Recently, Lantao Auto submitted its prospectus to the Hong Kong Stock Exchange, planning to go public through "equity distribution + absorption merger" without raising new funds.

On August 22, DONGFENG GROUP announced that its subsidiary Lantao Auto would list on the Hong Kong stock market through introduction, with DONGFENG GROUP simultaneously completing privatization and delisting. From announcing the Hong Kong listing plan to formal filing, only over a month has passed.

After several years of losses, Lantao Auto showed significant sales growth in the first seven months of this year and temporarily achieved profitability. Meanwhile, with a 1 billion yuan capital injection from its major shareholder, the debt-to-asset ratio also declined after consecutive increases.

However, due to the low base, Lantao Auto's average monthly sales volume just reached 10,000 units after substantial growth, and the growth rate has significantly slowed. Particularly, the newly launched Lantao FREE+, the sales performance to date has been notably below previous expectations.

More importantly, Lantao Auto's R&D investment ratio continues to decline, dropping to only 4% in the first seven months of this year, significantly lower than comparable companies like Leapmotor. Meanwhile, the marketing expense ratio approaches 20%, which is significantly high. Under this "heavy marketing, light R&D" approach, the long-term competitiveness of products remains questionable.

DONGFENG GROUP stated that Lantao Auto's listing through introduction will help achieve value revaluation of the company's H shares. However, whether Lantao can gain market recognition after listing remains to be observed.

**Staged Improvement in Pre-IPO Financial Metrics; Significant Sales Growth Deceleration and Underperforming New Models**

On October 2, during the National Day holiday, Lantao Auto officially submitted its prospectus to the Hong Kong Stock Exchange, planning to list in Hong Kong through introduction. This transaction adopts the "equity distribution + absorption merger" model without fundraising.

Notably, this filing comes only over a month after announcing the Hong Kong listing plan, making Lantao Auto's listing process remarkably "lightning-fast."

According to the prospectus, from 2022 to 2024, Lantao Auto achieved revenues of 6.052 billion, 12.749 billion, and 19.361 billion yuan respectively; net profits were -1.538 billion yuan, -1.496 billion yuan, and -0.91 billion yuan respectively. In the first seven months of 2025, the company's revenue reached 15.782 billion yuan, up 90.2% year-on-year, with net profit of 434 million yuan, achieving staged profitability.

Additionally, with a 1 billion yuan capital injection from related "Dongfeng" companies, Lantao Auto's debt-to-asset ratio declined from a high of 85% to approximately 67% by the end of July 2025.

In the first three quarters of 2025, Lantao cumulatively sold 97,000 new vehicles, up 84.6% year-on-year, which was an important factor in the company's performance improvement.

However, due to the low base, Lantao Auto's average monthly sales volume just reached 10,000 units after substantial growth. In September this year, Lantao Auto sold 15,224 units, up only 12.7% year-on-year, showing significantly slowed growth.

From the perspective of specific models, Lantao FREE+ is positioned as a mid-to-large extended-range SUV. Pre-sales began on June 24 this year, with official launch on July 12, and company executives had high expectations for this model.

Lantao's Vice President of Sales Zeng Qinglin publicly stated, "From Lantao FREE+'s product strength perspective, we have the capability to create a hit product. Lantao's sales have doubled annually in recent years. Although the monthly sales target of 20,000+ is very challenging, we remain very confident in this product."

However, in the month delivery began, although Lantao FREE+ sales grew in July, it still fell short of 5,000 units. August sales reached 5,239 units with noticeably slowed month-on-month growth, significantly below previous expectations.

Additionally, the main model Lantao Dreamer saw sales decline in August, and performance after the new model's September launch remains to be observed.

**R&D Investment at 4%, Marketing Expense Ratio Near 20%: "Heavy Marketing, Light R&D" Significantly Different from Peers**

Lantao's underperforming new model sales may be somewhat related to insufficient product competitiveness.

The prospectus shows that from 2022 to 2024, Lantao Auto's R&D spending was 334 million, 672 million, and 815 million yuan, with R&D investment accounting for 5.5%, 5.3%, and 4.2% of revenue respectively. In the first seven months of this year, Lantao's R&D spending was 637 million yuan, with the R&D investment ratio further declining to 4.0%, significantly lower than comparable companies like Leapmotor.

Meanwhile, Lantao Auto's marketing expenses in recent three years were as high as 1.841 billion, 2.862 billion, and 3.751 billion yuan respectively, with 2.646 billion yuan in the first seven months of this year. The marketing expense ratio has long been around 20%, far higher than comparable companies.

Under this "heavy marketing, light R&D" approach, Lantao Auto's product competitiveness has been questioned by the market.

Affected by factors including the automotive industry's new energy transformation and intensified market competition, DONGFENG GROUP's profits plummeted, with overall performance falling short of expectations. DONGFENG GROUP also acknowledged that "before the merger completion, affected by multiple factors including intensified industry competition, the company's H share price has been undervalued for a long time, basically losing its financing function as Dongfeng's H share listing platform."

DONGFENG GROUP stated that Lantao Auto's listing through introduction will help achieve value revaluation of the company's H shares.

However, whether Lantao Auto's valuation can gain full market recognition after listing on the Hong Kong stock market appears to remain questionable at present.