Revenue soars by 68%, yet net loss still exceeds 1.4 billion. When will Black Sesame Intelligence break the cycle of "increased revenue without profit growth"?

Ask AI: When will Sesame Smart’s high R&D spending translate into profitability?

By: Haishan

Source: Boyang Finance

With the halo of “the first domestic intelligent driving chip company,” Sesame Smart still hasn’t crossed the profitability threshold.

According to the profit warning released by Sesame Smart (02533.HK), 2025 revenue is expected to exceed RMB 800 million, a year-on-year increase of more than 68.7%, with net losses of no more than RMB 1.48 billion. More concerning than the profit warning at the same time is the renewed turbulence surrounding Sesame Smart’s placing matter. Previously, the company issued a placing announcement stating that the subscribers were investment funds related to Ji Capital; however, on March 19 it issued another announcement saying it had terminated the placing agent agreement with placing agents China International Capital Corporation (CICC) and Huatai International.

What exactly has Sesame Smart gone through? What problems will its future development face?

01

Profitability challenges to be addressed

Sesame Smart listed in Hong Kong in August 2024. It is a leading supplier of automotive-grade intelligent vehicle computing SoCs and intelligent-vehicle solutions based on SoCs. Its two major chip product lines, Huashan and Wudang, are the core business carriers.

On the evening of March 5, Sesame Smart released a profit warning. It expects 2025 revenue to exceed RMB 800 million, up more than 68.7% year on year; net loss of no more than RMB 1.48 billion, and operating loss of no more than RMB 1.5 billion, with the year-on-year narrowing of at least 14.4%.

Source: Profit warning

The announcement shows that revenue growth is mainly due to higher-volume production of high-end assisted driving and bulk shipments of L2–L3 commercial vehicles and L4 unmanned logistics, as well as an increase in revenue from the robotics business. Meanwhile, net losses are attributed to increased spending on AI and computing power, as well as share-based compensation expenses of no less than RMB 300 million, and a decrease in fair value gains from financial instruments. The narrowing of operating losses benefits from growth in the robotics business, increased gross profit from high-end assisted driving and solutions, and lower operating costs.

However, the company’s operating situation is still not optimistic. Even though operating loss has narrowed, the loss level remains high. Looking back at historical data, in 2024 it appeared to achieve net profit of RMB 313 million, but in reality it was a one-off gain driven by changes in the fair value of financial instruments; after excluding that, operating profit was still negative.

Source: Tonghuashun

In fact, the data for the first half of 2025 already confirms its predicament. In that period, revenue was RMB 253 million, up 40.4% year on year, but net loss reached RMB 762 million. Moreover, its annual loss of nearly RMB 1.5 billion far exceeds its revenue scale.

From the business segments perspective, Sesame Smart’s主营 business is divided into two major segments: autonomous driving products and solutions, and intelligent imaging solutions. In the first half of 2025, each segment achieved revenue of RMB 237 million and RMB 16 million, respectively, with year-on-year growth rates of 41.5% and 24.8%. However, gross margin for both declined, to 20.9% and 82.4% respectively.

Sesame Smart attributes the decline in gross margin to higher hardware and labor costs brought by expanding into new scenarios. Fundamentally, this is an “expand by sacrificing price” growth strategy—securing shipment volumes by lowering prices—which not only compresses profit margins, but also reflects weak product pricing power.

In addition, the intelligent driving chip industry is technology-intensive, and high R&D investment is the norm. But Sesame Smart’s R&D spending has already far exceeded its capacity to support revenue. In the first half of 2025, R&D expenses were RMB 618 million, accounting for as much as 244% of revenue, and it remains a “bottomless pit” consuming cash flow.

As of the end of June 2025, the company had RMB 8B in cash and cash equivalents, which appears sufficient. However, combined with continuous large-scale losses and rigid expenditures such as share-based payments, cash flow pressure has become increasingly prominent, and the company’s future funding reserves for R&D and market expansion may not be optimistic either.

02

Challenges to product competitiveness

At present, China’s intelligent driving market is showing explosive growth. Sesame Smart has seized the opportunity accurately, and early results have emerged in the high-end assisted driving chip sector.

In terms of product applications, Sesame Smart’s A1000-series chips’ assisted driving solutions have been successfully applied to multiple models from leading automakers such as Geely and Dongfeng. Its C1200-series cross-domain fusion chips have been deeply collaborated with multiple companies, resulting in production-determined orders. In the unmanned small vehicle field, the L4 intelligent driving system built with ecosystem partners has continued to ship steadily.

In addition, the company, together with GuoQi Zhikong, secured its first production-determined project for the Huashan A2000 chip. The intelligent driving solutions co-developed with partners have also obtained production-determined projects from a leading domestic automaker, covering full-scenario intelligent driving functions from the L2+ to L3 levels, and mass-produced models are expected to achieve production within 2026.

However, the intelligent driving chip track is a typical technology-intensive arena. Computing power and customer recognition are the two key elements for gaining a foothold in the market, and computing power is the embodiment of core competitiveness.

Currently, the high-end intelligent driving computing chip market supporting urban NOA has formed an “one super two strong” landscape. NVIDIA, Huawei, and Horizon Robotics together account for nearly 90% of market share. Horizon Robotics dominates the ADAS market for independent brands with a market share of nearly 48%. By contrast, Sesame Smart has not yet entered the top five domestically by share in high-computing-power chip market.

In terms of product computing power, Sesame Smart also faces challenges. Its flagship A1000 chip has computing power of only 58TOPS, which can only support L2+/L3-level assisted driving. Compared with Horizon’s Journey 6M at 128TOPS and NVIDIA Orin-X at 254TOPS, there is still a significant gap. Given mainstream automakers’ urgent demand for higher computing power, Sesame Smart finds itself in an awkward middle position.

In the customer structure, Sesame Smart also has problems. Although it claims to cooperate with leading customers such as Geely, BYD, Dongfeng, and FAW, the production-determined models that have already been scaled generally are not breakout products. Taking Geely as an example, its Galaxy Star Glory 8 exceeded 10,000 units in sales in August 2025, but monthly sales since 2026 have dropped to the 3,000-unit range. Meanwhile, Galaxy E8’s sales in February 2026 were only 120 units, falling into the low hundreds. In contrast, Horizon Robotics not only lists top new-energy players such as BYD and Li Auto in its customer roster, but also is deeply tied to Volkswagen Group through joint ventures, and starting in 2026 multiple models will be mass-produced with its solutions—leading to higher market recognition.

Moreover, Sesame Smart’s customer structure is highly concentrated, presenting a risk of customer singularity. Overreliance on top automakers can ensure baseline shipment volumes, but it also harbors enormous risks. For example, leading automakers have strong pricing power, which can squeeze profit margins. If an automaker slows down procurement schedules or cancels production-determined orders due to industry cycles, strategic adjustments, competitor substitution, or other factors, the company’s performance could experience large fluctuations.

03

Development stalemateneeds to be solved

Facing weak main-business growth momentum, Sesame Smart is actively pushing for diversified expansion, treating the robotics sector as a key focus.

In November 2025, Sesame Smart released the SesameX multidimensional embodied intelligent computing platform, officially entering the humanoid robotics field, and announced the first batch of robotics partners including Cloud Deep Place and Fourier Intelligence, demonstrating its drive in this emerging area. Later that same year, the company invested RMB 478 million to acquire 60% of the equity of edge AI chip company Yizhi Electronics, aiming to address technical shortcomings in low-power, high value-for-money AI chips and build a product matrix covering low-, mid-, and high-end tiers.

From a technology migration perspective, both intelligent driving and robotics face challenges such as complex environment perception and rapid decision-making. The experience Sesame Smart has accumulated in automotive-grade chip areas has some value that can be reused. And in the first half of 2025, the robotics business has started contributing revenue—an encouraging signal.

However, the humanoid robotics industry is still in an early exploration stage. Chip demand shows fragmented characteristics, and standards have not yet been determined. Commercialization and deployment may still take 5–10 years. At this time, making large-scale investments is undoubtedly a high-risk game. In addition, there are significant differences between intelligent driving and robotics chips in areas such as computing architecture and power consumption requirements. The core computing architecture and scenario-based technology stack cannot be directly and efficiently reused, which can also lead to dispersed R&D resources—posing challenges for the company.

When expanding into overseas markets, Sesame Smart also faces difficulties. Although its Huashan A2000 chip has passed review by relevant U.S. departments and is approved for global sales, in the first half of 2025 the number and models of overseas production-determined orders only set new historical highs. Still, against the backdrop of ongoing escalation of global tariff wars and policy barriers in the U.S. and Europe against Chinese chips, actual business results still need further observation.

To support business development, Sesame Smart is actively seeking external funding support. On January 8 this year, the company announced it would subscribe for new shares through a general mandate, with entities such as the one actually controlled by Wuyuefeng Kechuang as subscribers; CICC and CITIC Securities served as financial advisers. The settlement was completed on March 6. The total fund-raising amount was HKD 539 million, of which 90% would be used for strategic mergers and acquisitions and investments, focusing on areas such as artificial intelligence chips, and 10% would be used to supplement working capital.

Worth noting is that less than two years since its listing, Sesame Smart’s cumulative financing amount has already reached approximately HKD 2.8 billion.

On March 9, the company announced a placing plan to issue new shares to Ji Capital and Ji Capital Middle East. The net fund-raising amount is approximately HKD 631 million, with CICC and Huatai International acting as placing agents. According to the plan, the funds will be used for core technology R&D, productization market expansion, and day-to-day operations.

Source: Company announcement

But on March 19, the company terminated the placing agent agreements with CICC and Huatai International. The company explained that it decided to complete the subscription settlement directly with Ji Capital and would not hire additional placing agent institutions. The net proceeds from the subscription were adjusted from HKD 631 million to approximately HKD 632 million, and the change was due to not needing to pay placing agent fees. This does not affect the overall financing objectives or the subsequent use of funds.

Source: Company announcement

Normally, in placing agent agreements for Hong Kong stocks, there will be clauses such as “a unilateral termination shall not occur unless there are material special circumstances,” along with obligations for the broker to “use its best efforts to facilitate the placing,” and other arrangements. The situation where both CICC and Huatai International exit the placing project is not common.

For Sesame Smart, high revenue growth cannot hide the limitations of a “burn cash for growth” model. Its lack of strong self-generated cash flow is an urgent issue to be solved, and it has become the key to turning around its development predicament.

In the fiercely competitive market, breaking through ultimately depends on strengthening the competitiveness of core products. What path Sesame Smart will take in the future—we will continue to monitor.