By Katrina Hamlin

Hong Kong's latest robotaxi listing includes collision control. Momenta Global (6880.HK) sells assisted- and autonomous-driving software but more carmakers are following Tesla NASDAQ:TSLA and Xpeng's HKEX:9868 lead developing the tech in-house. That may have slammed the brakes on the startup's $9 billion IPO valuation, but its independence may ultimately prove an advantage.

Momenta, led by founder and CEO Cao Xudong, has a garage of auto clients for its assisted driving solutions, including Toyota TSE:7203 and BYD SZSE:002594. That fueled the company's 72% gross margin last year - more than double its Hong Kong-listed peers, namely Pony AI HKEX:2026, which is narrowly focused on robotaxis, and WeRide HKEX:800, which is in the early stages of commercialising assisted driving products alongside its flagship robotaxis.

Assuming Momenta's revenue grows at a similar rate to last year, the $9 billion price tag is 14 times 2026 sales, a chunky discount against the 20 times and 16 times implied by analysts' estimates for Pony AI and WeRide, per Visible Alpha. Those rivals' Hong Kong shares have already fallen 36% and 53% this year.

The competition does look fierce. Alphabet's NASDAQ:GOOG Waymo, Wayve, and Baidu's NASDAQ:BIDU Apollo Go are also piling into robotaxis. Tesla and Xpeng are also building their own assisted driving stack. Tesla counts 1.3 million subscribers for its so-called "full self driving" system. The $110 billion BYD, meanwhile, says its "God's Eye" setup has been installed in over 2 million cars. There are only some 650,000 vehicles on the road with Momenta's solution, per its prospectus.

Yet even BYD, which has a 120,000-strong R&D department, isn't phasing out Momenta. Rather, it reserves their tech for its premium models. By working with dozens of marques, Momenta can eventually build up a fleet much larger than any single brand. That will let it gather more real-world data to further improve both assisted and autonomous driving models.

Mercedes-Benz XETR:MBG, BYD, Toyota, General Motors NYSE:GM and Chery Automobile together will own more than 17% of Momenta's shares following the listing, a strong endorsement for the firm despite the best efforts of the auto industry's own engineers to eclipse it. That's a reassurance as the startup faces growing traffic.

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CONTEXT NEWS

Chinese self-driving technology company Momenta Global aims to raise HK$5.9 billion ($751 million) in a Hong Kong initial public offering, valuing the company at $8.9 billion, according to its prospectus released on June 29. Shares will debut on July 8.