Chengtai Technology files for listing on the Hong Kong Stock Exchange: sales revenue from a single customer accounts for over 90%, with continuous losses over the past three years

On March 23, 2023, Shenzhen Chengtai Technology Co., Ltd. (hereinafter referred to as “Chengtai Technology”) submitted an updated listing application to the Hong Kong Stock Exchange, with Guotai Junan International serving as the sole sponsor. Previously, the company had initiated listing applications with the HKEX in June and December 2022.

Public information shows that Shenzhen Chengtai Technology was established in 2016 and is a millimeter-wave radar supplier. These products, as core sensing components for automotive intelligence, are widely used in passenger and commercial vehicles for intelligent driving. As of the last practicable date, the company has launched seven main radar models, including forward-looking, rear, and lateral radars (also known as corner radars).

Chengtai Technology cited data from Zhuoshi Consulting, indicating that in 2024, based on shipment volume, the company ranked first among domestic suppliers of automotive forward-looking millimeter-wave radars in China, and also ranked third in the Chinese automotive millimeter-wave radar market, with market shares of 9.3% and 4.5%, respectively.

In terms of performance, Chengtai Technology has shown a “revenue growth without profit growth” pattern over the past three years. Data shows that from 2023 to 2025, the company’s revenue rapidly increased from 157 million yuan to 1.12B yuan, nearly a sevenfold expansion over three years. During this period, millimeter-wave radar products contributed over 98.5% of the revenue.

However, its revenue growth is highly dependent on a single customer. The prospectus states that during the historical period, most of Chengtai Technology’s revenue came from sales of forward-looking and corner millimeter-wave radar products to “Customer A,” which have been integrated into several vehicle models. This customer is its largest client, with revenue contribution increasing from 91.3% in 2023 to 96.4% in 2025. The prospectus does not directly disclose the specific name of “Customer A,” but market speculation points to BYD. Additionally, from 2023 to 2025, revenue from the top five customers accounted for 96.4%, 98.3%, and 99.4%, respectively.

Notably, despite the rapid revenue growth over the past three years, Chengtai Technology still faces profitability pressures. Data shows that net losses for 2023 to 2025 were 96.6 million yuan, 21.8 million yuan, and 5.8 million yuan, respectively, totaling approximately 124 million yuan in net losses over three years. The company attributes the losses mainly to the early stage of research and development activities, which incur R&D expenses, as well as changes in redemption liabilities related to financing and operating expenses.

Gross profit margins have also fluctuated. Data indicates that from 2023 to 2025, gross margins on sales of millimeter-wave radar products increased from 31.1% to 34.0%, then sharply declined to 15.1% in 2025. Chengtai Technology explained that this was mainly due to a shift in product mix from forward-looking to corner millimeter-wave radars, which have different pricing and profit margin profiles; and strategic price reductions to expand into mid- and low-end vehicle markets, leading to a decrease in the average selling price of millimeter-wave radars from 204 yuan per unit in 2023 to 111 yuan in 2025.

Meanwhile, the prospectus shows that as of December 31, 2023 and 2024, Chengtai Technology recorded net current liabilities and net liabilities, and in 2023, 2024, and 2025, it recorded net cash outflows from operating activities. The company states that its ability to generate positive operating cash flow in the future depends on various factors, including revenue growth, product pricing, accounts receivable turnover, and the overall macroeconomic environment.

From an industry perspective, the prospectus indicates that amid the rapid growth of the intelligent driving industry, the automotive millimeter-wave radar sector is entering a golden growth period. The global market size for automotive millimeter-wave radars grew from 15.6 billion yuan in 2020 to 24.8 billion yuan in 2024, with an estimated reach of 50.1 billion yuan by 2029. The Chinese automotive millimeter-wave radar market expanded from 4.4 billion yuan in 2020 to 8.2 billion yuan in 2024, projected to reach 21.6 billion yuan by 2029.

Chengtai Technology stated in the prospectus that it has invested heavily in R&D for millimeter-wave radar technology, establishing three major R&D centers in China located in Shenzhen, Suzhou, and Wuhan. The company strategically sets up R&D teams near OEMs and intelligent driving technology hubs. These teams collaborate with operations and supply chain teams to continuously optimize and improve manufacturing processes and assist in supply chain planning.

Regarding the use of funds raised from the listing, the prospectus shows that Chengtai Technology plans to allocate the capital to research new technologies and develop products in new application fields, purchase testing equipment and upgrade production lines, build marketing and sales channels, pursue strategic mergers and acquisitions or investments, repay bank loans, and supplement working capital.