Chinese NEV Supplier Hozon Auto to Raise up to $1 Billion in Pre-IPO Round of Financing

Sina Tech learned from insiders on Thursday that Hozon Auto, a Chinese new energy vehicle supplier, is carrying out a Pre-IPO round of financing, with an amount of at least $800 million and a maximum amount of $1 billion. Hozon Auto has not yet responded to this news.

In October, Hozon Auto received 4 billion yuan ($626.57 million) in D1 round of financing led by Qihoo 360 Technology Co. Ltd. Previous media reports suggested that Hozon Auto, the parent company of NETA Auto, was carrying out an IPO in Hong Kong with a scale of $1 billion. According to informed sources, Hozon Auto is indeed planning an IPO, but the fundraising scale of the Hong Kong IPO is not yet clear. Hozon Auto hopes to achieve its IPO in Hong Kong as early as May 2022.

According to information provided by the insider, the average gross profit margin of the company’s U and V series, the main models of Hozon Auto, is about 6% when 40,000 vehicles are delivered, which is basically the same as that of Xpeng Motors. And deliveries have rocketed this year. According to official company data, Hozon Auto delivered 8,107 vehicles in October this year, which furthers the last nine months of consecutive new highs. This year’s cumulative delivery has reached 49,500 units, an increase of nearly 400% year-on-year.

Hozon Auto predicts that its annual delivery volume this year is expected to exceed 60,000 units and will continue to increase its layout in the future. The company plans to increase its stores to 600 in 2023, half of which will be directly operated, 1,000 in 2025, and half of which are direct-sale stores. In 2025, the annual sales volume of Hozon Auto is expected to exceed 500,000 vehicles.

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In terms of revenue, Hozon Auto expects its revenue to approach 6 billion yuan this year, 20 billion yuan in 2023 and over 70 billion yuan in 2025. At the same time, the company hopes to achieve a positive net profit in 2023.