinese web search giant Baidu.
There are good reasons for the interest. Horizon produces advanced driver assistance systems and autonomous driving solutions for passenger vehicles in China. Unlike some self-driving and software startups which have not yet developed a viable product or business model, Horizon has already served customers corresponding to Volkswagen's Audi, Continental, BYD, Li Auto and SAIC. Since 2022, Volkswagen has been investing along with Horizon in the event of technologies to integrate autonomous driving functions on a single chip. The proceeds generated from the listing will probably be used for research and development in addition to sales and marketing.
Autonomous driving technology, particularly fully self-driving cars, is the topic of much debate. The commercialization and mass production of self-driving cars is more likely to be a few years in the long run. But that doesn't necessarily mean it would take that long before individual autonomous driving functions that also require driver supervision may be integrated into today's cars as lucrative additions.
Autonomous driving technologies use software, radar, lidar sensors and cameras to extend safety and luxury for drivers. For example, today's state-of-the-art technology can warn drivers of obstacles, help avoid collisions, and assist with parking and lane centering – all of which automakers can monetize through premium features.
Hong Kong's deflated real estate market could use the hype generated by self-driving cars. A successful Horizon IPO should provide the much-needed push to get out of the slow lane.
