Baidu-Affiliated "New Truck Startup" Rushing to List on Hong Kong Stock Exchange at Heavy Cost with 3.9 Billion Yuan in Revenue and 1.7 Billion Yuan in Losses over Three and a Half Years

Revenue increases but profit doesn't. How can the business model be made profitable?

Another intelligent driving heavy - truck company is gearing up for a Hong Kong stock market listing, and this time it's from the Baidu ecosystem. On November 6th, Deepway Technology Co., Ltd. (Deepway) submitted a listing application to the Hong Kong Stock Exchange. The joint sponsors are China International Capital Corporation and China Merchants Bank International. Founded in 2020, Deepway is a technology company focusing on new energy heavy trucks and intelligent highway freight solutions. As of now, it has raised a cumulative total of 1.96 billion yuan in financing, with investment institutions such as Baidu, Lionbridge Group, SoftBank China, Weiqiao, and Hefei State - owned Assets standing behind it. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_a8389e86038a4c689c4e03dfda1aeb6e@000000_oswg282853oswg1080oswg730_img_000?x - oss - process = image/format,jpg/interlace,1" > Deepway submits its listing application The prospectus shows that most of Deepway's revenue comes from the sales of new energy heavy trucks. From the delivery of its first new energy heavy truck in 2023 to June 30, 2025, Deepway has cumulatively delivered approximately 6,400 new energy heavy trucks, covering 311 customers. Among them, in the first half of this year, Deepway delivered 2,873 new energy heavy trucks and also had approximately 1,400 trucks on order. As deliveries increase, Deepway's revenue is also growing steadily. In 2023, 2024, and the first half of 2025, DeepWay's revenues were 426 million yuan, 1.969 billion yuan, and 1.506 billion yuan respectively. Despite this, DeepWay is still in a loss - making state. In the first half of this year, the loss was 371 million yuan, an increase of approximately 21.1% compared to the same period last year. With the submission of the application, the new heavy - truck player Deepway is accelerating its listing process and is expected to become the "first intelligent driving heavy - truck stock on the Hong Kong stock market". < h2 > Entering the trillion - dollar market with a "two - stage" breakthrough strategy < / h2 > Wan Jun, the founder and CEO of DeepWay, is a serial entrepreneur. In 2012, he founded Lionbridge Group, a large - scale highway trunk logistics company and one of the largest truck finance enterprises in China. Benefiting from his previous work experience, Wan Jun has a deep understanding of the logistics industry. He once publicly stated that industry practitioners are approaching their limits but still can't make money. The reason is that fuel costs account for the largest proportion, with oil expenses accounting for 40%, followed by labor costs, with wages accounting for 20% - 30%. According to his vision, first replace oil with electricity to save fuel costs, and then use intelligent driving technology to partially replace drivers and reduce labor costs. Ultimately, the goal is to change the cost structure and enable vehicle owners to make money. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_f68f56a8df9a4c9e823a139e54353368@000000_oswg118586oswg1080oswg425_img_000?x - oss - process = image/format,jpg/interlace,1" > The global highway freight market is huge in scale DeepWay's products are also designed based on this concept. The listing application mentions that according to the data from CIC, the global highway freight market is huge in scale, reaching 3.9 trillion US dollars in 2024. However, this industry has long been restricted by three major pain points: high carbon emissions, high total cost of ownership, and safety risks. DeepWay is committed to solving these pain points with electrification and intelligent technologies, and has chosen trunk highway freight, which accounts for more than 50% of the transportation capacity in the highway freight system, as its entry point. Specifically, DeepWay adopts a "two - stage" strategy. In the first stage, it provides a new energy heavy - truck solution based on the concept of forward - looking definition. It re - defines product and technology R & D outside the framework of traditional fuel vehicles to better optimize software, hardware, and components, enabling its products to efficiently and cost - effectively meet the application requirements of electrification and intelligence. In the second stage, on the basis of the large - scale deployment and operation of new energy heavy trucks, DeepWay aims to further improve the overall efficiency of the highway freight industry through intelligent operation and transportation. In DeepWay's view, intelligence is an important core technology to promote the transformation of intelligent freight logistics. To this end, it has launched a series of intelligent solutions such as Tianji · Suihang, Tianji · Yanxing, and Tianji · Duxing. Among them, Tianji · Suihang is an L2 - level combined assisted driving system with functions such as forward collision warning, lane departure warning, automatic emergency braking, automatic comfortable braking, predictive comfortable braking, adaptive cruise control, predictive cruise control, intelligent cruise assistance, intelligent queue control, lane departure suppression, and intelligent energy - saving reminder. Tianji · Suihang has been standard - equipped on all models of the new - generation Deepway Xingchen II and Deepway Xingtu. As of June 30, 2025, more than 2,000 vehicles equipped with the Tianji · Suihang system have been delivered. The Tianji · Yanxing intelligent platooning transportation system realizes the mode of "a manned lead vehicle and unmanned following vehicles", which is suitable for the large - scale transportation of bulk goods on fixed routes, such as ports, mines, and point - to - point trunk lines. Currently, DeepWay has completed the development and verification of core functions and is conducting user adaptation tests. Tianji · Duxing is a single - vehicle intelligent unmanned driving system, which is undergoing continuous testing. It has obtained test licenses in Beijing, Tianjin, Hefei and other places and is conducting regular tests on the Beijing - Tianjin - Tanggu Expressway and Hefei urban roads. In addition, DeepWay has also developed an intelligent operation solution called Deepway · Tianshu. This solution includes an Internet of Vehicles system with multi - dimensional vehicle control capabilities and large - scale data processing capabilities. On this basis, it has built an intelligent cockpit for the logistics industry and a fleet management platform with intelligent auxiliary functions. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_6f007f28d69b43d1951cafa3889a7cdd@000000_oswg148486oswg1080oswg632_img_000?x - oss - process = image/format,jpg/interlace,1" > Deepway's solutions Based on the above - mentioned series of products, Deepway has gained a certain market share. Its customers are mainly logistics companies, port operators, and battery leasing companies. According to the data from CIC, in terms of sales volume in 2024, Deepway ranks tenth in the global new energy heavy - truck market, accounting for 2.7% of the market share. In the global new energy heavy - truck market with forward - looking definition, Deepway ranks first in terms of 2024 sales volume. < h2 > Increasing revenue but not profit, facing multiple risks < / h2 > Naturally, the more trucks are sold, the more money is earned. The listing application shows that in 2022, 2023, 2024, and the first half of 2025, Deepway's revenues were 0, 426 million yuan, 1.969 billion yuan, and 1.506 billion yuan respectively. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_df27558f9e5c4121a04909f7e413382a@000000_oswg431421oswg1080oswg1050_img_000?x - oss - process = image/format,jpg/interlace,1" > Deepway's financial situation From the perspective of revenue structure, the sales revenue of new energy heavy trucks accounts for the vast majority of the total revenue. In 2023, 2024, and the first half of 2025, the proportion exceeded 99%, while the proportion of parts sales was less than 1%. The intelligent freight solutions are provided for free and have not contributed to the revenue yet. In terms of R & D investment, DeepWay has also been increasing year by year. In 2022, 2023, 2024, and the first half of 2025, the R & D expenses were 231 million yuan, 352 million yuan, 365 million yuan, and 179 million yuan respectively. The gross profit margin shows an increasing trend. In 2023, 2024, and the first half of 2025, DeepWay's gross profit margins were 0.4%, 0.5%, and 2.9% respectively. However, like many startup companies, Deepway also faces many challenges. Firstly, it is still far from achieving profitability. As the revenue grows, Deepway's losses are also increasing. During the same period, the losses were 267 million yuan, 389 million yuan, 675 million yuan, and 371 million yuan respectively. The cumulative loss in three and a half years was 1.702 billion yuan, showing a situation of "increasing revenue but not profit". According to the listing application, the funds are mainly used for core technology R & D, factory expansion, strengthening the sales network, etc. Secondly, the customer concentration is high. According to the listing application, in 2024, Deepway's revenue from the top five customers reached 999 million yuan, accounting for 50.7% of the total revenue. Among them, the revenue from the first - largest customer was 505 million yuan, accounting for 25.7%. In the first half of 2025, the revenue from the top five customers still accounted for 51.4%, and the concentration risk has not improved. Thirdly, there is a situation of "overlapping customers and suppliers". The listing application shows that some of Deepway's customers also serve as its suppliers. One of the top five customers is also one of its top five suppliers. Specifically, Customer A (a subsidiary of Supplier A) purchases batteries from Deepway for battery rental to end - users, while Supplier A supplies batteries to Deepway for its new energy heavy trucks. Fourthly, there is a single - supply chain risk. In 2024, Deepway's procurement amount from the top five suppliers accounted for 92.3% of the total procurement. The procurement amount from the first - largest supplier was 2.23 billion yuan, accounting for 61%. The core suppliers include CATL, a battery supplier, and Jianghuai Automobile, a vehicle customization partner. The highly concentrated supply chain leads to weak bargaining power. If the core suppliers cut off the supply or raise the prices, it will directly affect production continuity and cost control. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_2d0a21f106d1459bb40d56384148ad25@000000_oswg315342oswg1080oswg746_img_000?x - oss - process = image/format,jpg/interlace,1" > Deepway has a high asset - liability ratio Fifthly, the asset - liability ratio is high. In 2022, 2023, 2024, and the first half of 2025, its total assets were 508 million yuan, 1.348 billion yuan, 2.556 billion yuan, and 3.92 billion yuan respectively, while the company's total liabilities during the same period were 691 million yuan, 1.92 billion yuan, 3.804 billion yuan, and 5.539 billion yuan respectively. This means that during the reporting period, Deepway's asset - liability ratios were 136%, 142.43%, 148.83%, and 141.3% respectively, always higher than 100%. In addition, the listing application also shows that during the reporting period, Deepway's trade and other receivables increased from 39.4 million yuan at the end of 2022 to 1.415 billion yuan at the end of the first half of this year. Deepway said, "This is mainly due to the rapid growth in the sales of new energy heavy trucks. However, as the customer base continues to expand, the credit risk we face may increase." < h2 > The choice after raising 1.96 billion yuan in five years: listing for survival < / h2 > DeepWay, founded in 2020, is a joint - venture company jointly established by Baidu and Lionbridge, a commercial vehicle logistics company. < img data - img - size - val = "" src = "https://img.36krcdn.com/hsossms/20251110/v2_51b716fb15274aa681efe2fa77a1a56f@000000_oswg418368oswg1080oswg945_img_000?x - oss - process = image/format,jpg/interlace,1" > Deepway's equity structure From the equity structure, it can be seen that Wan Jun, Shanghai Junwei, Beijing Chengyue, and the employee incentive platform form the single largest shareholder group of DeepWay, holding approximately 26.22% of DeepWay's equity. Among them, Wan Jun holds 4.68% of the equity, while Baidu holds 17.28% of DeepWay's equity and is an important strategic shareholder of the company. Baidu and DeepWay, or rather Wan Jun, have a long - standing relationship. As early as 2018, when Baidu was seeking to implement autonomous driving technology in the commercial vehicle scenario, it joined hands with Sunshine Ronghui Capital to lead a 1 - billion - yuan strategic investment in Lionbridge. In 2020, Baidu entered the market with capital again and joined hands with Wan Jun and Lionbridge to establish DeepWay in Beijing. < /

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With 3.9 billion yuan in revenue and 1.7 billion yuan in losses over three and a half years, the "new truck startup" affiliated with Baidu is rushing to list on the Hong Kong Stock Exchange at a heavy cost.