Public data from the Ministry of Industry and Information Technology shows that since 2026, the penetration rate of L2-level combined driving assistance features in passenger vehicles has reached 70.5%, while the penetration rate of navigation-on-pilot (NOA) functions has reached 34.2%. Huizhou Desay Sv Automotive Co., Ltd. (referred to as "Desay SV") derives its revenue primarily from three businesses within automotive intelligence: smart cockpit, intelligent driving, and connected services, with its main products capable of supporting from L2+ assisted driving to L4 autonomous driving. On April 12, 2026, Desay SV submitted its application to the Hong Kong Stock Exchange.

Since 2024, while Desay SV's revenue and net profit have maintained growth, its gross margin has been declining. Moreover, Desay SV claims to be committed to advancing its globalization strategy, yet its overseas revenue share has remained below 11% over the past three years and the latest reporting period. Additionally, Desay SV states it is expanding into emerging smart markets such as unmanned delivery vehicles to create a second growth curve—however, by the end of 2025, its unmanned delivery vehicle brand "Chuanxing Zhiyuan" had yet to generate any revenue. Meanwhile, its R&D investment ratio has been below the industry average for the past three years. Furthermore, Desay SV's receivables account for over 30% of its revenue, higher than the industry average, and its inventory has climbed year after year to exceed 6 billion yuan—all factors worth close attention.

It should be noted that Desay SV's stated fundraising purposes for this listing application include capacity expansion and working capital supplementation. But in October 2025, the company raised over 4 billion yuan through a private placement, and as of the end of July 2026, 2.78 billion yuan of idle raised funds had been used to purchase wealth management products. In addition, Desay SV has distributed cumulative dividends exceeding 1.8 billion yuan over the past three years, while the capacity utilization rate for smart cockpit products declined in 2024-2025.

I. Three core businesses of smart cockpit, intelligent driving, and connected services show year-on-year growth, with overseas revenue share below 11%

Looking back at its history, Desay SV has focused for many years on the manufacturing and sales of automotive electronic products. In December 2017, Desay SV completed its initial public offering and landed on the main board of the Shenzhen Stock Exchange. The company concentrates on the three major sectors of automotive intelligence—smart cockpit, intelligent driving, and connected services—with both revenue and attributable net profit growing steadily year by year.

1.1 Focus on three core industries; revenue and attributable net profit have grown annually

According to data from the China Association of Automobile Manufacturers, in the first half of 2026, domestic new energy vehicle production and sales reached 7.438 million and 7.446 million units respectively, representing year-on-year growth of 6.7% and 7.3%. New energy vehicle sales accounted for 49.6% of total new car sales. Furthermore, according to Desay SV's prospectus with a last practicable date of April 5, 2026, the global automotive industry is placing increasing emphasis on software and intelligence, with smart cockpit and intelligent driving solutions accounting for a rising share of per-vehicle value.

Against this backdrop, Desay SV's operating performance has grown year after year. According to its 2025 annual report, as a mobility technology company, Desay SV focuses on the core sectors of automotive intelligence: smart cockpit, intelligent driving, and connected services. Based on the 2025 annual report and the 2026 semi-annual report, from 2023 to 2025, Desay SV's operating revenue was 21.908 billion yuan, 27.618 billion yuan, and 32.557 billion yuan respectively, with first-half 2026 revenue of 14.901 billion yuan. Attributable net profit was 1.547 billion yuan, 2.005 billion yuan, and 2.454 billion yuan, with first-half 2026 profit of 1.245 billion yuan. Calculations show that from 2023 to 2025, Desay SV's revenue growth rates were 26.06%, 17.88%, and 1.75% year-on-year, while attributable net profit growth rates were 29.62%, 22.38%, and 1.81%.

Clearly, in 2024 and 2025, Desay SV's revenue and attributable net profit maintained growth with rates exceeding 17%, with 2025 revenue surpassing 30 billion yuan, and the first half of 2026 continued to see positive year-on-year growth.

1.2 Gross margin declined in the past two years; both top revenue-generating products saw margin declines in 2025

Based on the 2024-2025 annual reports and the 2026 semi-annual report, in 2023-2025 and January-June 2026, Desay SV's smart cockpit revenue was 15.802 billion yuan, 18.23 billion yuan, 20.585 billion yuan, and 9.756 billion yuan respectively, accounting for 72.13%, 66.01%, 63.23%, and 65.48% of operating revenue. During the same periods, intelligent driving revenue was 4.485 billion yuan, 7.314 billion yuan, 9.7 billion yuan, and 3.918 billion yuan, representing 20.47%, 26.48%, 29.79%, and 26.29% of revenue. Connected services and other revenue was 1.621 billion yuan, 2.074 billion yuan, 2.272 billion yuan, and 1.227 billion yuan, accounting for 7.4%, 7.51%, 6.98%, and 8.23% respectively.

In the past two years, Desay SV's gross margin has declined. According to the prospectus, from 2023 to 2025, Desay SV's gross margins were 20%, 19.9%, and 19.1%. The company attributes the decline from 19.9% in 2024 to 19.1% in 2025 primarily to the falling gross margin of intelligent driving products. Looking at the specifics, the gross margins for intelligent driving products were 15.9%, 19.9%, and 16.4% in 2023-2025, while those for smart cockpit products were 20%, 19.1%, and 18.8%. In 2024-2025, Desay SV's gross margins declined, and the combined revenue share of smart cockpit and intelligent driving products exceeded 90% in 2023-2025 and January-June 2026. Notably, both top revenue-generating products saw their 2025 gross margins fall compared to 2024.

1.3 Claims commitment to global expansion, yet overseas revenue share remains below 11% for the past three years and latest period

According to the prospectus, Desay SV is dedicated to advancing its globalization strategy, continuously accelerating business expansion, capacity deployment, and operational system construction to enhance its international competitiveness in the global smart mobility market. Following its local internationalization strategy, Desay SV is promoting localized arrangements for R&D, manufacturing, and supply chains across major global automotive markets. Despite these efforts, overseas revenue has accounted for less than 11% over the past three years and the latest reporting period.

Based on the 2024-2025 annual reports and the 2026 semi-annual report, domestic sales revenue for 2023-2025 and January-June 2026 was 20.264 billion yuan, 25.91 billion yuan, 30.147 billion yuan, and 13.284 billion yuan respectively, representing 92.5%, 93.82%, 92.6%, and 89.15% of operating revenue. During the same periods, overseas sales revenue was 1.644 billion yuan, 1.708 billion yuan, 2.41 billion yuan, and 1.617 billion yuan, accounting for 7.5%, 6.18%, 7.4%, and 10.85% of revenue. In summary, Desay SV is a mobile intelligence technology platform whose revenue mainly comes from the three businesses of smart cockpit, intelligent driving, and connected services, with the combined share of smart cockpit and intelligent driving exceeding 90%. However, both businesses saw declining gross margins in 2025, and overseas revenue has remained below 11%.

II. New unmanned delivery vehicle business has yet to generate revenue; R&D investment ratio below industry average

The automotive industry has entered a structural adjustment cycle, facing dual challenges of ensuring supply stability and cost control due to tightening supply of vehicle-grade core components, fluctuating raw material prices, and intensifying competition. Desay SV claims it is expanding into emerging smart markets such as unmanned delivery vehicles to build a second growth curve. In September 2025, it announced the launch of its unmanned delivery vehicle brand "Chuanxing Zhiyuan," but by the end of that year, the unmanned delivery vehicle business had not generated any revenue.

2.1 Claims expansion into unmanned delivery vehicles for a second growth curve; "Chuanxing Zhiyuan" generated no revenue by end of 2025

According to the prospectus, Desay SV plans to apply its vehicle-grade R&D system, manufacturing processes, and quality control capabilities accumulated in the intelligent vehicle sector to emerging smart markets such as unmanned delivery vehicles and intelligent robots, thereby creating a second growth curve. In September 2025, Desay SV announced the launch of its unmanned delivery vehicle brand "Chuanxing Zhiyuan," followed by the launch of an AI Cube base for intelligent robots in November 2025. In the unmanned delivery vehicle market, corporate revenue primarily comes from commercial operation of vehicles, technical service licensing, and bundled software and hardware solutions. However, as of the end of 2025, neither the unmanned delivery vehicles nor the AI Cube had generated any revenue.

According to the 2026 semi-annual report, during the reporting period, the robot domain control product achieved mass production while development of multiple solutions is underway, with plans to continue in-depth strategic cooperation with multiple embodied intelligence companies. The "Chuanxing Zhiyuan" low-speed unmanned vehicles have begun operations in multiple locations in Guangdong, with cooperation intentions reached with several customers and deliveries being progressively advanced. It is evident that while Desay SV announced its unmanned delivery vehicle brand in September 2025 and launched the AI Cube in November 2025, no revenue had been generated by end of 2025. In the first half of 2026, cooperation intentions with multiple customers were reached with deliveries being rolled out. Meanwhile, Desay SV's R&D investment ratio has lagged behind its peers.

2.2 From 2023 to 2025, Desay SV's R&D investment ratio was below the industry average

According to the 2024 private placement prospectus (registration version) issued by Desay SV on August 18, 2025, its comparable A-share listed companies primarily include Ningbo Joyson Electronic Corp. (referred to as "Joyson Electronics"), Beijing Kingfar International Technology Co., Ltd. (referred to as "Kingfar Technology"), and Huizhou Foryou Group Co., Ltd. (referred to as "Foryou Group"). These listed companies' main businesses cover intelligent driving and smart cockpit, with comparable scale and downstream customers mainly being vehicle manufacturers. Based on the 2023-2025 annual reports of these three comparable companies, Joyson Electronics' R&D investment as a percentage of operating revenue was 6.55%, 6.6%, and 7.22% respectively during 2023-2025. Kingfar Technology's ratios were 22.88%, 22.36%, and 15.45%, while Foryou Group's were 9.03%, 8.19%, and 7.6%. Calculations show that the average R&D investment ratios for these three comparable companies were 12.82%, 12.38%, and 10.09% during the same periods.

According to Desay SV's 2024-2025 annual reports, its R&D investment ratios were 9.26%, 7.94%, and 8.1% in 2023-2025. Thus, in 2024-2025, Desay SV's R&D investment ratio first decreased then increased, yet its 2025 ratio remained below the 2023 level. Across 2023-2025, Desay SV's R&D investment ratio was consistently below the industry average.

III. Receivables exceed 30% of revenue and surpass peer average; inventory climbs year by year to over 6 billion yuan

It should be noted that Desay SV's customers are mainly vehicle manufacturers. During the reporting period, revenue from its top five customers exceeded 50% of total revenue. Meanwhile, its suppliers are primarily providers of chips, display modules, PCBA, and various electronic components, with procurement from the top five suppliers trending upward during the reporting period.

3.1 Top five customers contribute over half of revenue; transactions with former largest customer fell from 6.604 billion yuan in 2024 to 4.335 billion yuan in 2025

During the reporting period, Desay SV's top five customers accounted for more than half of its revenue. According to the prospectus, sales to the top five customers were 11.906 billion yuan, 16.37 billion yuan, and 18.077 billion yuan in 2023-2025, representing 54.3%, 59.3%, and 55.5% of total sales in the respective periods. During the same periods, sales to the largest customer were 4.997 billion yuan, 6.604 billion yuan, and 4.728 billion yuan, accounting for 22.8%, 23.9%, and 14.5% of total sales. Notably, in 2023-2024, Desay SV's largest customer was electric vehicle manufacturer Customer A, which primarily purchased smart cockpit products, intelligent driving products, and others. However, in 2025, sales to Customer A decreased from 6.604 billion yuan in 2024 to 4.335 billion yuan.

The issues do not end here.

3.2 Receivables exceeded 10 billion yuan by end of June 2026; receivables as a share of revenue exceeded 30% from 2023-2025 and the latest period, above the peer average

Based on the 2024-2025 annual reports and the 2026 semi-annual report, at the end of 2023-2025 and June 2026, Desay SV's notes receivable were 0.014 billion yuan, 0.067 billion yuan, 0.242 billion yuan, and 0.316 billion yuan respectively. Accounts receivable were 7.168 billion yuan, 9.604 billion yuan, 9.778 billion yuan, and 8.737 billion yuan, while receivables financing was 1.548 billion yuan, 1.68 billion yuan, 2.404 billion yuan, and 2.078 billion yuan. Calculations show that the combined total of notes receivable, accounts receivable, and receivables financing (collectively "receivables") was 8.73 billion yuan, 11.35 billion yuan, 12.424 billion yuan, and 11.131 billion yuan, representing 39.85%, 41.1%, 38.16%, and 74.7% of operating revenue respectively. Based on the 2024-2025 annual reports of the three comparable companies, the average receivables-to-revenue ratios for Joyson Electronics, Kingfar Technology, and Foryou Group were 32.87%, 36.85%, 33.2%, and 66.46% at the end of 2023-2025 and June 2026 respectively. In other words, as of the end of June 2026, Desay SV's receivables exceeded 11 billion yuan, and the receivables-to-revenue ratio surpassed 30% across all periods — higher than the peer average. On the other hand, procurement from the top five suppliers has shown an upward trend during the reporting period.

3.3 Inventory climbed to over 6 billion yuan; 308 million yuan in inventory impairment provisions made in 2025

According to the prospectus, Desay SV purchases raw materials and components used in its products from third-party suppliers. During the track record period, raw material costs formed the major portion of total cost of sales, mainly including chips, display modules, PCBA, and various electronic components. From 2023 to 2025, raw material costs were 15.939 billion yuan, 20.352 billion yuan, and 24.183 billion yuan respectively, accounting for 90.9%, 92%, and 91.8% of total cost of sales in the respective years. During the same period, purchases from the top five suppliers were 4.524 billion yuan, 8.112 billion yuan, and 10.541 billion yuan, representing 28.8%, 39.1%, and 41.1% of total procurement. Purchases from the largest raw material supplier were 1.265 billion yuan, 2.729 billion yuan, and 3.642 billion yuan, accounting for 8%, 13.1%, and 14.2% respectively.

Desay SV notes that during the track record period, most of its electronic components were procured from overseas suppliers, making its production volume and unit production costs dependent on the ability to obtain key raw materials at competitive prices and in sufficient quantities. For example, the prices of storage chips, one of Desay SV's key raw materials, have experienced significant fluctuations in the past, and there is no guarantee that Desay SV can pass on all or any portion of increased raw material costs to customers. If such circumstances occur, gross margin and operating results could be materially adversely affected. Beyond that, Desay SV's inventory has been climbing year by year. According to the prospectus and the 2026 semi-annual report, at the end of 2023-2025 and the end of Q2 2026, Desay SV's inventory was 3.26 billion yuan, 3.696 billion yuan, 4.789 billion yuan, and 6.994 billion yuan respectively. Calculations show that inventory in the first half of 2026 increased by 46.04% compared to the end of 2025, with inventory as a share of total assets rising to 22.95% by the end of June 2026.

According to Desay SV's 2025 asset impairment provision announcement dated March 5, 2026, the company made total credit and asset impairment provisions of 431 million yuan in 2025, accounting for 17.58% of attributable net profit for the year. Asset impairment provisions were 403 million yuan, of which inventory impairment provisions amounted to 308 million yuan. In summary, during the reporting period, Desay SV's top five customers accounted for over 50% of revenue while procurement from the top five suppliers rose year by year. Receivables as a share of revenue exceeded 30% and remained above the peer average. By the end of June 2026, inventory had climbed to 6.994 billion yuan, with 308 million yuan in inventory impairment provisions made in 2025.

IV. Raising funds for capacity expansion while smart cockpit utilization declines; over 2.7 billion yuan in wealth management products and 1.8 billion yuan in three-year dividends alongside working capital fundraising

Looking back, in October 2025, Desay SV raised over 4 billion yuan through a private placement. As of the end of July 2026, 2.78 billion yuan of idle raised funds had been used for wealth management products. Furthermore, on the other side of Desay SV's fundraising to supplement working capital, its asset-liability ratio has been declining, cash on hand exceeds 800 million yuan, and cumulative dividends over the past three years exceed 1.8 billion yuan.

4.1 Fundraising uses include capacity expansion; smart cockpit capacity utilization declined in 2024-2025

The prospectus shows that the fundraising purposes for this listing include: R&D plans to drive continuous upgrades and iterations of intelligent vehicle solutions and to further promote the spillover of vehicle-grade intelligent technology capabilities into broader intelligent applications such as unmanned delivery vehicles and intelligent robots at scale; capacity expansion with plans to build a second-phase production plant in Chengdu; strategic and industry-related investments and acquisitions; and working capital and other general corporate purposes. Regarding capacity expansion, the new production facilities are intended to enhance Desay SV's regional manufacturing and delivery capabilities in China, support coordinated capacity deployment across multiple locations, and better meet delivery requirements of customers nationwide. They are expected to be primarily used for producing smart cockpit and intelligent driving products. The new facilities are expected to be equipped with cutting-edge automated production lines, high-precision processing equipment, and auxiliary tools to help achieve higher production efficiency and economies of scale. From 2023 to 2025, Desay SV's design capacity for smart cockpit products was 20.085 million units, 21.04 million units, and 22.395 million units respectively, with utilization rates of 91.4%, 89.7%, and 85%. During the same period, design capacity for intelligent driving products was 7.488 million units, 8.089 million units, and 17.526 million units, with utilization rates of 90.5%, 83.7%, and 90.5%.

Clearly, the fundraising purposes for this listing include capacity expansion and the production of smart cockpit and intelligent driving products. However, in 2024-2025, the capacity utilization rate for smart cockpit products declined, while intelligent driving product capacity utilization has not yet reached saturation.

4.2 Fundraising uses include working capital and general corporate purposes; 2.78 billion yuan from October 2025 placement used for wealth management products by end of July 2026

According to the listing announcement for the 2024 private placement of A-shares signed by Desay SV on October 9, 2025, and its 2025 annual report, the newly issued 41,893,333 shares from the private placement were listed on October 24, 2025, with net proceeds of 4.393 billion yuan. The raised funds are intended for the Desay SV Automotive Electronics Central and Western China Base Construction Project (Phase I), the Intelligent Automotive Electronic System and Components Production Project, and the Intelligent Computing Center and Cockpit-Driving Fusion Platform R&D Project, with expected dates for reaching the intended usable state of May 31, 2028, December 31, 2026, and May 31, 2029 respectively. Furthermore, according to Desay SV's announcement dated August 14, 2026 regarding the use of partially idle raised funds to temporarily supplement working capital, as of July 31, 2026, the cumulative investment from the previous private placement proceeds was 1.582 billion yuan. During the same period, the balance in Desay SV's special account for raised funds was 73.6922 million yuan (including interest income), with an additional 2.78 billion yuan of raised funds used for wealth management products.

In other words, by the end of July 2026, 2.78 billion yuan of raised funds had been allocated to wealth management products.

4.3 Asset-liability ratio declining with over 800 million yuan in cash; cumulative dividends exceed 1.8 billion yuan over three years

Based on the 2024-2025 annual reports and the 2026 semi-annual report, at the end of 2023-2025 and June 2026, Desay SV's total assets were 18.014 billion yuan, 21.483 billion yuan, 29.845 billion yuan, and 30.478 billion yuan respectively, while total liabilities were 9.954 billion yuan, 11.718 billion yuan, 14.283 billion yuan, and 14.249 billion yuan. Calculations show that during these periods, Desay SV's asset-liability ratios were 55.26%, 54.54%, 47.86%, and 46.75%, showing a declining trend. On the other hand, at the end of each period from 2023-2025 and the first half of 2026, Desay SV's short-term borrowings were 201 million yuan, 279 million yuan, 687 million yuan, and 346 million yuan respectively. Long-term borrowings were 771 million yuan, 219 million yuan, 255 million yuan, and 249 million yuan, while non-current liabilities due within one year were 64 million yuan, 638 million yuan, 333 million yuan, and 37 million yuan. Thus, the combined total of short-term and long-term borrowings and non-current liabilities due within one year was 1.036 billion yuan, 1.137 billion yuan, 1.275 billion yuan, and 632 million yuan during the same periods. In terms of cash, at the end of 2023-2025 and the first half of 2026, Desay SV's monetary funds were 1.276 billion yuan, 775 million yuan, 1.448 billion yuan, and 895 million yuan respectively.

From 2023-2025 and January-June 2026, Desay SV's net cash flow from operating activities was 1.141 billion yuan, 1.494 billion yuan, 2.884 billion yuan, and 1.063 billion yuan. During the same periods, its cash and cash equivalents at period-end were 1.133 billion yuan, 721 million yuan, 1.416 billion yuan, and 845 million yuan. Meanwhile, from 2023 to 2025, Desay SV's cash dividends (including tax) were 466 million yuan, 666 million yuan, and 742 million yuan respectively, totaling 1.875 billion yuan in cumulative dividends over the three years. From the above, it is clear that Desay SV's stated purposes for this Hong Kong listing application include capacity expansion, working capital, and general corporate purposes. However, in 2024-2025, capacity utilization for smart cockpit products declined. On the other side of fundraising to supplement working capital, Desay SV raised over 4 billion yuan through a private placement in October 2025, of which 2.78 billion yuan had been used for wealth management products by the end of July 2026. Moreover, over the past three years, Desay SV's asset-liability ratio has been declining, cumulative dividends exceed 1.8 billion yuan, and as of the end of June 2026, it held over 800 million yuan in monetary funds.

V. Conclusion

In summary, as a mobile intelligence technology platform company, Desay SV's revenue mainly comes from the three businesses of smart cockpit, intelligent driving, and connected services, with the combined share of smart cockpit and intelligent driving exceeding 90%. Looking at its performance, in 2024-2025 and the first half of 2026, Desay SV's revenue and attributable net profit both maintained growth. However, its gross margin has declined over the past two years, with both top revenue-generating products seeing margin declines in 2025. Notably, Desay SV claims to be expanding into emerging smart markets such as unmanned delivery vehicles to create a second growth curve, yet as of the end of 2025, its "Chuanxing Zhiyuan" unmanned delivery vehicle brand had not generated any revenue. Additionally, from 2023 to 2025, Desay SV's R&D investment ratio was below the industry average. During the reporting period, while Desay SV's top five customers accounted for over 50% of revenue, its receivables ratio was higher than the peer average, and inventory had climbed to over 6 billion yuan by the end of June 2026. Furthermore, Desay SV's fundraising purposes for this Hong Kong listing include capacity expansion, working capital, and general corporate purposes, even though smart cockpit capacity utilization declined in 2024-2025. On the other side of its fundraising to supplement working capital, Desay SV's asset-liability ratio has been declining, cash on hand exceeds 800 million yuan, and cumulative dividends over the past three years exceed 1.8 billion yuan.

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