Hozon Auto Completes Financing, Plans to List This Year
Chinese media outlet LatePost reported on Monday that Hozon Auto has recently completed a new round of financing of more than 2 billion yuan ($316 million). The main investment institutions included the CRRC Fund under direction of CRRC Corporation Limited and Shenzhen Capital Group Co., Ltd.
This round of financing is the third one of Hozon Auto’s D round financing. In October last year, Hozon Auto announced the completion of the D1 round of financing worth 4 billion yuan, of which Qihoo 360 led the investment with 2 billion yuan. In December, Hozon Auto disclosed the D + + round of financing involving CATL, Qihoo 360 and BAIC Capital, and others. According to LatePost, the amount of this round of financing is about 2 billion yuan.
After the completion of its Series D financing, the valuation of Hozon Auto now exceeds 25 billion yuan. The EV company has now started the Pre-IPO round of financing with a target valuation of about 45 billion yuan, and plans to start its IPO in Hong Kong this year. Hozon Auto told LatePost that its intent to list is subject to an official announcement of the company.
At present, the prices of the NETA U Pro and NETA V, the main models of Hozon Auto, start at 109,800 yuan and 62,800 yuan with subsidies, respectively.
The range of 100,000 yuan is becoming the most competitive market, as Li Auto‘s planned future price range is 150,000 yuan and NIO also plans to release lower-priced models through sub-brands. Some investors doubt whether Hozon Auto can maintain strong sales in this market environment.
Investors’ concerns also include that some of the cars sold by Hozon Auto may be used for business purposes such as online car-hailing instead of private use, which in the long run will affect the performance of automobile brands in the largest private car market. In November last year, Zhang Yong, CEO of Hozon Auto, disclosed that the vehicles directly sold by the company to car rental companies and other similar customers at that time accounted for about 9% of total sales.
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This January, Hozon Auto saw strong sales, with a delivery volume of 11,000 units, surpassing NIO and ranking under XPeng and Li Auto. Its monthly delivery volume has exceeded 10,000 for three consecutive months. At present, Hozon Auto’s sales network covers 27 provinces and 148 cities. During the Guangzhou Auto Show last November, Zhang Yong said that the target sales volume of the company will be 70,000 in 2021 and double that number in 2022.
