Lantu's Hong Kong listing faces a lukewarm response! Profits supported by 1.08 billion yuan in subsidies cannot hide the dilemma of a single sales model.

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Source: Digital Intelligence Research Society, Text | Xiao Tian

For the newly listed Lantu Auto in the capital market, the share price falling below the listing price is a signal. Institutional investors, when evaluating this “national team” new force, have stripped away short-term subsidies and related-party transactions that boosted its book profits, and see the reality of its struggle to maintain monthly sales near 10,000 units.

On March 19, Lantu Auto was listed on the Main Board of the Hong Kong Stock Exchange via the introduction method. As a high-end new energy passenger vehicle brand under Dongfeng Group, Lantu Auto did not issue new shares or raise funds during this listing.

On the first day of trading, Lantu Auto’s stock opened lower, with intraday declines exceeding 16%, experiencing a “break below” the listing price. The next trading day, it closed lower again, with a total market value of HKD 23.368 billion.

The market reaction after the listing contrasts sharply with the impressive financial data in Lantu Auto’s prospectus. By 2025, Lantu Auto is projected to achieve a profit of 1.017 billion yuan, making it one of the few new force car companies to turn a profit before going public. Its gross profit margin has also risen from 8.3% in 2022 to 20.9% in 2025.

However, Digital Intelligence Research Society has found that most of Lantu Auto’s profits come from government subsidies and non-recurring gains and losses. Excluding this income, the true profitability of its core business remains questionable. Additionally, Lantu Auto’s sales are highly concentrated in the MPV model Lantu Mars, with its intelligent driving experience deeply integrated with Huawei’s Qian Kun intelligent driving system.

In a fiercely competitive market, how to break free from reliance on “policy support” and “single dependency” is a long-term challenge that Lantu Auto must address in the secondary market.

“Book Profitability” and the Reality of Subsidies

In recent years, Lantu Auto’s revenue and gross profit have maintained rapid growth. From 2022 to 2024, its revenue reached 6.052 billion yuan, 12.749 billion yuan, and 19.361 billion yuan respectively. In 2025, revenue surged to 34.865 billion yuan, an 80.08% increase year-over-year. As revenue expanded, gross profit margin also increased from 8.3% in 2022 to 20.9% in 2025.

Net profit figures show losses of 1.538 billion yuan, 1.496 billion yuan, and 91 million yuan from 2022 to 2024, with losses narrowing each year. In Q4 2024, the company achieved its first quarterly profit. In 2025, Lantu Auto posted a net profit of 1.017 billion yuan, turning the books from loss to profit.

However, government subsidies played a decisive role in this net profit of 1.017 billion yuan.

Data shows that in 2025, government subsidies related to income amounted to 1.08 billion yuan, directly exceeding the total net profit for that period.

Excluding this 1.08 billion yuan in subsidies, Lantu Auto’s actual operating results in 2025 would have been a loss. This indicates that the so-called “pre-profit” new energy vehicle company still heavily depends on regional government support policies, and its core business does not yet have sustainable, independent “self-sustaining” profitability.

Not only does profit quality rely on external subsidies, but its revenue structure also shows significant related-party transactions. The prospectus discloses that from 2022 to July 2025, the top five customers’ sales accounted for increasing proportions, from 9.1% to 26.2%. Among them, sales of complete vehicles and parts to major shareholder Dongfeng Group (including Dongfeng Mobility and Dongfeng Commercial Vehicle’s leasing subsidiaries) reached 3.06 billion yuan in the first seven months of 2025, accounting for about 20% of total revenue. This high proportion of B2B related-party procurement somewhat masks the true demand in the retail C-end market.

In terms of assets, liabilities, and average vehicle price, Lantu Auto also faces pressure. As of the end of July 2025, its debt ratio reached 67.2%, higher than the industry average of companies like NIO. To maintain sales amid fierce price competition, the average selling price per vehicle has been declining—from about 277,500 yuan in 2022 to approximately 220,900 yuan in July 2025—somewhat diverging from its “high-end” brand positioning.

“Dual Dependency” and the Sales Dilemma

Beyond subsidy reliance, Lantu Auto faces product structure and core technology outsourcing issues—“dual dependency.”

Its product lineup includes the medium-large SUV Lantu FREE, MPV Lantu Mars, medium-large sedan Lantu Zhi Guang, and mid-size SUV Lantu Zhi Yin. But in actual sales, Lantu Mars is the main driver supporting the company’s overall performance.

Data shows that in 2025, Lantu Auto delivered a total of 150,169 vehicles, with Lantu Mars selling 80,248 units, accounting for over 53%. Other models’ sales are relatively weak.

This “single-legged” situation carries significant market risks.

On one hand, the MPV market in China accounts for a limited share of the overall passenger vehicle market. On the other hand, the new energy MPV segment is rapidly shifting from blue ocean to red ocean, with strong competitors like Denza D9, Zeekr 009, Li Auto MEGA, and Wey High Mountain entering the market, squeezing the space for Mars. Without competitive flagship models in the sedan and SUV segments, Lantu’s overall sales volume struggles to break through. The total deliveries in 2025 also failed to meet the initial target of 200,000 units.

In terms of intelligent experience, Lantu Auto has chosen a deep partnership with Huawei. In January 2024, Lantu and Huawei announced a strategic cooperation. In September, the Lantu Mars equipped with Huawei’s Qian Kun intelligent driving and HarmonyOS smart cockpit was launched, achieving monthly deliveries over 10,000 units shortly after. Soon after, Lantu announced an “all-in” strategy on intelligence, planning to equip all models with Huawei’s Qian Kun intelligent driving system.

Huawei’s mature solutions helped Lantu quickly address shortfalls in intelligent driving and boosted sales of some models. However, in today’s automotive market, intelligent driving capabilities are becoming a core factor in defining brand high-end positioning and long-term moat.

As Huawei’s Qian Kun intelligent driving and HarmonyOS cockpit are widely adopted across brands like Wenjie, Zhiji, and Aeva, “Huawei Inside” has become a common industry feature. As more automakers collaborate, differences in smart experience will be rapidly leveled. If consumers’ motivation to buy Lantu mainly stems from recognition of Huawei’s technology rather than the brand itself, Lantu’s long-term market differentiation could weaken. Without a fully self-developed core intelligent driving system, future hardware iterations and feature definitions may be constrained.

For Lantu Auto, newly listed on the capital market, the HK stock price falling below the listing price is a warning. When institutional investors evaluate this “national team” new force, they see the reality of struggling to sustain monthly sales near 10,000 units after stripping away short-term subsidies and related-party profits.

In the increasingly competitive and brutal elimination race ahead, Lantu Auto needs to provide more convincing answers by reducing reliance on single models, strengthening brand recognition, and achieving genuine commercial profitability.