Trunk Technology files for Hong Kong IPO after revenue growth
Trunk Technology (Beijing) Co. Ltd. has filed for a Hong Kong IPO under Chapter 18C, targeting the market for autonomous commercial vehicle solutions. The company reported a 35.6% revenue increase to 345 million yuan last year, with its trunk pilot segment contributing 62.5% of total revenue. Despite growth, Trunk Technology posted a loss of 171 million yuan, with R&D expenses at 26.3% of revenue.
*this image is generated using AI for illustrative purposes only.
Trunk Technology (Beijing) Co. Ltd., a developer of Level 4 autonomous truck technology, has filed a listing application with the Hong Kong stock exchange under the Chapter 18C framework. The company, which counts Bosch and Nio among its early backers, reported a 35.6% increase in revenue to 345 million yuan last year, driven primarily by its road freight division. Despite the revenue growth, Trunk Technology has remained in the red for the last three years, recording a loss of 171 million yuan in the same period.
The company’s revenue is generated through three main segments: trunk pilot, trunk port, and trunk city. Trunk pilot, the road freight division, is the largest revenue contributor, bringing in 215 million yuan last year, which accounted for 62.5% of the total. This segment designs and sells autonomous driving solutions for highway logistics, covering express delivery, less-than-truckload freight, bulk cargo, and cold chain transport. The average selling price for trunk pilot solutions surged 251% to 6.72 million yuan.
Trunk port, the second-largest segment, generated 127 million yuan, representing 37% of total revenue. This segment provides unmanned transportation solutions for logistics hubs, utilizing smart trucks and robots to operate round-the-clock. While trunk port revenue declined last year, the surge in trunk pilot revenue more than offset the drop, leading to overall revenue growth.
Financial Performance
Trunk Technology’s financials reflect the high costs associated with early-stage technological innovation. Research and development expenses were substantial, equaling 26.3% of revenue last year. High costs related to regulatory compliance, system integration, and customer customization have contributed to the company’s continued losses.
| Segment | Revenue (million yuan) | Percentage of Total |
|---|---|---|
| Trunk Pilot | 215 | 62.5% |
| Trunk Port | 127 | 37% |
| Total | 345 | 100% |
Market Outlook
The company operates in China’s logistics market, which exceeded 360 trillion yuan in social logistics volume last year. Road logistics accounts for over 70% of total freight volume. The market for commercial vehicle autonomous driving solutions in China was valued at 8.5 billion yuan last year and is projected to reach 246.9 billion yuan by 2030, with open-road scenarios expected to comprise 88% of the market.
Falling hardware costs, particularly for autonomous driving computing units (ADCU), are expected to reduce expenses for Trunk Technology. Prices for ADCU core chipsets have already declined by 5.1% from their peak. The company’s peers, Pony AI and WeRide, currently trade at high price-to-sales ratios of 33.6 times and 21 times, respectively, indicating strong investor interest in the sector despite current revenue levels.
How will Trunk Technology leverage its Hong Kong listing to accelerate its path to profitability given its history of losses?
What impact will the projected decline in ADCU costs have on Trunk Technology's margins and pricing strategy over the next few years?
How might regulatory changes in China affect the adoption of Level 4 autonomous trucking technology in the open-road market?
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