As autonomous driving technology becomes more widespread, the domestic substitution of core chassis components is entering a critical period. NASN TECH (stock code: 2261.HK), a company specializing in intelligent driving motion control, has officially launched its Hong Kong IPO subscription, aiming to list on the main board of the Hong Kong Stock Exchange on August 7.
The company's revenue has grown rapidly, driven by the volume production of its NBC (Integrated Intelligent Brake System) solution, giving it a first-mover advantage in the trend of replacing foreign suppliers. However, this growth is shadowed by persistent low gross margins, continuous losses, high customer concentration, and shrinking R&D spending. Adding to the uncertainty are a pending patent lawsuit, the absence of cornerstone investors, and a valuation significantly higher than comparable companies, all set against a backdrop of cooling market sentiment toward Hong Kong-listed autonomous driving stocks.
While the market for domestic alternatives is vast, NASN TECH faces stiff competition from both major automakers and other independent third-party suppliers. The global market for brake-by-wire solutions is projected to grow at a compound annual rate of 16.5% from 2025 to 2030, reaching 687.8 billion yuan. The Chinese market is expected to grow even faster, at 20.3% annually, to reach 244.7 billion yuan by 2030. Despite this rapid expansion, the current localization rate is just 22.5%, with a long-term target of 60.6% by 2030. NASN TECH ranks third among domestic suppliers in China by sales volume and seventh overall by revenue. It has secured deep partnerships with several leading domestic OEMs, proving its ability to enter top-tier supply chains. Yet, foreign independent suppliers hold a combined 57% market share, creating intense pressure. Furthermore, competition is growing from local players, especially those incubated by OEMs themselves, which puts independent firms like NASN TECH in a difficult position, needing to break through both foreign technology barriers and the internal supply networks of major car companies.
The company's IPO narrative is heavily based on its commercial success with the NBC product. NASN TECH is one of the few domestic firms capable of mass-producing three types of brake-by-wire systems (NBS, ESC, and NBC) and was the first to deploy its NBS system for L4-level commercial autonomous driving. Financially, revenue has surged, rising from 2.7 billion yuan in 2023 to 3.9 billion yuan in 2024 and 6.1 billion yuan in 2025, representing a three-year compound growth rate of over 50%. In the first quarter of 2026, revenue reached 1.5 billion yuan, a 46.9% year-on-year increase. This growth is fueled by the large-scale delivery of the NBC system. As of the first quarter of 2026, the NBC solution had secured 47 fixed-point orders from seven Chinese OEMs, with 20 vehicle models in mass production. NBC revenue soared from 110,000 yuan in 2023 to 3.0 billion yuan in 2025, hitting 1.1 billion yuan in Q1 2026, a 170% annual increase, now accounting for 70.6% of total revenue.
Despite strong revenue growth, the company's ability to turn a profit remains elusive, a major point of contention for investors. Gross margin improved from a low of 1.1% in 2023 to 10.7% in 2024 and 13.6% in 2025, but it slipped back to 10.1% in the first quarter of 2026, below the full-year level. This is significantly lower than the 20.4% gross margin reported by A-share brake component leader Bethel Automotive Safety Systems. The company remains in the red, with net losses of 2.0 billion yuan in 2023, 1.7 billion yuan in 2024, and 1.9 billion yuan in 2025. In Q1 2026, the net loss widened by 37.3% to 54.88 million yuan, with no sign of a turnaround.
The core reason for the weak profitability is the company's imbalanced customer base and the strong bargaining power of automakers. Between 2023 and 2025, the top five customers accounted for 97.9%, 96.5%, and 94.4% of revenue, respectively, a figure that remained at 96.9% in Q1 2026. In 2024, a single customer contributed over 60% of revenue. This heavy reliance on a few OEMs makes performance vulnerable to changes in their vehicle sales or supplier choices. The OEMs' strong negotiating position also leads to long payment cycles, with the average turnover days for receivables remaining high at 300 days in 2023, 245 in 2024, 205 in 2025, and 222 in Q1 2026, compressing profit margins.
Beyond profitability, NASN TECH faces several medium to long-term risks. First, R&D spending is declining, falling from 97 million yuan in 2023 to 88 million yuan in 2024 and further to 83 million yuan in 2025. This is concerning for a company that needs to develop next-generation products like steer-by-wire, which are still in R&D and not yet generating revenue. Second, the company's asset-liability ratio is nearly 200%, with total assets of 1.14 billion yuan against total liabilities of 2.25 billion yuan as of Q1 2026, raising liquidity concerns. Third, a German auto parts company filed five patent infringement lawsuits against NASN TECH's ESC product in March 2025, seeking a total of 50 million yuan in damages. While one claim has been dismissed, the other four are pending. The company has set aside a 10 million yuan provision, but an adverse ruling could lead to further payments, product halts, and loss of orders.
Several factors on the issuance side also create risk. The upper end of the IPO price implies a market cap of about 6.7 billion Hong Kong dollars, corresponding to a TTM price-to-sales (P/S) ratio of 8.7 times. This valuation is significantly higher than comparable companies. Traditional brake system makers like Bethel and others trade at a P/S of just 1.2 to 3.1 times, but their valuation logic is different due to their stable, profitable legacy businesses. A better comparison is with Hong Kong-listed LiDAR firms like Hesai Group and RoboSense, which are also incremental hardware suppliers to OEMs. Hesai trades at a 5.7 times P/S and has already turned a net profit, while RoboSense, still loss-making, trades at a 4.7 times P/S. Both are valued significantly lower than NASN TECH, even though the brake-by-wire market's scale-up is slower than the LiDAR sector's. The company's high valuation lacks short-term profit support. Furthermore, NASN TECH has no cornerstone investors for this IPO, suggesting a lack of institutional confidence at the current price. Finally, sentiment in the autonomous driving sector has cooled, with recent IPOs like Momenta's trading below their issue price, adding further uncertainty to NASN TECH's market debut.
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