ECARX(US:ECX) Huachuang Securities·2025-06-30 07:48Investment Rating - The report assigns a "Strong Buy" rating to the company with a target price of $2.51 [2][8]. Core Viewpoints - The company is positioned as a global leader in automotive intelligence solutions, leveraging its strong ties with Geely and expanding its customer base internationally. The report highlights three main investment highlights: deep integration of group and industry resources, outstanding software capabilities adaptable for global markets, and the development of third-party automotive partnerships and overseas growth [7][30][31]. Financial Performance - The company is projected to achieve total revenue of $5.561 billion in 2024, with a year-on-year growth rate of 18.3%. By 2027, revenue is expected to reach $9.334 billion, reflecting a growth rate of 24.1% [3][32]. - The adjusted EBITDA is forecasted to improve from -$2.11 billion in 2025 to $3.35 billion in 2027, indicating a potential turning point towards profitability [3][9]. - The company reported a total net loss of $932 million in 2024, which is expected to narrow to $172 million by 2027 [3][37]. Business Overview - The company, established in 2017, focuses on providing comprehensive intelligent automotive solutions, including hardware and software systems. It has developed a full-stack automotive computing platform and has expanded its client base beyond Geely to include major global automotive brands [7][14][23]. - The company has successfully integrated its products into over 8.7 million vehicles globally, with a significant increase in shipment volume of 81% year-on-year in Q1 2025 [7][27]. Industry Development - The report notes a deepening penetration of cockpit and intelligent driving domain controllers, with a trend towards integrated cockpit-driving solutions, particularly in mid-range vehicles [11][30]. - The competitive landscape is characterized by intense competition in cockpit domain controllers, while the company has achieved a leading position in intelligent driving domain controllers [11][30]. Investment Highlights - The company has established a competitive barrier through the integration of group resources and the development of a comprehensive "chip-software-vehicle" capability [8][30]. - Its proprietary Cloudpeak cross-domain software platform has been successfully deployed in the Volvo EX30 model, enhancing its international competitiveness [7][30]. - The company is leveraging its Geely customer base to develop partnerships with third-party automakers and expand into overseas markets, with notable success in Australia and New Zealand [7][30][31].