Momenta's Stock Slumps Post-HK Listing as Pure-Software ADAS Model Faces Market Test

Momenta recently listed on the Hong Kong Stock Exchange at an issue price of HK$295.6 per share. On its debut day, the stock opened 1.83% higher, reaching an intraday high of HK$314.8, briefly pushing its market capitalization above HK$70 billion. Its public offering was oversubscribed by 413.6 times, while international orders exceeded HK$100 billion, and it secured 14 cornerstone investors. However, the share price retreated in the afternoon and closed nearly flat with the issue price. The stock then entered a sustained downtrend, falling below the IPO price for the first time on July 13, hitting a low of HK$276 on July 16, and dropping further to HK$241.2 two weeks after listing—down 18% from the issue price. As of July 29, the stock closed at HK$270, still below its IPO price. Momenta is a supplier specializing in intelligent driving software and algorithms, with no involvement in vehicle manufacturing, chips, or sensors. Its primary revenue comes from technical service fees for custom-developed ADAS systems for automakers and software licensing fees based on production volumes. From 2023 to 2025, the company’s revenue grew from RMB 743 million to RMB 24.13 billion, representing a compound annual growth rate exceeding 80%. Gross margin improved from 17.5% to 71.6%, and software licensing revenue surged from RMB 230 million to RMB 9.68 billion—an increase of over 42-fold. Nevertheless, capital markets remain skeptical about its future growth prospects. As a pure-play software provider, Momenta lacks hardware integration and clear patent moats, while automakers are accelerating in-house development of intelligent driving software. In contrast, rival Horizon Robotics adopts a hardware-software integrated model; its ADAS chips benefit from production capacity barriers and economies of scale, with strong shipment expectations and more robust valuation support. As of July 23, Momenta’s market cap stood at HK$64.8 billion, compared to Horizon’s HK$66.6 billion—a gap of just HK$1.8 billion. Horizon holds a leading position in mid-to-high-end ADAS chips and is deepening collaborations with overseas clients such as Volkswagen. Momenta’s key customers include SAIC Motor and Li Auto, both of which are significantly increasing their internal R&D investments. To address these challenges, Momenta plans to transform into a “physical AI company” by 2026 and has announced the R7 reinforcement learning world model. However, this new business line is unlikely to generate meaningful revenue in the near term. The company reported an adjusted net loss of RMB 3.03 billion in 2025 and expects to maintain a high level of losses through 2026. At IPO, its price-to-sales ratio exceeded 25x, requiring it to demonstrate that it can emerge as one of the ultimate winners in the intelligent driving race. Currently, the intelligent driving sector exhibits strong enthusiasm in the private (primary) market but tepid sentiment in the public (secondary) market. As the largest publicly listed pure-software player in this space, Momenta must further validate its irreplaceability. Future competitiveness may hinge less on algorithmic prowess alone and more on the actual degree of customer reliance on its solutions.