Pateo Connect Revs Up For IPO, Belching Widening Losses And Slumping margins

Pateo Connect Revs Up For IPO, Belching Widening Losses And Slumping margins

Benzinga
April 7, 2025

A mounting flow of red ink and external risks could turn off investors to one of China's leading smart cockpit makers as it drives towards a Hong Kong listing

Key Takeaways:

Pateo Connect has filed for a Hong Kong IPO, reporting its revenue jumped by 70.9% last year as its net loss widened

The smart cockpit maker's gross margin is slipping amid intense competition and its heavy reliance on low-margin domain controllers

China's smart cockpit market is roaring, fueled by a new generation of intelligent cars that are expected to account for 80% of sales this year. At the same time, recent tariffs and other restrictions from the U.S. on Chinese smart cars and related technologies could slow down the industry just as it gains momentum.

Against that backdrop, Chinese smart cockpit maker Pateo Connect Technology (Shanghai) Corp. submitted a new application to list in Hong Kong late last month, hoping its second such attempt would be the charm after a first try last June stalled. Sponsoring the deal are an A-list of Chinese underwriters, including CICC, Guotai Junan International, CMB International, Huatai International and Citic Securities, signaling it's likely to be quite large.

Founded in 2009, Pateo Connect is one of China's few domestic providers of both smart cockpits and smart connectivity solutions. Smart cockpits were its main breadwinner last year, contributing 95.5% of total revenue. At the same time, the company continues to provide OEM customers with solutions from its smaller smart connectivity business, which is also quite stable.

Smart cockpits are an essential component in the automotive industry's smart transformation. Such devices are enabled by ...

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