Zebra Intelligence Files for Hong Kong IPO: Over 1.8 Billion Yuan in Impairment Provisions Last Year Severely Hit Profits, Business Highly Dependent on Alibaba and SAIC

Everyday Economic News Reporter | Cai Ding Everyday Economic News Editor | Wei Weny

On March 18, according to the Hong Kong Stock Exchange official website, Zebra Intelligence Information Technology Co., Ltd. (hereinafter referred to as “Zebra Intelligence”) submitted an IPO application to the HKEX, with Deutsche Bank, China International Capital Corporation, and Guotai Junan International serving as joint sponsors.

As an early entrant in China’s intelligent cockpit solutions field, Zebra Intelligence positions itself in the prospectus as the largest software-centric intelligent cockpit solution provider in China, emphasizing its business philosophy of “software empowering hardware” and its industry position with a full-stack AI architecture.

However, the “Daily Economic News” reporter (hereinafter “the reporter”) reviewed Zebra Intelligence’s prospectus (draft version) and found that beyond technical concepts, the company faces concerns regarding its financials and corporate governance. For example, Zebra Intelligence is expected to incur a loss of about 1.896 billion yuan in 2025, including an impairment loss of approximately 1.841 billion yuan on other intangible assets. The company states that “this impairment mainly relates to intangible assets associated with system-level operating system solutions.”

Meanwhile, in December 2024, Zebra Intelligence executed a voting rights waiver agreement, resulting in Alibaba, its largest shareholder, no longer being included in the consolidated financial statements. However, in actual business operations, Zebra Intelligence’s sales dependence on SAIC Motor and procurement dependence on Alibaba remain highly concentrated, and the company’s net cash used in operating activities has experienced large outflows for three consecutive years. These issues, based on objective data from the prospectus, are key questions that Zebra Intelligence needs to address with the capital market for its HKEX IPO.

Although the prospectus cites data from Zhuoshi Consulting, stating that based on 2024 revenue, Zebra Intelligence is China’s largest software-centric intelligent cockpit solution provider, and ranks first in solution deployment volume, its revenue scale has stagnated over the past three years.

Specifically, during the reporting period of 2023, 2024, and 2025 (hereinafter “the reporting period”), the company’s operating income was approximately 872 million yuan, 824 million yuan, and 861 million yuan, respectively, showing a fluctuating trend. Meanwhile, the company’s losses expanded in 2025. In 2023 and 2024, losses were about 876 million yuan and 847 million yuan, respectively, with a sharp increase to about 1.896 billion yuan in 2025. The direct reason for these huge losses is the recognition of an impairment loss of about 1.841 billion yuan on other intangible assets in 2025.

Source: Zebra Intelligence Prospectus

Zebra Intelligence explains in the prospectus: “With the rapid development of AI, we recognized impairment losses when shifting our business focus. These intangible assets refer to intellectual property rights related to automotive operating systems injected into the company based on a shareholder resolution dated November 2, 2020.”

This is corroborated by changes in revenue structure: the system-level operating system solutions, which are the main revenue pillar of Zebra Intelligence, declined from about 751 million yuan (86.2%) in 2023 to about 687 million yuan (83.4%) in 2024, and further shrank to about 643 million yuan (74.7%) in 2025, showing declines in both absolute amount and proportion.

Source: Zebra Intelligence Prospectus

Zebra Intelligence states that due to increasing competition in the automotive operating system market and its decision to invest more resources in developing AI-driven solutions, the cash-generating capacity of the automotive operating system solutions business may decline.

“In other words, as competition in the automotive operating system market intensifies, compared to our initial valuation in 2020, the growth rate of revenue from system-level operating system solutions may be moderate. Based on this forecast, the recoverable amount of intangible assets is lower than their book value, leading to the recognition of an impairment loss,” Zebra Intelligence added.

The reporter also noted that during a key period when the company announced a comprehensive upgrade to AI-driven business, its R&D expenses significantly declined. Specifically, R&D expenses were about 1.123 billion yuan in 2023, decreased to about 979 million yuan in 2024, and further dropped to about 725 million yuan in 2025, a reduction of approximately 35.4% from 2023.

Source: Zebra Intelligence Prospectus

In terms of corporate governance, Zebra Intelligence conducted a voting rights adjustment before submitting the prospectus. The shareholding structure shows that before the IPO, Alibaba, through entities like Shanghai Saiwei, held about 41.67% of the issued shares, while SAIC Motor held about 32.90%.

Source: Zebra Intelligence Prospectus

The reporter observed that in December 2024, just before Zebra Intelligence prepared for its HKEX IPO application, the two major shareholders reached a significant agreement affecting financial consolidation. Alibaba agreed, and SAIC Motor promised to ensure that Shanghai Saiwei would waive its voting rights attached to approximately 243 million shares. After this transfer of voting rights, Alibaba’s overall voting rights were reduced by about 48.38%. Due to this reduction, Zebra Intelligence was no longer included in Alibaba Group’s consolidated financial statements from December 27, 2024, and was no longer considered an affiliate of Alibaba for financial reporting purposes.

Furthermore, as of the company’s latest filing, Alibaba’s control over voting rights has further decreased to 37.09%.

However, Zebra Intelligence remains deeply embedded in Alibaba’s ecosystem in key areas such as cloud computing resources and map data services. The company has long-term procurement agreements with Alibaba in cloud services, Amap (Gaode Map), and Tmall Genie software licensing. Clearly, the change in voting rights has not substantially altered Zebra Intelligence’s dependence on the major shareholder’s ecosystem for its operations.

Besides issues of formal independence, Zebra Intelligence faces high customer and supplier concentration in actual operations, with overlaps involving the two major shareholders. This heavily internalized cycle directly affects working capital management, leading to continuous large net cash outflows from operating activities.

On the sales side, Zebra Intelligence exhibits extremely high customer concentration. During the reporting period, revenue from the top five customers accounted for 89.9%, 88.6%, and 76.4% of total revenue, respectively. SAIC Motor has remained the largest customer for three consecutive years. Over these three years, Zebra Intelligence provided integrated software solutions and licensing services to SAIC, generating approximately 413 million yuan, 319 million yuan, and 338 million yuan, respectively, accounting for 47.4%, 38.8%, and 39.2% of total revenue in those years. This means nearly 40% of Zebra Intelligence’s revenue depends on SAIC Motor. Any fluctuations in SAIC’s sales or procurement strategies could significantly impact the company’s core business.

Source: Zebra Intelligence Prospectus

On the procurement side, Alibaba is Zebra Intelligence’s largest supplier. During the reporting period, purchases from the top five suppliers accounted for 73.6%, 68.7%, and 56.6% of total procurement. Alibaba has been the largest supplier for three years in a row. Over these years, Zebra Intelligence purchased core services such as cloud computing and mapping from Alibaba, with amounts reaching approximately 281 million yuan, 257 million yuan, and 213 million yuan, representing 58.4%, 50.5%, and 40.7% of total procurement, respectively.

Source: Zebra Intelligence Prospectus

Data shows that SAIC Motor is not only Zebra Intelligence’s largest customer but also one of its top five suppliers in 2023 and 2024; Alibaba, as the largest supplier, is also a customer.

Relying heavily on shareholder ecosystems results in weaker bargaining power within the industry chain, reflected in the continuous deterioration of net cash used in operating activities. During the reporting period, this figure was approximately -417 million yuan, -487 million yuan, and -574 million yuan, with a total net outflow exceeding 1.478 billion yuan over three years.

Source: Zebra Intelligence Prospectus

This is largely due to slow accounts receivable turnover. In 2023, accounts receivable turnover days were 183.3 days, rising to 187.7 days in 2024, and further to 196.7 days in 2025. Nearly 200 days of turnover cycle indicates the company must extend long payment terms to downstream major OEMs, resulting in significant working capital occupation. Under the multiple pressures of massive asset impairments, high customer concentration, and persistent cash outflows, demonstrating sustainable independent business cash flow remains a core challenge for Zebra Intelligence’s IPO.

Source: Zebra Intelligence Prospectus

Regarding the long-term impact of the approximately 1.841 billion yuan impairment on intangible assets, the transfer of Alibaba’s voting rights, and business dependence, the reporter sent interview questions to Zebra Intelligence’s official email on the morning of March 18. As of press time, no response has been received.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Risks are assumed by the user.

Cover image source: Zhu Yu