Hesai(US:HSAI) Goldman Sachs·2025-05-28 05:00Investment Rating - The report maintains a "Buy" rating for Hesai, with a 12-month price target of US$23.3, implying an upside of approximately 9% from the current price of US$21.45 [3][32]. Core Insights - Hesai's 1Q25 results showed revenue in line with expectations and a net profit that exceeded forecasts, primarily due to a higher gross margin of 41.7% and lower operating expenses [1][3]. - The adoption of LiDAR technology in the Chinese automotive market has accelerated, leading to an increase in projected automotive LiDAR volumes for 2025 and 2026 by 23% and 37%, respectively [2][8]. - The company is well-positioned to benefit from the growing demand for advanced driver assistance systems (ADAS) and autonomous mobility, with a significant market share of 37% in 2023 [33]. Financial Performance - In 1Q25, Hesai reported revenue of Rmb525 million, a 46% increase year-over-year, with a gross profit of Rmb219 million, reflecting a 57% increase year-over-year [7]. - The non-GAAP net profit for 1Q25 was Rmb9 billion, a significant improvement compared to previous estimates of a net loss [1][7]. - The company ended 1Q25 with Rmb2.3 billion in net cash, indicating a stable financial position despite longer receivable days [4][6]. Guidance and Future Outlook - For 2Q25, management expects revenue between Rmb680 million and Rmb720 million, representing a 53% year-over-year increase [30]. - Full-year guidance for 2025 remains unchanged, with projected revenue of Rmb3 billion to Rmb3.5 billion and total shipments of 1.2 million to 1.5 million units [30]. - The company anticipates maintaining a gross margin of around 40% and achieving GAAP net profit between Rmb200 million and Rmb350 million for 2025 [30][31]. Market Trends and Competitive Position - The report highlights the rapid adoption of LiDAR in premium and mass-market vehicle models, which is expected to drive further growth in the sector [2][8]. - Hesai has secured design wins with 23 OEMs globally, indicating strong demand for its products in the ADAS segment [30]. - The company is entering a new product cycle with its ATX series, which is expected to enhance revenue growth and profitability [33].