Core Insights - 2024 is a significant year for autonomous driving companies, with 15 firms planning to go public, indicating strong market interest and potential growth in the sector [1] - The financial performance of these companies varies, with some achieving substantial revenue growth while others remain in the investment phase [2] Group 1: Financial Performance - Horizon Robotics achieved a revenue of 2.384 billion yuan in 2024, a 53.6% increase year-on-year, with a net profit of 2.347 billion yuan [3] - Black Sesame Intelligence reported a revenue of 474 million yuan, up 51.8% year-on-year, with a net profit of 313 million yuan [3] - Both companies, despite their profitability, reported adjusted net losses of 1.681 billion yuan and 1.304 billion yuan respectively, indicating ongoing financial challenges [4] Group 2: R&D Investment - R&D investment is a significant concern in the industry, with Black Sesame's R&D spending reaching 1.435 billion yuan, a 5.3% increase from 2023, and Horizon's R&D investment at 3.156 billion yuan, a 33.4% increase [4] - Horizon's R&D expenditure accounted for 132.4% of its total revenue, highlighting the heavy financial burden of innovation in the sector [4] Group 3: Market Trends and Challenges - The L2 level assisted driving function installation rate in new energy passenger vehicles reached 67.8% in 2024, a 12.5 percentage point increase from 2023, indicating growing market adoption [3] - The L4 level autonomous driving market, represented by Robotaxi services, is experiencing slower development compared to L2, despite significant policy support and market potential [5][7] - Small Horse Intelligent and WeRide reported revenue growth of 4.35% and a 10% decline respectively, with both companies still in a loss-making position [6] Group 4: Future Outlook - The Robotaxi market is projected to reach 488.8 billion yuan in China by 2030, indicating substantial future growth potential [7] - Small Horse Intelligent aims to achieve breakeven on a per-vehicle basis by 2025, emphasizing the need for expanded operational scale to support high R&D costs [7]

Investment Rating - The report maintains a "Recommendation" rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [2][8]. Core Insights - The company reported a revenue of 2.384 billion yuan for 2024, representing a year-on-year increase of 54%. The net profit attributable to shareholders was 2.347 billion yuan, a 134.8% increase year-on-year, although the adjusted net profit showed a loss of 2.33 billion yuan, worsening by 270 million yuan year-on-year [2][8]. - The company is experiencing rapid revenue growth driven by increased demand from downstream customers, with significant contributions from both product solutions and authorized services [8]. - The company is focusing on R&D investments to build a technological moat, despite facing losses in adjusted net profit [8]. - The report forecasts continued growth in both volume and price for the company's product solutions in 2025, with expectations of significant increases in average selling prices due to the introduction of higher-tier products [8]. Financial Summary - For 2024, the company achieved a gross margin of 77.3%, up 6.7 percentage points year-on-year, primarily due to a shift in revenue structure favoring higher-margin authorized services [8]. - The company’s total expenses for 2024 were 4.746 billion yuan, accounting for 176% of revenue, with R&D expenses alone reaching 3.16 billion yuan, which is 132% of revenue [8]. - The financial projections for 2025-2027 estimate revenues of 3.67 billion, 5.66 billion, and 8.18 billion yuan, with corresponding growth rates of 54.0%, 54.3%, and 44.4% respectively [8][9].

Core Viewpoint - Daiwa's report indicates that Horizon Robotics (09660.HK) is expected to be one of the least affected companies in the automotive supply chain by U.S. tariffs, with a focus on the rising average selling price driving revenue growth in 2023 [1] Group 1: Revenue Growth Drivers - The company is projected to deliver 3.9 million chips in 2025, representing a year-on-year increase of 34% [1] - The average selling price of the chips is expected to reach 391 RMB in 2025, a significant increase of 71% compared to 229 RMB in 2024 [1] - The trend towards advanced driver-assistance systems is anticipated to benefit the company significantly [1] Group 2: Investment Outlook - Daiwa maintains a target price of 6.5 HKD and reiterates a "buy" rating for Horizon Robotics [1] - The end of the company's lock-up period on April 24 is seen as a favorable entry point for investors [1] - The company is expected to find more ways to monetize its software capabilities starting in 2025 [1]

Investment Rating - The report initiates coverage with a "Buy" rating for Horizon Robotics (9660.HK) [5]. Core Views - Horizon Robotics is positioned as a leading provider of intelligent driving solutions, leveraging its extensive mass production experience and innovative product offerings to capitalize on the growing demand in the automotive sector [5][8]. - The company is set to benefit from the upcoming series of new products, particularly the Journey 6 series, which is expected to enhance its market share and revenue growth significantly by 2025 [5][19]. - Strategic partnerships with major automotive manufacturers such as BYD, Volkswagen, and Li Auto are crucial for Horizon's growth, enabling it to expand its influence in both domestic and international markets [5][40][42]. Summary by Sections 1. Intelligent Driving Solutions Provider - Horizon Robotics, founded in 2015, focuses on intelligent driving solutions, integrating algorithms, dedicated software, and processing hardware to create a comprehensive product matrix [8][9]. - The company has shipped over 7 million units of its intelligent driving chips, showcasing its capability in mass production [5][8]. 2. Journey 6 and Full-Scene Intelligent Driving Solutions - The Journey 6 series, launched in April 2024, represents a significant upgrade in Horizon's product line, designed to meet diverse intelligent driving needs with a scalable architecture [19][21]. - The Journey 6 series offers a computing power range from 10 TOPS to 560 TOPS, catering to various levels of intelligent driving applications [21][22]. 3. Flexible Cooperation Model - Horizon employs a flexible cooperation model, including IP licensing, computing solutions, and joint development, to meet the diverse needs of its clients [5][36]. - The company has established significant partnerships with leading automotive manufacturers, enhancing its market presence and revenue potential [5][40][42]. 4. Industry Opportunities - The intelligent driving sector is poised for rapid growth, driven by initiatives from major players like BYD and Tesla, which are expected to accelerate the adoption of intelligent driving technologies [5][44]. - Horizon holds a leading market share of 33.97% in the domestic intelligent driving computing solutions market, positioning it well to capitalize on the industry's expansion [44]. 5. Profit Forecast and Investment Recommendations - Horizon's revenue is projected to grow significantly, with expected net profits of -2.2 billion, -1.4 billion, and 0.5 billion RMB for 2025, 2026, and 2027 respectively [5][4]. - The report suggests that Horizon's innovative product cycle and favorable market conditions will enhance its profitability in the coming years [5][4].

Investment Rating - The report assigns an "Outperform" rating to the company [8]. Core Views - The company is expected to lead in high growth revenue in 2024, driven by the launch of the Journey 6 series, which will be adopted by over 20 automotive manufacturers and brands, covering a wide range of vehicle types from economy to luxury [9][12]. - The company aims to democratize advanced driving technology through three strategic directions: flagship high-level driving systems, mainstream pricing for urban NOA, and enhancing active safety features [9]. - The company has maintained a leading market share in the Chinese OEM ADAS market, exceeding 40%, and is positioned second in the OEM AD market with over 30% market share [11]. Financial Data and Forecast - Revenue is projected to grow significantly from 1,552 million in 2023 to 3,582 million in 2025, reflecting a year-on-year growth of 71% in 2023 and 54% in 2024 [10]. - The net profit is expected to improve from a loss of 6,739 million in 2023 to a profit of 755 million by 2027, with a notable increase of 135% in 2024 [10][12]. - The gross margin is forecasted to remain strong, with values around 77% for 2024 and beyond [10][15]. Business Segmentation - The automotive retail solutions segment is expected to generate revenue of 2,311.70 million in 2024, with a growth rate of 57% [15]. - Non-standard automotive insurance revenue is projected to decline slightly, while overall revenue is expected to grow at a compound annual growth rate of 54% from 2024 to 2027 [15]. Market Performance - The company's stock has shown significant absolute and relative growth, with a 261.7% increase over the last three months [7]. - The stock price as of April 1, 2025, was 6.40 HKD, with a market capitalization of approximately 70.886 billion HKD [4].

Core Viewpoint - In 2024, Horizon Robotics-W (09660) is projected to achieve total revenue of 2.38 billion yuan, representing a year-on-year growth of 53.6%, with a net profit of 2.35 billion yuan, and a narrowed adjusted operating loss of 1.495 billion yuan compared to 1.687 billion yuan in 2023 [1][2] Revenue and Profit Analysis - The company is expected to generate total revenue of 2.38 billion yuan in 2024, marking a 53.6% increase year-on-year [2] - The net profit for 2024 is projected at 2.35 billion yuan, a significant recovery from a net loss of 6.739 billion yuan in 2023, primarily due to a fair value change gain of 4.677 billion yuan from preferred shares and other financial liabilities [2] - Adjusted operating loss is forecasted at 1.495 billion yuan, an improvement from 1.687 billion yuan in 2023 [1][3] Business Segment Performance - Revenue from automotive solutions is expected to reach 2.312 billion yuan in 2024, reflecting a year-on-year increase of 57.2% [2] - Revenue from automotive product solutions is projected at 664 million yuan, up 31.2% year-on-year, driven by increased delivery volumes [2] - Revenue from licensing and service business is anticipated to be 1.658 billion yuan, a 70.9% increase, attributed to high demand for algorithms, software development tools, and technical services [2] Cost Efficiency and Profitability - The company's gross margin is expected to be 77.25% in 2024, an increase of 6.7 percentage points year-on-year, driven by a higher proportion of high-margin licensing and service revenue [3] - Gross margins for different business segments are projected as follows: automotive product solutions at 46%, licensing and service at 92%, and non-automotive solutions at 23%, with respective year-on-year increases of 2, 3, and 10 percentage points [3] - The company's operating expenses ratio is forecasted to be 176.36%, a decrease of 25.81 percentage points year-on-year [3] Delivery and Model Designation - The delivery volume for automotive product solutions is expected to reach approximately 2.9 million units in 2024, with a cumulative delivery volume of around 7.7 million units [4] - The company has secured over 100 model designations in 2024, increasing the total number of model designations to over 310 by December 31, 2024 [4] Product Development and Market Expansion - The company will launch the Journey 6 series processing hardware in 2024, aimed at enhancing advanced driver assistance and high-level autonomous driving solutions, with production starting in February 2025 [5] - The Journey 6 series has already been adopted for mass production by BYD's Tian Shen Eye C and will be implemented across more than 20 automotive manufacturers and brands [5] - From 2025 onwards, over 100 models equipped with the Journey 6 series are expected to be launched, covering a wide range of market segments from domestic to international brands, and from economy to luxury vehicles [5]

Investment Rating - The report maintains an "Outperform" rating for Horizon Robotics-W [5][42] Core Insights - In 2024, Horizon Robotics-W achieved a total revenue of 2.384 billion RMB, representing a year-on-year growth of 53.6% [8][24] - The company reported a net profit of 2.347 billion RMB in 2024, a significant recovery from a loss of 6.739 billion RMB in 2023, primarily due to fair value changes in preferred shares and other financial liabilities [8][24] - Adjusted operating loss narrowed to 1.495 billion RMB in 2024 from 1.687 billion RMB in 2023, indicating improved operational efficiency [8][24] Revenue and Profitability - The automotive solutions segment generated 2.312 billion RMB in revenue, up 57.2% year-on-year, driven by increased delivery volumes and strong demand for products [10][24] - The licensing and services business saw revenue rise to 1.658 billion RMB, a 70.9% increase, reflecting the growing demand for algorithms, software development tools, and technical services in the smart automotive sector [10][24] - The overall gross margin improved to 77.25%, up 6.7 percentage points year-on-year, largely due to a favorable revenue mix with a higher proportion of high-margin licensing and services revenue [15][24] Product Development and Market Position - The launch of the Journey 6 series processing hardware is set to empower advanced driver assistance and high-level autonomous driving solutions, with production starting in February 2025 [3][27] - Horizon Robotics has established a leading position in the Chinese OEM advanced driver assistance systems (ADAS) market, capturing over 40% market share by the end of 2024 [20][24] - The company is positioned as a key player in the high-level autonomous driving market, ranking second among independent third-party solution providers in China [20][24] Future Outlook - Revenue projections for 2025-2027 are estimated at 3.39 billion RMB, 5.34 billion RMB, and 7.45 billion RMB respectively, with expected net profits of -1.865 billion RMB, -341 million RMB, and 787 million RMB [4][42] - The report emphasizes the strong growth potential of Horizon Robotics, driven by robust demand for its products and services in the rapidly evolving smart automotive industry [42]

Investment Rating - The investment rating for the company is upgraded to "Buy" [1] Core Views - The company reported a revenue of 2.384 billion yuan for 2024, representing a year-on-year increase of 53.6%, and a net profit of 2.347 billion yuan, marking a turnaround from losses [7] - The J6 series has been fully launched, with production and delivery expected to drive long-term growth, supported by partnerships with over 20 OEM brands [7] - The company achieved a strong growth in delivery volume and an increase in gross margin, with product solution revenue rising by 31.2% year-on-year [7] - High R&D investment is strengthening the company's technological advantages, with R&D expenses increasing by 33.4% to 3.16 billion yuan [7] - The company expects to achieve cumulative shipments of over 10 million units for the J series by 2025 [7] Financial Summary - Total revenue forecast for 2025 is adjusted to 3.66 billion yuan, with a projected revenue of 5.364 billion yuan for 2026 and 8.047 billion yuan for 2027 [7] - The company’s net profit for 2025 is expected to be a loss of 2.450 billion yuan, improving to a profit of 338 million yuan by 2027 [1] - The P/E ratios for 2025, 2026, and 2027 are projected to be 26.1, 17.8, and 11.9 respectively [7]

Investment Rating - The report upgrades the investment rating of Horizon Robotics-W (09660.HK) to "Buy" [1] Core Views - The company achieved a revenue of 2.384 billion yuan in 2024, representing a year-on-year growth of 53.6%, and a net profit of 2.347 billion yuan, marking a turnaround from losses, primarily due to a 4.68 billion yuan contribution from the fair value changes of preferred shares and other financial liabilities [7] - The J6 series has been fully launched, with ongoing partnerships with over 20 OEM brands, which is expected to support long-term growth [7] - The company has a leading market share in the Chinese OEM ADAS/OEM AD market, with a market share of over 40% and 30% respectively [7] Financial Summary - Total revenue projections for 2025 and 2026 have been raised to 3.66 billion yuan and 5.37 billion yuan respectively, with a forecasted revenue of 8.05 billion yuan for 2027 [7] - The company’s gross margin improved, with product solution revenue increasing by 31.2% and service revenue by 70.9% in 2024 [7] - R&D expenses increased by 33.4% to 3.16 billion yuan in 2024, reflecting a focus on enhancing technological capabilities [7][8]

Investment Rating - The report upgrades the investment rating of the company to "Buy" [1] Core Views - The company achieved a revenue of 2.384 billion yuan in 2024, representing a year-on-year growth of 53.6%, and turned a profit with a net profit of 2.347 billion yuan, primarily due to a fair value change of preferred shares and other financial liabilities contributing 4.68 billion yuan [7] - The J6 series has been fully launched, with ongoing partnerships with over 20 OEM brands, which is expected to support long-term growth [7] - The company has a leading market share in the Chinese OEM ADAS/OEM AD market, with a market share of over 40% and 30% respectively [7] Financial Summary - Total revenue forecast for 2024 is 2.384 billion yuan, with projections of 3.659 billion yuan in 2025 and 5.365 billion yuan in 2026 [8] - The adjusted operating loss for 2024 is expected to narrow to 1.5 billion yuan, a year-on-year improvement of 11.4% [7] - Research and development expenses are projected to increase by 33.4% to 3.16 billion yuan in 2024, reflecting a focus on enhancing technological capabilities [7] Market Position - The company has secured over 310 model designations, with expectations to exceed 10 million cumulative shipments of the J series by 2025 [7] - The gross margin for product solutions and services is expected to improve, with a gross margin of 44.7% for product solutions in 2024 [7] Valuation Metrics - The price-to-earnings ratio (P/E) for 2025 is projected at 26.1, decreasing to 11.9 by 2027 [1][8] - The report anticipates a significant increase in revenue, with expectations of 8.05 billion yuan by 2027 [1][8]