NEW VISION CO initiated its global share offering on March 16 and is scheduled to commence trading on the Hong Kong Stock Exchange on March 24. The price range for the offering is set at HK$42 to HK$48 per share, with approximately 16.23 million shares offered, corresponding to a base issue size of HK$680 million to HK$780 million. As the second-ranked supplier in China's automotive HUD market, while NEW VISION CO has achieved revenue growth by capitalizing on the smart vehicle trend, its fundamental issues—including persistent losses, tight cash flow, and high customer concentration—stand in stark contrast to its lofty valuation, which reflects a price-to-sales ratio of over 8 times. Notably, the offering lacks an over-allotment option (greenshoe mechanism). The cornerstone investors' subscription level is low and their backgrounds are homogeneous. Combined with the characteristics of a small market capitalization and a large proportional issuance, the stock's price stability post-listing faces severe challenges in the absence of supporting funds.
Losses Widened in 2025; Automakers May Further Compress Profit Margins Amid Intensifying Competition NEW VISION CO specializes in providing W-HUD and AR-HUD solutions to automobile manufacturers. Through early market entry and a cost-performance advantage, it has secured a position in China's automotive HUD market. Based on 2024 revenue, the company held a market share of 16.2%, ranking second. However, behind this prominent industry standing lie significant operational difficulties.
The company's revenue growth has shown a pattern of starting strong but fading quickly. From 2022 to 2024, operating revenues were RMB 210 million, RMB 550 million, and RMB 580 million, respectively. Revenue surged by 156.6% year-over-year in 2023, but growth momentum weakened sharply thereafter. The growth rate plummeted to 5.8% in 2024, and for the first three quarters of 2025, year-over-year growth was only 11.7%, indicating clearly faltering growth.
Regarding profitability, the company remains deeply unprofitable. Net losses for 2022 to 2024 were RMB 260 million, RMB 180 million, and RMB 140 million, respectively, accumulating to a total loss of RMB 580 million over three years. The net loss for the first three quarters of 2025 expanded sharply to RMB 350 million, a 169.2% increase compared to the same period last year.
Although part of the losses were influenced by fair value changes of financial liabilities like preferred shares, the core loss excluding these non-recurring items is also concerning. Adjusted net losses attributable to owners for 2022 to 2024 were RMB 80 million, RMB 20 million, and RMB 20 million, respectively. In the first three quarters of 2025, the adjusted loss widened significantly to RMB 40 million, a substantial increase of 381.8% year-over-year. This indicates that the profitability of its core operations has not improved but is instead deteriorating at an accelerating pace.
Concerning cash flow, the company's ability to generate cash internally is severely lacking. Net cash flow from operating activities was negative in 2022, 2023, and the first three quarters of 2025, at RMB -140 million, RMB -120 million, and RMB -50 million, respectively. A net inflow of RMB 30 million was recorded only in 2024.
The root cause of the company's situation of increasing revenue without increasing profit lies in its lack of pricing power, stemming from excessively high customer concentration. In the first three quarters of 2025, the top five customers contributed 83.1% of revenue, putting the company in a weak negotiating position against downstream automakers. Currently, the automotive industry faces immense cost-reduction pressures and fierce price wars. To maintain market share, the company is forced to passively accept price reduction demands from customers.
This is directly reflected in the declining average selling price of its core W-HUD product, which fell from RMB 970.9 in 2022 to RMB 837.1 in the first three quarters of 2025. Furthermore, the gross profit margin dropped sharply from 29.6% in 2024 to 18.5% in the first three quarters of 2025. With profit margins being continuously eroded, a near-term turnaround in profitability appears challenging.
High Trailing P/S Ratio Despite Deep Losses; Small Market Cap Listing Warrants Caution Over Volatility Risks Valuation presents another prominent contradiction in this IPO. Despite sustained losses, the company's implied valuation at the offering price is significantly higher than that of profitable industry leaders.
Based on the offering price range, the company's post-listing market capitalization would be approximately HK$5.2 billion to HK$5.9 billion. At the lower end of the range, this implies a trailing price-to-sales ratio of 8.3 times. In contrast, Huayang Group, the profitable industry leader ranked first, currently trades at a price-to-sales ratio of only about 1.3 times. As the unprofitable second-ranked player, NEW VISION CO's valuation substantially exceeds that of the profitable market leader, highlighting valuation bubble risks due to the lack of fundamental support.
Against the backdrop of weak fundamentals and a high valuation, the structure of this IPO further amplifies investment risks.
The company's post-listing market capitalization of HK$5.2 billion to HK$5.9 billion classifies it as a typical small-cap stock. However, the offering size (HK$680-780 million) represents a high proportion of its market cap. Historically in the Hong Kong market, small-cap stocks, due to their small float and weak capacity to absorb capital, often experience high volatility after listing.
This IPO has secured only two cornerstone investors, Incapital Yihao and Hong Kong High-Tech, with a combined subscription of approximately HK$110 million. Based on the lower end of the offering price range, this represents only about 16.1% of the base offering size, a notably low subscription ratio compared to recent listings. Crucially, both investors are funds associated with the Beijing municipal government and have connections with the company's existing shareholders, constituting non-market-driven "friend and family" orders. The absence of influential long-term foreign institutional or industrial investors among the cornerstone investors suggests the company failed to gain sufficient endorsement from mainstream institutional investors during its preliminary marketing.
Furthermore, the offering does not include an over-allotment option (greenshoe mechanism). This arrangement typically indicates that the issuer did not receive sufficient institutional orders during the bookbuilding process, leading to the abandonment of the greenshoe. Consequently, if the stock faces selling pressure early in its listing, there will be no stabilizing fund to support the price. Price stability will rely entirely on the natural balance of supply and demand in the secondary market.
Therefore, NEW VISION CO's post-listing share price performance is likely to be highly dependent on whether there are funds actively supporting it in the secondary market. If supportive funds are present, the price might be sustained or even subject to speculation in the short term. In the absence of such arrangements, the price could decline rapidly due to a lack of buying interest.
Recently, the Hong Kong Securities and Futures Commission has initiated inspections targeting abnormal trading activities in the market, which may affect the willingness of some funds to engage in such operations. If any potential price stabilization plans the company might have had become difficult to execute due to the changing regulatory environment, the stock would be listing without any support, significantly increasing its downside risk.