ECARX Holdings Inc. Announces Proposed Offering of 25,000,000 Class A Ordinary Shares

Rhea-AI Summary

ECARX Holdings (Nasdaq: ECX), a global mobility tech provider, has announced a public offering of 25,000,000 Class A ordinary shares with an additional 30-day option for underwriters to purchase up to 3,750,000 shares. The offering will be led by Deutsche Bank AG, Hong Kong Branch and China International Capital Hong Kong Securities as underwriter representatives.

The shares will be offered under ECARX's shelf registration statement on Form F-3, which received SEC approval on December 27, 2024. The company plans to utilize the proceeds for three main purposes:

• Research and development initiatives
• Establishment of overseas supply chain networks
• General corporate purposes

Positive

• Company expanding R&D capabilities through new funding
• Strategic investment in overseas supply chain network development

Negative

• Potential dilution of existing shareholders' value through 25M share offering
• Additional 3.75M shares may further dilute ownership if underwriters exercise their option

Insights

Financial Analyst

ECARX's announced public offering of 25 million Class A ordinary shares (plus a potential 3.75 million additional shares through underwriter options) represents a significant capital-raising event. Based on the current $2.26 share price, this offering could raise approximately $56.5 million before discounts and expenses, representing roughly 7% of the company's $804 million market capitalization.

This offering will create meaningful dilution for existing shareholders. Secondary offerings typically price below current market value to ensure full subscription, potentially increasing the dilutive impact beyond simple share count calculations. The company hasn't disclosed the offering price yet, which is a crucial detail investors should monitor.

The stated use of proceeds for R&D initiatives, overseas supply chain establishment, and general corporate purposes suggests strategic growth investments rather than merely funding operations. However, without specific allocation amounts between these purposes or disclosure of current cash reserves and burn rate, it's difficult to fully assess capital deployment efficiency.

The selection of prominent underwriters (Deutsche Bank and China International Capital ) indicates institutional confidence in placing these shares. The timing near quarter-end potentially suggests balance sheet reinforcement ahead of financial reporting, though this remains speculative without more information about ECARX's current financial position.

For investors, this offering presents a balanced situation - providing capital for growth initiatives while diluting ownership. Long-term impact will depend on management's ability to efficiently deploy this capital toward generating returns exceeding their cost of equity.

Corporate Strategy Expert

ECARX's 25 million share offering signals a significant strategic pivot requiring substantial capital investment. The three-pronged capital allocation strategy reveals important priorities for this mobility tech provider.

First, the R&D investment focus is critical in the technology-driven mobility sector where innovation determines competitive positioning. While specifics aren't provided, this likely involves enhancing their technology stack to maintain relevance in a rapidly evolving industry.

Second, establishing overseas supply chain networks represents a major geographic expansion initiative. This suggests ECARX is pursuing manufacturing scale-up and international presence, potentially to access new markets, optimize production costs, or strengthen supply chain resilience. This expansion introduces execution challenges but could create meaningful growth opportunities.

The "general corporate purposes" category provides strategic flexibility but lacks transparency. This could encompass anything from working capital needs to potential strategic acquisitions, making it difficult to evaluate this portion of the capital allocation.

The scale of this offering - approximately 7% of current market capitalization - indicates this isn't incremental growth funding but rather a substantial strategic bet. The company is leveraging its public status to fund expansion that would be difficult to finance through operational cash flow alone.

For ECARX to create shareholder value from this dilutive offering, management must demonstrate exceptional capital allocation discipline and execution capabilities across both technological development and geographic expansion initiatives.

SHANGHAI, March 27, 2025 (GLOBE NEWSWIRE) -- ECARX Holdings Inc. (Nasdaq: ECX) (“ECARX” or the “Company”), a global mobility tech provider, announced the commencement of an underwritten public offering (the “Offering”) of 25,000,000 Class A ordinary shares of the Company (the “Ordinary Shares”). The Company intends to grant the underwriters in the Offering a 30-day option to purchase up to an additional 3,750,000 Ordinary Shares.

Deutsche Bank AG, Hong Kong Branch and China International Capital Corporation Hong Kong Securities Limited are acting as representatives of the underwriters in the Offering.

The Ordinary Shares will be offered under the Company’s shelf registration statement on Form F-3 which was declared effective by the Securities and Exchange Commission (the “SEC”) on December 27, 2024. A preliminary prospectus supplement related to the proposed Offering has been filed with the SEC. The registration statement on Form F-3 and the preliminary prospectus supplement are available on the SEC website at: http://www.sec.gov. Before you invest, you should read the shelf registration statement, prospectus supplement (including the accompanying base prospectus) and the documents incorporated by reference therein. Copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained from (1) Deutsche Bank AG, Hong Kong Branch, Level 60, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong; and (2) China International Capital Corporation Hong Kong Securities Limited, 29th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong.

The Company plans to use the net proceeds from the Offering primarily for (i) research and development initiatives, (ii) establishment of overseas supply chain networks, and (iii) general corporate purposes.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

This press release contains information about the pending offering of the Ordinary Shares, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or final terms of the Offering.

About ECARX Holdings Inc.

ECARX (Nasdaq: ECX) is a global automotive technology provider with capabilities to deliver turnkey solutions for next-generation smart vehicles, from the system on a chip (SoC), to central computing platforms, and software. As automakers develop new electric vehicle architectures from the ground up, ECARX is developing full-stack solutions to enhance the user experience, while reducing complexity and cost.

Founded in 2017 and listed on the Nasdaq in 2022, ECARX now has over 1,900 employees based in 12 major locations in China, UK, USA, Sweden and Germany. The co-founders are two automotive entrepreneurs, Chairman and CEO Ziyu Shen, and Eric Li (Li Shufu), who is also the founder and chairman of Zhejiang Geely Holding Group — with ownership interests in global brands including Lotus, Lynk & Co, Geely Galaxy, Polestar, smart, and Volvo Cars. ECARX also works with other well-known automakers, including Volkswagen Group, FAW and Dongfeng Peugeot-Citroën. To date, ECARX products can be found in over 8.1 million vehicles worldwide.

Safe Harbor Statement
This release contains statements that are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s beliefs and expectations as well as on assumptions made by and data currently available to management, appear in a number of places throughout this document and include statements regarding, amongst other things, results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which we operate. The use of words “expects,” “intends,” “anticipates,” “estimates,” “predicts,” “believes,” “should,” “potential,” “may,” “preliminary,” “forecast,” “objective,” “plan,” or “target,” and other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including, but not limited to statements regarding our intentions, beliefs, or current expectations concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, and the markets in which we operate.

For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statement, see ECARX’s filings with the U.S. Securities and Exchange Commission. ECARX undertakes no obligation to update or revise forward-looking statements to reflect subsequent events or circumstances, except as required by applicable law.

Investor Contacts:
Rene Du
ir@ecarxgroup.com

Media Contacts:
ecarx@christensencomms.com

FAQ

How many shares is ECARX (ECX) offering in its March 2025 public offering?

ECARX is offering 25,000,000 Class A ordinary shares, with an additional 30-day option for underwriters to purchase up to 3,750,000 shares.

What will ECARX (ECX) use the proceeds from its 2025 share offering for?

The proceeds will be used for R&D initiatives, establishing overseas supply chain networks, and general corporate purposes.

Who are the underwriters for ECARX's (ECX) 2025 public offering?

Deutsche Bank AG, Hong Kong Branch and China International Capital Hong Kong Securities are acting as representatives of the underwriters.

When was ECARX's Form F-3 shelf registration statement approved by the SEC?

ECARX's Form F-3 shelf registration statement was declared effective by the SEC on December 27, 2024.