From Banma Network Technology Co., Ltd.'s IPO prospectus, we can observe a complex landscape in business development and financial performance, presenting certain risks. Despite the company's established position in the intelligent cockpit solutions market, expanding losses and declining revenue warrant investor attention.

**Core Business and Commercial Model**

**Focusing on Intelligent Cockpits, Building an Ecosystem Model**

Banma Network Technology Co., Ltd. positions itself as a global pioneer and leader in intelligent cockpit solutions, adhering to the philosophy that software brings hardware to life, focusing on the cockpit as the primary interface for human-vehicle interaction. Leveraging its proprietary automotive operating system and full-stack Yuanshen AI architecture, the company provides comprehensive, one-stop intelligent solutions for automotive OEMs, covering system-level operating system solutions, AI full-stack end-to-end solutions, and in-vehicle platform services, delivering intelligent, highly interactive, and human-centric in-car experiences. Its business model is built on three core pillars: proprietary automotive operating system, full-stack AI capabilities, and an expanding network of content and service providers, creating a mutually beneficial ecosystem.

**Financial Data Analysis**

**Revenue Decline, Multiple Factors Impede Growth**

Overall Trend: From 2022 to 2024, the company's operating revenue was RMB 805 million, RMB 872 million, and RMB 824 million respectively. 2023 showed 8.3% growth compared to 2022, while 2024 declined 5.5% compared to 2023. Q1 2025 operating revenue was RMB 136 million, representing a 19.8% decrease compared to Q1 2024.

Growth Drivers: Growth was driven by increased deployment of intelligent cockpit solutions, rising from 835,000 units in 2022 to 2.334 million units in 2024, achieving a compound annual growth rate of 67.2%. The decline in 2024 and Q1 2025 may be related to major OEM customers undergoing vehicle platform transformation, internal approval processes, and contract signing delays.

| Year | Operating Revenue (RMB Million) | YoY Change | |------|--------------------------------|------------| | 2022 | 805.427 | - | | 2023 | 871.894 | 8.3% | | 2024 | 823.787 | -5.5% | | Q1 2024 (Unaudited) | 168.486 | - | | Q1 2025 | 135.713 | -19.8% |

**Expanding Losses, Challenging Path to Profitability**

Persistent Losses: From 2022 to 2024, the company recorded annual losses of RMB 878 million, RMB 876 million, and RMB 847 million respectively. For the three months ended March 31, 2025, losses reached RMB 1.582 billion, representing more than a 7-fold increase compared to RMB 204 million in the same period of 2024.

Loss Attribution: Historical losses are primarily attributed to substantial upfront investments in foundational technologies, including R&D of proprietary automotive operating systems and full-stack artificial intelligence capabilities; strategic pricing adopted to accelerate market adoption and secure design wins, trading lower profit margins for market share; certain new businesses like in-vehicle platform services remaining in early commercialization stages, accepting short-term losses for long-term scalability and margin improvements.

| Year | Net Profit (RMB Million) | |------|--------------------------| | 2022 | -878.188 | | 2023 | -876.157 | | 2024 | -847.398 | | Q1 2025 (Unaudited) | -1,582.331 |

**Gross Margin Fluctuation, Significant Market Competition Impact**

Value Fluctuations: Gross margins for 2022-2024 were 53.9%, 46.4%, and 38.9% respectively. Q1 2025 gross margin was 38.9%, compared to 40.1% in Q1 2024, showing an overall declining trend.

Influencing Factors: The decline in gross margins may be related to strategic pricing strategies, changes in business cost structure, and market competition. As market competition intensifies, the company may reduce product prices to secure more orders, while R&D investments and other costs remain high, leading to margin compression.

| Year | Gross Margin | |------|-------------| | 2022 | 53.9% | | 2023 | 46.4% | | 2024 | 38.9% | | Q1 2025 | 38.9% | | Q1 2024 | 40.1% |

**Negative Net Margin, Profitability Needs Improvement**

Persistently Negative: Due to continuous losses, the company's net margins were negative for 2022-2024 and Q1 2025, reflecting insufficient profitability during the reporting period.

**Revenue Mix Changes, Significant Growth in Some Segments**

System-Level Operating System Solutions: Remains the company's primary revenue source. The proportion of total revenue was 86.7%, 86.2%, and 83.4% for 2022-2024 respectively, and 89.7% in Q1 2025. While showing slight fluctuations, it maintains a consistently high level.

AI Full-Stack End-to-End Solutions: Revenue grew from RMB 15.9 million in 2022 to RMB 54.6 million in 2024, achieving a compound annual growth rate of 85.3%. The proportion of total revenue increased from 2.0% in 2022 to 6.6% in 2024, and 2.9% in Q1 2025. The significant growth demonstrates positive development momentum for this business segment.

In-Vehicle Platform Services: Accounted for 11.3%, 12.2%, and 10.0% of total revenue for 2022-2024 respectively, and 7.4% in Q1 2025. Revenue showed some fluctuations during this period, reflecting that this business is in a development stage and has not yet formed a stable revenue growth model.

| Year | System-Level OS Solutions (%) | AI Full-Stack Solutions (%) | In-Vehicle Platform Services (%) | |------|------------------------------|----------------------------|----------------------------------| | 2022 | 86.7 | 2.0 | 11.3 | | 2023 | 86.2 | 1.6 | 12.2 | | 2024 | 83.4 | 6.6 | 10.0 | | Q1 2025 | 89.7 | 2.9 | 7.4 |

**Other Important Matters Analysis**

**Frequent Related-Party Transactions, Beware of Interest Conflicts**

Banma Network Technology Co., Ltd. maintains close related relationships and transactions with Alibaba and SAIC. Alibaba serves as the company's largest supplier, providing software solutions, licensing services, and cloud services; SAIC is both the largest customer and an important supplier. Such related-party transactions may bring synergistic effects but could also create conflicts of interest. For instance, in transaction pricing and service quality, it may be difficult to maintain complete independence and fairness. Attention should be paid to whether the company has established effective supervision and checks-and-balances mechanisms to safeguard company and shareholder interests.

**Multiple Financial Challenges, Sustainable Development Under Test**

Persistent Loss Pressure: Historical and recent loss conditions create pressure on the company's financial position. While the company expects to improve through expanding market share and optimizing cost structure, it still faces profitability challenges in the short term. Failure to effectively enhance profitability could affect the company's sustainable development and market confidence.

High Customer and Supplier Concentration: The company derives most revenue from a limited number of customers, with top five customers accounting for approximately 90% of revenue and the largest customer representing 38.8%-54.7%. Similarly, most procurement is concentrated among few suppliers, with top five suppliers accounting for 67.5%-73.7% of procurement and the largest supplier representing 50.5%-58.4%. This high concentration exposes the company to customer and supplier dependency risks. Reduced orders from major customers or supply disruptions could significantly impact operating performance.

**Intense Industry Competition, Advantages Need Consolidation**

Banma Network Technology Co., Ltd. holds certain advantages in the intelligent cockpit solutions market. By 2024 revenue, it is China's largest software-centric intelligent cockpit solution provider and ranks first by solution deployment volume. The company possesses cutting-edge innovative technologies, such as launching the industry's first AI software stack Yuanshen AI with intelligent agent characteristics specifically designed for in-vehicle environments, broad chip compatibility capabilities, and established partnerships with numerous OEMs. However, the industry faces intense competition from well-funded large tier-one suppliers, global automotive electronics groups, OEM internal projects, and leading AI companies. Banma Network Technology Co., Ltd. must continue innovating and enhancing technology and service levels to maintain competitive advantages.

**Customer Concentration, High Dependency Risk**

The company's main customers are automotive OEMs and tier-one suppliers, such as SAIC, Customer A, and Customer B. High customer concentration and dependence on key customers expose the company to risks related to customer procurement decisions, vehicle project planning, and product roadmap adjustments. If major customers reduce procurement, delay mass production plans, or terminate cooperation for various reasons, it could significantly impact business and financial performance. However, the company is also working to expand its customer base, with revenue from non-SAIC customers gradually increasing, showing progress in customer diversification.

**Supplier Concentration, Focus on Supply Risks**

Major suppliers include Alibaba, among others, with similarly high supplier concentration. Dependence on few suppliers exposes the company to risks of supply restrictions, price increases, and supplier operational issues, potentially causing delays in solution production and delivery or cost increases. Although the company believes this concentration does not reflect structural dependence or create significant risks, attention should still be paid to supplier stability and the effectiveness of supply risk mitigation measures.

**Controlling Shareholders' Significant Influence, Focus on Governance Balance**

Upon completion of equity adjustments and incentive arrangements and immediately before completion of the offering, Alibaba through related entities will own approximately 41.67% of the company's total issued share capital and control 37.09% of voting rights; SAIC through related entities will own approximately 32.90% of the company's total issued share capital and control 35.48% of voting rights. Both constitute a controlling shareholder group. Strong support from controlling shareholders provides resources and strategic synergistic advantages for company development, but may also create situations of misaligned interests. Attention should be paid to whether the corporate governance structure can effectively balance various parties' interests.

**Experienced Core Management, Focus on Development Adaptability**

The company's management team has deep expertise in software, artificial intelligence, and automotive innovation. CEO Mr. Dai Wei has nearly 20 years of experience in the internet and technology industries, having participated in multiple core businesses including Taobao and Alipay, with rich experience in product development and business operations. The management team's professional background has laid a foundation for the company's development in intelligent mobility, but whether the team can continue adapting to market changes and company development needs as business expands remains to be observed.

**Multiple Risk Factors, Investment Requires Caution**

Industry Competition Risk: The intelligent cockpit solutions market faces intense competition with rapid technological advancement, fierce pricing competition, and constantly changing customer demands. Competitors may launch more advanced solutions or more attractive features, leading to reduced market share, increased pricing pressure, or accelerated R&D investment.

Business Growth Risk: The company's past performance may not represent future growth. Rapid expansion places enormous demands on supply chain, R&D capabilities, and personnel, potentially leading to unforeseen delays, cost overruns, or quality issues. Additionally, future growth depends on multiple uncontrollable factors including market demand, technology development, competitive landscape, and regulatory requirements.

Technology R&D Risk: While the company invests heavily in R&D, research outcomes are uncertain. Misjudgment of technology trends, prototype development delays, or unforeseen technical setbacks could impair the company's ability to launch new features or products on schedule. Even with successful R&D, OEM and car owner acceptance and investment returns remain uncertain.