Its stock slumping, Breton looks for life under mountain of debt

The company’s latest agreement will see it partner with an investment company to sell its mining-use electric dump trucks in three African countries

Key Takeaways:

• Breton has authorized Inhoyi Investments to sell its mining-use electric dump trucks in Zambia, Zimbabwe, and Mozambique
• Inhoyi will share profits from truck sales with Breton under terms of their letter of intent

By Lau Chi Hang

The Breton refers to a medieval European warhorse known for its robust physique, lightning-fast gallop, unyielding drive and boundless stamina.

So, when millennial Chen Fangming established Breton Technology Co. Ltd. (1333.HK), he hoped the company, a maker of autonomous electric dump trucks used in mining, would gallop ahead with the invincible strength of this medieval creature. Indeed, the company’s stock burst out of the gate with its Hong Kong listing in May last year, tripling from its offer price of HK$18 to HK$55.55 in just four months.

But unfortunately for both Chen and Breton, that peak was fleeting and the stock quickly went into reverse. Despite a recent rebound to the HK$20 level, it remains down more than 60% from its peak.

While this type of short-term price fluctuation is driven by fleeting market sentiment and investor perceptions, longer-term performance still hinges on fundamentals: delivering solid earnings is the only way to attract backing from more serious investors over the long haul. That’s meant that Breton, and electric vehicle makers more broadly, are increasingly being called on to prove their mettle through business performance after being powered for years on hype. Well aware of this, Breton has been trying to show it’s on the right path with a steady string of business achievements over the last year.

String of deals

Late last month, the company announced its signing of a letter of intent with Inhoyi Investments, which became the authorized non-exclusive agent for its electric trucks in the African nations of Zambia, Zimbabwe, and Mozambique. Under the agreement, Breton will sell its PV-storage and mining equipment to Inhoyi, while also providing long-term operation and maintenance services. In exchange, Inhoyi will share its profits on vehicle sales with Breton.

Founded in Zimbabwe, Inhoyi operates a global investment business with extensive market resources and channels in the African mining sector. It holds interests in rock gold ore and oxidized ore projects in Zimbabwe’s Mutare region.

The announcement got investors excited, sparking a rally that saw Breton’s shares rise from HK$12.37 beforehand to HK$20, representing a gain of more than 60%.

The tie-up was just the latest in a string of new partnerships for Breton. It announced its signing of a three-year strategic cooperation letter of intent with EV charging technology company Zhida Technology (2650.HK) in June. Under that deal, Breton said it would buy at least 5,000 high-power chargers and charging robots from Zhida. At the same time, Zhida agreed to buy at least 500 electric mining trucks from Breton, either directly or through third-party referrals.

Before that, Breton inked a two-year autonomous driving cooperation agreement with Fujian Rixin last November, with Rixin agreeing to buy 150 or more autonomous electric mining trucks from Breton. Two months earlier, Breton signed yet another agreement with Xinjiang Mingyang Mining, which agreed to buy 1,000 autonomous electric mining trucks.

Expanding PV-storage business

Beyond the steady string of purchase agreements for its core mining vehicles, Breton has also introduced related businesses providing PV-storage components and microgrid services, billing itself as an “electric equipment power systems and digital operational management” solutions provider. In the first half of this year, sales of PV-storage components and electricity generated 61.54 million yuan ($9.17 million) in revenue.

Despite these signs of progress, the reality is far less certain. The many announced partnerships remain mostly agreements or letters of intent, rather than concrete contracts, leaving uncertainty over whether both parties will ultimately follow through on the purchases. The Zhida agreement, in particular, looks more like a reciprocal product purchase deal whose profit potential, even if executed, also remains uncertain.

On the bottom line, Breton has also remained squarely in the red, logging annual losses that grew from 178 million yuan in 2022 to 318 million yuan in 2025. Its revenue edged up by just 1.2% year-on-year to 330 million yuan in the first half of 2026. Its loss narrowed during the latest six-month period to 81.64 million yuan, though a primary reason for that was an increase in government subsidies.

Debt burden

Another pressing issue for the company is its high debt. Its current loans and borrowings stood at 637 million yuan at the end of June, up 28% year-over-year, and non-current loans and borrowings reached 252 million yuan, up 12%. Meantime, its cash stood at just 249 million yuan. The company was also cash flow negative on an operating basis, with an outflow of 165 million yuan, up 11.6% from the previous year.

Faced with liquidity pressure, Breton has turned to issuing new shares. It placed 10 million shares at HK$25.08 each last November, raising net proceeds of HK$240 million ($30.6 million). This July it tapped the market again with a placement of 3.05 million shares at HK$10.08 each to raise another HK$29.5 million. And last month it issued another 16.6 million shares at HK$10.28 per share, bringing in net proceeds of HK$159 million.

While such capital raising may temporarily ease its funding pressure, the steady downward movement by Breton’s stock greatly reduces its fundraising ability by bringing in less capital for each share sold.

Furthermore, the limited size of its post-IPO fundraising offers only a stopgap measure for the heavily indebted Breton. With the controlling shareholder’s stake now down to 30.6%, further capital raising via placements could further dilute the level, and thus become less desirable for the controlling shareholder.

All said, its persistent lack of profits and tepid revenue growth could make it challenging for Breton to swing to the black anytime soon. Coupled with the fact that electric vehicle makers are no longer the market darlings they used to be, investors might want to steer clear of this type of company for now and wait for some of the purchase agreements to start bearing fruit before taking a second look.

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