DBS initiates coverage on China's mobility tech firm ECARX

Singapore-based DBS Group Research has initiated coverage on ECARX Holdings Inc, highlighting the Chinese mobility technology firm's accelerating international expansion and improving earnings outlook.

The brokerage assigned ECARX a fair value of $2.80 per share, a valuation it said reflects confidence in ECARX's execution and fundamentals.

It pointed to ECARX's global orderbook of about $1 billion and growing partnerships with major automakers, including a forthcoming Volkswagen Group program launching in Brazil and India from financial year 2026.

Management aims to lift overseas revenue to 50 percent of total sales by 2030, underlining the company's ambition to become a global supplier of intelligent vehicle technology.

In China, ECARX continues to strengthen ties with anchor customer Geely Group, supplying over 60 percent of its computing units across brands such as Galaxy, Lynk & Co, and Volvo.

The rollout of Geely's G-Pilot ADAS system from 2025 is expected to be a key driver of volume growth.

DBS highlighted ECARX's competitive edge in in-house SoC design, its SiEngine joint venture, and a proprietary GAS integration platform that cuts system integration time by more than 50 percent.

ECARX, currently China's fourth-largest cockpit domain controller supplier with a 7 percent share, targets adjusted EBITDA breakeven in the second half of 2025 and profit breakeven in financial year 2026.

Key catalysts include execution of global programs and operational efficiency gains, though DBS cautioned that a slowdown in auto demand and intensifying competition remain potential risks.