Initiation of coverage
Momenta Global (6880 HK): Data Flywheel Leader At A Profit Inflection Point
BUY (Initiation)
Current price:
Target price:
Upside:
HK$146.00
HK$270.00
+84.9%
Analyst
Highlights
- Initiate coverage on Momenta with BUY and a target price of HK$270.00.
- Momenta is the largest independent provider of driving-automation software globally, with 64.5% of vehicles sold with an independent urban navigationon-autopilot system as at 28 Feb 26, and a data flywheel of more than 1m vehicles returning about 630,000 clips a day.
- Cumulative nominations totalling 219 at mid-26 (of which 105 are already at SOP) underpin our revenue forecasts of Rmb4b/Rmb11.3b/Rmb21.6b for 2026/28/30 respectively, representing a 55% five-year CAGR.
- The shift to licensing lifted blended gross margin from 17.5% in 2023 to 71.6% in 2025. We expect adjusted net loss to narrow to Rmb170m/Rmb25m in 2026/27 respectively, before turning profitable at Rmb864m in 2028 and growing to Rmb3.8b in 2030.
Analysis
- The number one independent player. Momenta Global (Momenta) held 65.4% of the 249 cumulative start-of-production (SOP) programmes and nominations among independent urban navigation-on-autopilot (NOA) providers globally as at 28 Feb 26, against 14.5% for Huawei, and serves 26 OEM customers, 13 of them international. Its fleet has accumulated 1,628m km of NOA driving data, about 1.8 times that of the next-largest independent provider, and returns about 630,000 clips a day.
- Customers are also shareholders. General Motors Company holds 8.58% of the enlarged share capital and Mercedes-Benz 6.13%, and each has nominated a non-executive director. Models run from the electric Mercedes-Benz CLA and BMW iX3 to Toyota’s bZ5 and BYD’s Denza range.
- Licensing drives margin expansion. Licensing revenue rose from 3.1% of total revenue in 2023 to 40.1% in 2025, and we expect it to reach 44.1%/50.4% by 2028/30 respectively. The number of installations could rise from 510,000 to 2.91m/6.85m in 2028/30 resp ectively (68% five-year CAGR), more than offsetting a 5% volume discount.
- Robotaxi and robovan services offer upside optionality. The L4 fleet could grow from 31 vehicles as at end-25 to 11,000/78,000 by end-27/30, contributing 2.1%/16.6% of 2027/30 revenue. Momenta is seeking the retail subscription model for urban NOA, which our forecasts have not factored in.
- Initiate coverage with a target price of HK$270.00, based on 10-year DCF (WACC: 15%/terminal growth: 3%). Our target price implies 7.7x 2027F PS.
- Risks: Customer concentration, data-flywheel erosion, ship/system-on-chip supply, GPU purchases, licensing fee deflation, robotaxi timing/regulation.
Highlights
- Initiate coverage on Momenta with BUY and a target price of HK$270.00.
- Momenta is the largest independent provider of driving-automation software globally, with 64.5% of vehicles sold with an independent urban navigationon-autopilot system as at 28 Feb 26, and a data flywheel of more than 1m vehicles returning about 630,000 clips a day.
- Cumulative nominations totalling 219 at mid-26 (of which 105 are already at SOP) underpin our revenue forecasts of Rmb4b/Rmb11.3b/Rmb21.6b for 2026/28/30 respectively, representing a 55% five-year CAGR.
- The shift to licensing lifted blended gross margin from 17.5% in 2023 to 71.6% in 2025. We expect adjusted net loss to narrow to Rmb170m/Rmb25m in 2026/27 respectively, before turning profitable at Rmb864m in 2028 and growing to Rmb3.8b in 2030.
Analysis
- The number one independent player. Momenta Global (Momenta) held 65.4% of the 249 cumulative start-of-production (SOP) programmes and nominations among independent urban navigation-on-autopilot (NOA) providers globally as at 28 Feb 26, against 14.5% for Huawei, and serves 26 OEM customers, 13 of them international. Its fleet has accumulated 1,628m km of NOA driving data, about 1.8 times that of the next-largest independent provider, and returns about 630,000 clips a day.
- Customers are also shareholders. General Motors Company holds 8.58% of the enlarged share capital and Mercedes-Benz 6.13%, and each has nominated a non-executive director. Models run from the electric Mercedes-Benz CLA and BMW iX3 to Toyota’s bZ5 and BYD’s Denza range.
- Licensing drives margin expansion. Licensing revenue rose from 3.1% of total revenue in 2023 to 40.1% in 2025, and we expect it to reach 44.1%/50.4% by 2028/30 respectively. The number of installations could rise from 510,000 to 2.91m/6.85m in 2028/30 resp ectively (68% five-year CAGR), more than offsetting a 5% volume discount.
- Robotaxi and robovan services offer upside optionality. The L4 fleet could grow from 31 vehicles as at end-25 to 11,000/78,000 by end-27/30, contributing 2.1%/16.6% of 2027/30 revenue. Momenta is seeking the retail subscription model for urban NOA, which our forecasts have not factored in.
- Initiate coverage with a target price of HK$270.00, based on 10-year DCF (WACC: 15%/terminal growth: 3%). Our target price implies 7.7x 2027F PS.
- Risks: Customer concentration, data-flywheel erosion, ship/system-on-chip supply, GPU purchases, licensing fee deflation, robotaxi timing/regulation.
BUY (Initiation)
Current price:
Target price:
Upside:
HK$146.00
HK$270.00
+84.9%
Analyst
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