The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, July 6 (Reuters Breakingviews) - Hong Kong's latest robotaxi listing includes collision control. Momenta Global 6880.HK sells assisted- and autonomous-driving software but more carmakers are following Tesla TSLA.O and Xpeng's 9868.HK lead developing the tech in-house. That may have slammed the brakes on the startup's $9 billion IPO valuation, but its independence may ultimately prove an advantage.

Momenta, led by founder and CEO Cao Xudong, has a garage of auto clients for its assisted driving solutions, including Toyota 7203.T and BYD 002594.SZ. That fueled the company's 72% gross margin last year - more than double its Hong Kong-listed peers, namely Pony AI PONY.O, which is narrowly focused on robotaxis, and WeRide WRD.O, which is in the early stages of commercialising assisted driving products alongside its flagship robotaxis.

Assuming Momenta's revenue grows at a similar rate to last year, the $9 billion price tag is 14 times 2026 sales, a chunky discount against the 20 times and 16 times implied by analysts' estimates for Pony AI and WeRide, per Visible Alpha. Those rivals' Hong Kong shares have already fallen 36% and 53% this year.

The competition does look fierce. Alphabet's GOOGL.O Waymo, Wayve, and Baidu's 9888.HK Apollo Go are also piling into robotaxis. Tesla and Xpeng are also building their own assisted driving stack. Tesla counts 1.3 million subscribers for its so-called "full self driving" system. The $110 billion BYD, meanwhile, says its "God's Eye" setup has been installed in over 2 million cars. There are only some 650,000 vehicles on the road with Momenta's solution, per its prospectus.

Yet even BYD, which has a 120,000-strong R&D department, isn't phasing out Momenta. Rather, it reserves their tech for its premium models. By working with dozens of marques, Momenta can eventually build up a fleet much larger than any single brand. That will let it gather more real-world data to further improve both assisted and autonomous driving models.

Mercedes-Benz MBGn.DE, BYD, Toyota, General Motors GM.N and Chery Automobile together will own more than 17% of Momenta's shares following the listing, a strong endorsement for the firm despite the best efforts of the auto industry's own engineers to eclipse it. That's a reassurance as the startup faces growing traffic.

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CONTEXT NEWS

Chinese self-driving technology company Momenta Global aims to raise HK$5.9 billion ($751 million) in a Hong Kong initial public offering, valuing the company at $8.9 billion, according to its prospectus released on June 29. Shares will debut on July 8.