Changan-Backed EV Maker Avatr Files for Hong Kong IPO Following $1.6 Billion Cumulative Loss
Avatr Technology, a premium electric vehicle manufacturer backed by state-owned Changan Automobile and battery giant CATL, has filed for an initial public offering in Hong Kong. The listing application marks a critical test for the potential investor appetite in China's crowded EV sector, as the company seeks to balance aggressive revenue growth with substantial accumulated deficits.
For the first half of 2025, Avatr reported revenue of RMB 12.21 billion yuan (US$1.68 billion), representing a 98.5% increase compared to the same period last year. Despite the topline surge, the company recorded a net loss of RMB 1.59 billion for the six-month period. While Avatr has successfully turned its gross margin positive—reaching 10.1% in the first half of this year—it has accumulated total losses exceeding RMB 11.3 billion over the past three and a half years.
Operational momentum remains strong, with deliveries significantly accelerating. The automaker sold 56,729 vehicles in the first half of 2025, a 151% jump year-on-year. A recent equity transfer prior to the filing implies a valuation of approximately RMB 26 billion for the company. The IPO is being jointly sponsored by CITIC Securities and CICC.
Proceeds from the listing are earmarked for product R&D, brand construction, and the expansion of sales networks. The move to go public follows Avatr’s deepening strategic alliance with Huawei, evidenced by its recent completion of an RMB 11.5 billion investment to acquire a 10% stake in Huawei’s smart car subsidiary, Shenzhen Yinwang Intelligent Technology.
Financial Performance and Margins
Avatr has demonstrated rapid revenue scaling since beginning deliveries in late 2022. Annual revenue grew from RMB 28 million in 2022 to RMB 5.65 billion in 2023, before surging to RMB 15.2 billion in 2024. In the first seven months of 2025 alone, revenue exceeded RMB 15 billion.
However, this expansion has come at a high cost. The company incurred net losses of RMB 2.02 billion, RMB 3.69 billion, and RMB 4.02 billion in 2022, 2023, and 2024, respectively. Combined with the loss in the first half of 2025, the cumulative deficit amounts to RMB 11.31 billion.
A key positive indicator for investors is the trajectory of the company’s gross margin. After posting negative margins of -365.5% in 2022 and -3% in 2023, the metric turned positive to 6.3% in 2024 and further consolidated to 10.1% in the first half of 2025.
Sales Volume and Market Targets
Avatr currently markets four models: the Avatr 06, 07, 11, and 12. Since initiating deliveries, volume has grown from 114 units in 2022 to 61,588 units in 2024.
Despite the rapid year-on-year growth in the first half of 2025, the company faces challenges in meeting its full-year targets. Cumulative sales from January to October 2025 stood at 104,245 vehicles. This figure represents less than 50% of the company’s stated annual sales target of 220,000 units.
Management has outlined ambitious long-term goals, targeting global sales of 400,000 units by 2027 and 1.5 million units by 2035. The company is also aggressively pursuing overseas markets, with plans to enter over 80 countries and regions by 2030. In the first half of 2025, overseas markets contributed RMB 686 million to revenue.
Shareholding and Strategic Backing
Avatr operates under a "CHN" model, leveraging the resources of Changan, Huawei, and CATL. Although Huawei is not a direct shareholder of the listing entity, it remains a critical strategic partner in technology and product development.
According to the prospectus, Changan Automobile is the largest shareholder, holding 40.99% prior to the IPO. CATL serves as the second-largest shareholder with a 9.17% stake. Other major investors include state-backed entities such as Chongqing Yu'an (8.81%) and various funds associated with Southern Industrial Asset Management.
The company has raised over RMB 19 billion across four financing rounds. Notably, in October 2025, Changan Automobile announced that Avatr had completed the payment of RMB 11.5 billion to acquire 10% of Huawei's Yinwang. The two companies plan to launch four new co-created models by the end of 2027 using Yinwang’s advanced intellgient driving solutions.
Valuation Context
A recent transaction detailed in a November 2025 disclosure by Pateo Connect+ sheds light on Avatr’s pre-IPO valuation. A subsidiary of Pateo sold a 0.24% stake in Avatr for RMB 62.44 million, valuing the automaker at approximately RMB 26.02 billion.
The company plans to use the IPO funds to further develop its "new luxury" positioning. Data from the prospectus indicates that in the second quarter of 2025, the Avatr 06 ranked second in sales among mid-sized new luxury energy sedans priced above RMB 200,000 in China, while the Avatr 12 held the second spot in the large sedan category priced above RMB 300,000.