The debut of General Motors-backed autonomous driving company Momenta on the Hong Kong stock exchange was lackluster, despite exceptionally strong investor demand during the subscription period. Like most of its industry peers, Momenta is not yet profitable.

General Motors-invested autonomous driving firm Momenta has raised $751 million through its Hong Kong IPO, giving the company a valuation of approximately $9 billion. The stock's subdued first-day performance reflects broader market skepticism about the profitability timeline for the autonomous vehicle sector.

The Chinese self-driving technology company priced its shares at HK$303.80 (equivalent to US$38.74). On its first day of trading, the stock gained a modest 2.8%, entering a market crowded with new listings. Despite the tepid debut, investor appetite was robust. The retail portion of the offering was oversubscribed by 413.6 times, while the institutional placement was oversubscribed by 20.3 times.

Key Points of the Offering

Headquartered in Suzhou, Jiangsu province, Momenta is part of a growing trend of autonomous driving companies choosing to list in Hong Kong to access funding and connect with Asian capital markets. This move follows similar paths taken by peers like Pony.ai (stock code PONY, down 6.00%) and WeRide (stock code WRD, down 3.55%), which conducted secondary listings in Hong Kong last year after their U.S. debuts. Year-to-date, their Hong Kong-listed shares have fallen 56% and 38%, respectively, highlighting persistent investor concerns over the pace of commercialization and profitability in the sector.

Financial Performance and Use of Proceeds

In line with the vast majority of companies in the autonomous driving space, Momenta is not profitable. The company's revenue grew by 83% last year, but its net loss widened from 3.21 billion yuan to 3.46 billion yuan (approximately $472.5 million). The company plans to allocate about 60% of the IPO net proceeds to research and development to advance its core autonomous driving technologies. The remaining 20% of the funds will be directed toward the commercial deployment and scaling of its robotaxi business.

Business Operations and Partnerships

Founded in 2016, Momenta develops full-stack autonomous driving systems for passenger vehicles and robotaxis. The company has established significant partnerships, including a collaboration with ride-hailing giant Uber to deploy robotaxis in Munich. It is also working with Mercedes-Benz Group on an unmanned taxi project in Abu Dhabi and has teamed up with Grab to expand its robotaxi business in Southeast Asia. Its automotive clients and partners include major manufacturers such as Toyota, BYD, and SAIC Motor.