Ecarx Technology raises up to HK$2.5 billion in Hong Kong IPO despite nearly RMB4.9 billion three-year loss

Ecarx Technology (1256.HK) is scheduled to list on the Hong Kong Stock Exchange’s Main Board on October 9 under its IPO plan. The global offering comprises approximately 1.57 billion H shares, priced at HK$1.48 to HK$1.59 per share, with proceeds of about HK$2.324 billion to HK$2.497 billion. This means the company could raise up to approximately HK$2.5 billion, excluding any over-allotment option.[Editor to add: final offer price, allotment results and first-day performance]

According to the prospectus, the Hong Kong public offering accounts for 10 per cent of the total. Each board lot comprises 2,000 shares, with an entry cost of about HK$3,212. The company may grant an over-allotment option of up to 15 per cent of the offering, but there will be no stabilisation manager. Reports said that as of 3.15pm on October 5, margin financing applications for the public offering stood at about HK$1.37 billion, representing an oversubscription of approximately 4.5 times.

Cornerstone investors subscribe for more than HK$1.1 billion

Nine cornerstone investors have committed to subscribe for a combined HK$1.161 billion, equivalent to about 45 per cent to 50 per cent of the base offering. They include:

• Yitang Shenghai Fund: HK$348 million
• Hefei Construction Investment: HK$173 million
• Haiyao Industrial, a wholly owned subsidiary of Tongfu Microelectronics (002156.SZ, A shares): HK$155 million
• CITIC Asset Management (Hong Kong): HK$100 million
• Qizhong International, indirectly wholly owned by China Resources Microelectronics (688352.SH, A shares), Delin Resources and Orix, among others

The joint sponsors are CITIC Securities (Hong Kong) and China Securities International.

Business: chip design based on the RISC-V architecture

Founded in September 2019, Ecarx Technology was established by Wang Dongsheng, former chairman of BOE. The company uses the open-source RISC-V architecture and operates under a fabless model. It focuses on the research, development and design of chips, chipsets, boards and related software, while outsourcing wafer manufacturing, packaging and testing.

Its business is divided into two main segments:

• Smart terminal chips: Mainly human-machine interaction chips, including display driver and touchscreen chips, used in televisions, monitors, mobile phones and watches.
• Interconnect and computing chips: Used in automobiles, robots and industrial applications.

Other sources of revenue include IP licensing and chip design services. According to Frost & Sullivan data, based on revenue in 2025, the company was China’s largest domestic smart-terminal human-machine interaction chip provider and the country’s third-largest domestic RISC-V main-control chip provider.

Financials: revenue grows, but losses continue

• Revenue reached RMB2.431 billion in 2025, equivalent to about HK$2.8 billion, representing a compound annual growth rate of approximately 17.8 per cent over three years.
• The company recorded a loss of RMB1.516 billion in the same year, or about HK$1.8 billion. Its cumulative loss over the three-year period was approximately RMB4.9 billion, or about HK$5.7 billion.
• First-quarter revenue increased 18.4 per cent year on year.
• Gross margin rose from 15.4 per cent to 17.7 per cent and then to 18.6 per cent.
• Net cash flow from operating activities was negative from 2023 to 2025, at RMB1.251 billion, RMB781 million and RMB1.171 billion respectively. It turned positive in the first quarter of this year, with a net inflow of RMB171 million.
• The company said in its prospectus that it expected to continue recording net losses for some time in the future.
• The company has adopted a strategy of trading price for volume to capture market share, which is one of the reasons for its revenue growth.

Computing-chip business accelerates, but customer concentration remains high

Revenue from the computing-chip and solutions business rose from RMB375,000 in 2023 to RMB320 million in 2025, and reached RMB223 million in the first quarter of this year, accounting for about 45 per cent of first-quarter revenue.

The prospectus also disclosed that the company remains highly dependent on a single customer. Reports said revenue from its largest customer had fallen from 80 per cent to about 40 per cent.

Use of proceeds

Third attempt to list

This is the company’s third filing for a Hong Kong listing. Its previous applications were submitted on May 30, 2025 and January 30, 2026, while the latest was filed on July 31, 2026. The company passed its listing hearing on September 21.

Ecarx Technology’s group company Ecarx Materials, also known as Xi’an Ecarx, listed on the Shanghai Stock Exchange’s STAR Market in October 2025. It issued 537.8 million shares and raised RMB4.636 billion, equivalent to about HK$5.4 billion.