In a remarkable stride towards growth and recognition, Beijing Saimu Technology Co., Ltd(hereinafter referred to as Saimu Technology) is making its fourth attempt to secure a listing on the Hong Kong Stock Exchange, bolstering its position in the dynamic market of Intelligent Connected Vehicles (ICV) simulation testing technologiesAs of December 5th, Saimu Technology has submitted its application for a main board IPO, further indicating its steadfast commitment to growth despite previous setbacks in the process.

Saimu Technology has been on its IPO journey for quite some time, having previously made three unsuccessful attempts in December 2022, October 2023, and May 2023. Each effort has served as a stepping stone, as the company navigates through the requirements and regulations of the Hong Kong Stock Exchange, reflecting its resilience in a fiercely competitive market.

One of the notable aspects of Saimu Technology's strategy is its collaboration with industry giant Huawei

This partnership has positioned Saimu Technology as one of the few domestic providers capable of integrating self-developed safety analysis tools with simulation testing tools, highlighting an innovative approach in a burgeoning fieldMoreover, Huawei's Hubble investment arm significantly boosted Saimu Technology's financial standing with a multi-million dollar investment, underscoring confidence in the latter's potential for growth and innovation.

Interestingly, in the year leading up to Huawei Hubble's investment, Saimu Technology was valued at approximately 105 million yuanHowever, post-investment, this figure skyrocketed to 1 billion yuan, showcasing the marked impact of financial backing from reputable entitiesThe funding resulted in a steep valuation surge, marking a pivotal moment for the company that began its journey in 2014.

Originally founded as Beijing Limo Technology Co., Ltd., the company was focused on identifying vulnerabilities in mobile applications

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However, after identifying the potential in the ICV testing industry, the management underwent a significant shift in strategy to align with this promising sectorThis change was largely attributed to the foresight of MsMa Lei from the SAI DI Group, which oversees the ICV testing industry in China.

Enter Hu Dalin, a pivotal figure in the company’s new directionWith an educational background in Ammunition Engineering and Explosive Technology from Beijing Institute of Technology, Hu brought a wealth of experience in industrial software developmentHis journey began at Beijing Yuanxinxing Technology Co., Ltdin 2010, and rose through the ranks to become the Executive Director and General Manager, showcasing his leadership and expertise in the tech industry.

As the management team shifted its focus in mid-2017, Hu led the team in the development of what would become Saimu Technology’s SimPro tool

Their efforts bore fruit in 2018 when Saimu Technology was officially rebrandedThis new identity coincided with the launch of Sim Pro, marking the company's entry into the ICV testing space with simulation testing, verification, and evaluation toolchains.

By 2018, Saimu Technology's prominence was acknowledged as one of the few third-party testing agencies for ICVs in HangzhouThe following years saw the company earning recognitions, including the prestigious ISO 26262 ASIL D functional safety certification for its Sim Pro tool, making it the first globally recognized toolchain in the domain of ICV simulation testingThis milestone set the company apart in a highly specialized market.

2021 was another breakthrough year as Saimu Technology developed its FuSa and SOTIF analysis tool, Safety ProThis positioned the company as one of the few domestic firms that could combine proprietary safety analysis and simulation testing tools, further solidifying its market presence.

According to Frost & Sullivan, Saimu Technology stands as the largest market player in the ICV testing, validation, and evaluation solutions sector, commanding approximately 5.3% of the market share and 5.9% in simulation testing software and platforms respectively in 2023, illustrating its competitive prowess.

The heart of the company’s exceptional performance is largely attributed to Hu Dalin, who wore multiple hats including General Manager from December 2018 to December 2019, and is presently the Chairman of the Board

His leadership has been pivotal in steering Saimu Technology towards extensive operational growth since it transitioned from Limo Technology.

Financially, Saimu Technology has caught the eyes of investors, completing three funding rounds amounting to approximately 297 million yuanTheir trajectory of securing funding steadily increased, especially post-2020, with a significant A round funding of 160 million yuan involving notable investors including Huawei Hubble and CITIC Securities.

Pre-IPO, Hu Dalin and the management team collectively hold a 30.2% stake, with significant ownership among the directors and employees emphasizing a cohesive approach to equity distribution, strategically keeping control within a committed group.

Recent reports showcase that Saimu Technology generates nearly 200 million yuan in annual revenue with a robust gross margin of around 70%. This financial health is complemented by the firm’s ability to attract large clients, with its top clients contributing nearly 30% of its total revenue

However, dependence on a concentrated client base also introduces inherent risks that the company must navigate.

The market for ICV testing, driven by the rapid advances in autonomous driving technology and increased acceptance of smart vehicles in China, has experienced significant growth, elevating the market size from approximately 1.2 billion yuan in 2019 to about 3.3 billion yuan by 2023, with future projections indicating even more expansive growth by 2030.

Saimu Technology’s business model revolves around providing simulation testing software and platforms, alongside a range of ICV-related servicesNotably, its revenues from simulation testing software consistently constitute around 55-57% of its total earnings in recent years, showcasing a steady and solid growth path in its primary service area.

Nevertheless, customer concentration remains a concernFrom 2019 to 2024, revenues from the top five clients represented a staggering 93.4% to 100% of total revenue at different times, indicating potential vulnerabilities in being reliant on a handful of clients.

In terms of financial performance, Saimu Technology reported varying revenues, hitting around 806.6 million yuan in 2019, escalating to nearly 1.76 billion yuan by 2023. However, profitability has seen fluctuations with net profit margins declining progressively from 69.4% in 2019 to approximately 30.4% in 2023, indicating the challenges faced in maintaining profit levels amidst rapid growth and operational expansion.

Looking forward, the company has earmarked IPO proceeds primarily for enhancing its research and development capabilities, ensuring continual innovation in ICV testing solutions, while also aiming for geographic expansion and bolstering its sales and marketing efforts to elevate its market standing further.