High Risks of ‘Geely Dependency’ – How Can Fureitec Break Free from the Dilemma of Revenue Growth Without Profitability?

ZC Asia has learnt that Furetech (Zhejiang) Intelligent Technology Co., Ltd. (hereinafter referred to as ‘Furetech’) has recently updated its Hong Kong IPO application materials. This marks the third attempt following the expiry of its filings in November 2024 and May 2025. The joint sponsors for this offering are CITIC Securities, China International Capital Corporation, Huatai International and HSBC.

Established in 2016, Fureitec positions itself as a provider of high-end driving assistance solutions. The company's operations encompass advanced driver assistance systems (ADAS) and autonomous driving system technologies, delivering comprehensive integrated hardware-software driving assistance solutions.

The company has independently developed the integrated hardware-software intelligent driving platform ODIN, upon which it has built three major solutions: FT Pro, FT Max, and FT Ultra. These respectively support automation levels L0-L1, L2, and L2+ and above.

According to data from CIC(灼识咨询), in terms of revenue from Level 0 to Level 2 (including Level 2+) driving assistance solutions in China for 2024, Furui Tech ranks second among third-party independent suppliers with a market share of 7.2%.

Revenue Growth and Persistent Losses

Furui Tech has maintained rapid revenue growth in recent years. Per its prospectus, the company's revenues for 2022, 2023, 2024, and the first half of 2025 were RMB 328 million, RMB 908 million, RMB 1.283 billion, and RMB 928 million respectively. Revenue in the first half of 2025 surged by 197.5% year-on-year.

However, this robust revenue growth has been accompanied by persistent substantial losses. Over the same period, the company recorded net losses of RMB 855 million, RMB 738 million, RMB 528 million, and RMB 164 million respectively. This indicates that over the three-and-a-half-year reporting period, Fureitec's cumulative losses have reached RMB 2.285 billion.

A key factor contributing to Furui Tech's persistent losses is its persistently high cost structure.

From 2022 to the first half of 2025, the company's procurement costs for raw materials and consumables accounted for 71.5%, 81.7%, 83.4%, and 83.5% of its respective period revenues. In the first half of 2025, this cost reached RMB 775 million, accounting for 96.1% of the cost of sales.

Consequently, the company's gross profit margin has remained persistently low. During the reporting period, Fureitec's gross profit margins stood at 6.2%, 7.3%, 11.2%, and 13.1% respectively. Although showing an upward trend, it still lags significantly behind leading industry players.

Highly Concentrated Customer Risk

One of the most notable risks highlighted in the prospectus is the high concentration of customers, particularly the reliance on Geely Holding Group.

From 2022 to the first half of 2025, Furui Tech's revenue contribution from its top five customers rose from 73.6% to 94.1%. Revenue from its largest single customer accounted for 22%, 43.3%, 59.4%, and 76% respectively.

This largest customer is Geely Holding Group. Since 2019, Furui Tech has been engaged by Geely as a non-exclusive supplier to develop driver assistance products and deploy solutions for its vehicles.

The company's driver assistance products and solutions span multiple automotive brands and models within Geely Holding Group, including Geely, Zeekr, Lotus Sports Cars, Lynk & Co, Geometry, Smart, Geely Commercial Vehicles, and Radar.

Notably, Geely is not only Furui Tech's largest customer but also its primary supplier for 2024 and the first half of 2025, with Furui Tech sourcing chips and other electronic components from Geely.

Compared to the maximum 60-day credit terms offered to other major suppliers, Furui Tech extends Geely a 75-day credit period.

Market Challenges and Competitive Pressures

The intelligent driving solutions sector is fiercely competitive. Although Furui Tech holds a leading market share position, it faces multifaceted challenges.

Compared to industry leaders, Furui Tech possesses limited competitiveness in the L2+ advanced intelligent driving segment. In 2024, its market share in L2+ intelligent driving assistance solutions stood at 8.1%, ranking third.

Furthermore, adjustments to automakers' intelligent vehicle strategies introduce uncertainty for third-party suppliers. Geely Holding Group has proposed a ‘Return to One Geely’ strategy, aiming to reduce costs and enhance efficiency through group synergies.

In its prospectus, Furui Tech projects continued net losses through 2025, primarily due to ongoing business expansion to further consolidate economies of scale, coupled with sustained R&D investment.

Furui Tech's listing journey reveals the complexities underlying its growth narrative. The intelligent driving sector remains in a sustained investment phase, with multiple peers similarly operating at a loss.

For investors, beyond noting Furui Tech's rapid revenue growth and market share gains in recent years, greater attention must be paid to how the company addresses the structural risk of excessive customer dependency and strikes a balance between cost control and maintaining R&D investment.

Disclaimer: The content herein is for reference only and does not constitute any form of investment advice. Should any information contained herein prove inaccurate, incomplete, or potentially misleading, please refer to the company's official announcements. Market risks exist; investment requires caution.