Core Viewpoint - Horizon Together, a cornerstone investor, has purchased a total of 688,200 shares of Youjia Innovation (02431) in the open market, reflecting confidence in the company's long-term business development [1][2] Group 1: Investment Activity - Horizon Together, fully owned by Horizon Robotics, has made this investment based on a long-standing collaboration with Youjia Innovation and a positive outlook on the company's future [2] - The acquisition of shares is seen as a demonstration of confidence in the company's future prospects and long-term development [2] Group 2: Company Collaboration - Youjia Innovation and Horizon Robotics have a deep collaboration in the development of intelligent driving solutions and L4 unmanned logistics vehicle solutions [1] - The partnership has led to the mass production of auxiliary driving domain controllers based on Horizon Robotics' processing hardware, which are now deployed in various leading passenger and commercial vehicle manufacturers both domestically and internationally [1]

Core Viewpoint - The Hang Seng Tech Index has shown a strong performance, with a year-to-date increase exceeding 6%, driven primarily by advancements in AI technology [1] Group 1: Market Performance - On January 6, the Hang Seng Tech Index surged over 2% during early trading, with leading stocks such as SenseTime and JD Health contributing to the gains [1] - The overall sentiment in the Hong Kong tech market is being significantly influenced by AI developments, as evidenced by the recent IPO of Biren Technology, known as the "first domestic GPU stock," which has reignited investor interest in the tech sector [1] Group 2: Market Dynamics - The debate surrounding the "AI bubble" has persisted through Q4 2025, with the Hang Seng Tech Index experiencing a prolonged period of volatility and adjustment, leading to a return of index valuations to historical lows [1] - However, with the iterative optimization of AI models and products by major internet companies, market confidence has begun to recover [1] Group 3: Investment Opportunities - The Hang Seng Tech Index ETF (513180) focuses on core Chinese AI assets, combining both hardware and software technologies, and includes major holdings such as Alibaba, Tencent, Xiaomi, Meituan, SMIC, and BYD [1] - This ETF ranks first in terms of scale among those tracking the Hang Seng Tech Index, indicating strong liquidity and investor interest [1]

Core Viewpoint - The former autonomous driving unit of DJI, now known as ZYT, is set to enter the heavy vehicle industry by 2026, marking a significant shift in focus from passenger cars to heavy-duty lorries and unmanned logistics vehicles as the commercialization of autonomous driving technology intensifies in China [1][5]. Company Developments - ZYT plans to introduce its navigate-on-autopilot feature for lorries on highways, with mass production expected in the first half of 2026, according to CEO Shen Shaojie [2]. - The company has established partnerships with major trucking firms, including Xuzhou Construction Machinery Group, Shaanxi Automobile Group, and China National Heavy Duty Truck Group, to facilitate its entry into the heavy vehicle market [3]. - A new partnership with a leading Chinese commercial vehicle manufacturer will be launched in January to design unmanned logistics vehicles utilizing ZYT's autonomous driving technology [4]. Industry Context - ZYT is entering a competitive landscape for autonomous driving in China, facing established players like Horizon Robotics and Shenzhen Yinwang Intelligent Technology, which is a spin-off from Huawei Technologies [5]. - The company aims to tap into the lucrative logistics market, positioning itself against rivals such as Pony.ai, which has also announced plans for mass production and deployment of autonomous trucks in 2026 [5]. - Originally established in 2016 as DJI's automotive division, ZYT was spun off in 2023 due to its divergence from DJI's core drone business and the impact of geopolitical tensions between China and the US [6].

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the approval of the first two L3 autonomous driving models in China, specifically from Changan and BAIC ARCFOX, marking a significant milestone in the autonomous driving industry in China [1][2]. Core Insights and Arguments - **Approval Details**: The L3 autonomous driving models are approved for limited operation on specific public roads in Beijing and Chongqing, with speed limits of 80 km/h and 50 km/h respectively, and restricted to single-lane driving [1][2]. - **Pilot Operations**: The approval is not yet available for private users; instead, the two car manufacturers will initiate pilot operations through affiliated fleet operation entities [2]. - **Technological Readiness**: The Changan model features 200MP front view cameras and 100MP surround view cameras, while the BAIC ARCFOX model includes three lidars and thirteen cameras, indicating a strong hardware readiness for L3 deployment [3]. - **Supply Chain Impact**: The approval is expected to positively impact the local smart driving supply chain, benefiting companies involved in ADAS chips, CMOS image sensors, domain controllers, and software [3]. Investment Recommendations - **Buy Recommendations**: Horizon Robotics, Pony AI, and OmniVision are highlighted as key beneficiaries of the L3 approval, with specific mentions of their products and market positions [3]. - **Market Forecast**: Shipments of automotive cameras in China are projected to reach 126 million by 2025 and increase to 343 million by 2030, indicating a growing market for automotive technology [8]. Additional Important Information - **Regulatory Context**: The Chinese government is actively promoting the adoption of autonomous technologies, as evidenced by the recent policies aimed at stabilizing and growing the automotive industry [2]. - **Future Outlook**: The limited approval for L3 functions is seen as a stepping stone towards broader acceptance and regulation preparation for future L4 robotaxi mass adoption [3]. This summary encapsulates the key points discussed in the conference call, focusing on the implications for the autonomous driving industry and the associated investment opportunities.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Electric Vehicles (EV) in China - **Current Trends**: EV demand shows resilience, with expectations of continued support for consumption into 2026, driven by government policies and market dynamics [2][9] Core Insights - **EV Market Performance**: - In November, the China passenger car market recorded sales of 2.22 million units, an 8% year-over-year decline, and a 1% month-over-month decrease [2] - EV sales increased by 4% year-over-year and 3% month-over-month, achieving a penetration rate of 59.3% [2][34] - Anticipated growth in EV demand through December due to year-end promotions and potential frontloading sales ahead of tax exemption reductions [2] - **Robotaxi Commercialization**: - Companies like Pony and WeRide plan to expand their robotaxi fleets from approximately 1,000 to 3,000 by the end of next year, with some areas achieving breakeven unit economics [3] - XPEV is set to launch three robotaxi models in 2026, indicating a clear acceleration in commercialization [3] - **Battery Market Dynamics**: - The battery trading market is currently experiencing volatility, particularly affecting smaller firms and upstream battery materials [4] - The battery segment is expected to benefit from an upcycle, with companies like CATL showing growth visibility [5] Investment Recommendations - **Preferred OEMs**: - Companies with strong product pipelines such as BYD A/H, Geely, and Leapmotor are favored due to expected policy support for domestic consumption [5][9] - **Battery Suppliers**: - CATL is highlighted for its resilience and growth potential, especially in the face of demand volatility expected in early 2026 [5] - **Autonomous Driving Enablers**: - XPeng and Horizon Robotics are well-positioned to capture growth in autonomous driving, with Joyson noted for its overseas exposure and robotics optionality [5] Additional Insights - **Market Share Trends**: - The top 10 brands in the China passenger car market captured 72% of the market share in the first ten months of 2025, indicating a competitive landscape with 144 brands vying for the remaining share [13][15] - **EV Market Share**: - The top 10 EV makers accounted for 75% of the market share in November 2025, with 50 brands competing for the remaining 25% [18] - **Discount Levels**: - The discount level for EVs slightly increased to 10.1% in November 2025, while ICE vehicles remained stable at 24.0% [26][28] - **Inventory Levels**: - The inventory indicator rose to 1.57 in November 2025, suggesting potential oversupply concerns [38] - **Future Projections**: - New model launches are expected to peak in the third quarter of 2025 and the second quarter of 2026, with EVs projected to account for 91% of new models [42] This summary encapsulates the key points from the conference call, focusing on the electric vehicle industry in China, market dynamics, investment recommendations, and additional insights that may be relevant for stakeholders.

Summary of Semiconductor Industry Conference Call Industry Overview - The semiconductor industry in Greater China is experiencing solid demand, with notable growth in integrated circuit (IC) production and import/export values. [1][2] Key Metrics - **IC Import/Export Values**: - IC import value increased by **13.9% YoY** in November 2025, compared to **10.2% YoY** in October 2025. [1][14] - IC export value rose by **34.2% YoY** and **10.5% MoM** to **US$18.5 billion** in November 2025. [10][25] - **Production Growth**: - IC production volume grew by **17.7% YoY** in October 2025, reaching **42 billion units**. [4][28] - **Revenue Growth**: - Total semiconductor revenues in October 2025 were up **20.6% YoY**, amounting to **US$19.5 billion**. [5][19] - Taiwan's semiconductor revenue growth was **18.4% YoY** in November 2025. [5][29] Market Dynamics - The increase in IC import average selling price (ASP) was **11.5% YoY** in November 2025. [1] - The days of inventory (DOI) in China's electronics sector was **55 days** in October 2025, above the average of previous years. [1][17] - The semiconductor sector is supported by advancements in generative AI, RISC V technology, and local suppliers gaining market share. [2][4] Investment Recommendations - Analysts recommend a "Buy" rating for several companies, including: - **Kematek** - **SMIC** (Target Price raised to **HK$134**) - **Hua Hong** (Upgraded to Buy) - **AMEC**, **VeriSilicon**, **Horizon Robotics** (Target Price raised to **HK$15.3**) [3][50] Equipment and Bidding Trends - Recent bidding activities from semiconductor manufacturers indicate a positive outlook for capital expenditures (capex) in the coming years. [11][41] - Specific equipment bids include photoresist stripping and inspection equipment, reflecting ongoing investments in production capabilities. [11] Additional Insights - The semiconductor test equipment import value decreased by **32.4% YoY** to **US$41.6 million** in October 2025. [9][34] - The lithography import volume saw a significant decline of **42% YoY**, while the ASP increased by **225% YoY**. [9][32] This summary encapsulates the key points from the conference call regarding the semiconductor industry, highlighting growth metrics, market dynamics, investment recommendations, and equipment trends.

Horizon Robotics Conference Call Summary Company Overview - **Company**: Horizon Robotics - **Ticker**: 9660.HK - **Industry**: Autonomous Driving Chips and Solutions Key Takeaways Shipment Projections - **2026 Estimated Shipment**: Expected to be around **5.5 million units**, representing over **30% year-over-year growth** [1][2] - **Breakdown of Shipments**: - Low-end ADAS chips: **<2 million units** - Mid-end ADAS chips: **3 million+ units** (with **BYD** and **Geely** each contributing **1 million units**) [1][2] - High-end HSD solutions: **300-400k units** [1][2] Product Launches - **HSD (High-end Solution)**: - Launching **single J6M** solution in **2026**, targeting car models priced at **Rmb100k** [1] - Expected shipment of **300-400k units** for HSD, with over half from the **J6P solution** [1][9] Financial Performance - **2025 Estimated Shipment Guidance**: Maintained at **4 million units** [3] - **Earnings Summary**: - 2023A: Net Profit: **-Rmb1,635 million**, Diluted EPS: **-0.606** - 2024A: Net Profit: **-Rmb1,681 million**, Diluted EPS: **-0.367** - 2025E: Net Profit: **-Rmb3,002 million**, Diluted EPS: **-0.227** - 2026E: Net Profit: **-Rmb482 million**, Diluted EPS: **-0.037** - 2027E: Net Profit: **Rmb2,231 million**, Diluted EPS: **0.169** [5] Pricing and Cost Structure - **HSD ASP Breakdown**: - HSD (J6P): Total ASP of **US$700** (chip: **US$500**, software: **US$200**) - HSD (dual J6M): Total ASP of **US$400** (chips: **US$200**, software: **US$200**) [5] - HSD (single J6M): Pricing under negotiation [5] Market Position and Strategy - **Investment Rating**: Rated as **Buy / High Risk** due to leading position in domestic ADAS chip supply and strong partnerships [19] - **Market Cap**: Approximately **HK$132,013 million** (US$16,960 million) [6] Risks and Challenges - **High Risk Factors**: - Limited operating history - Uncertain R&D outcomes - Competition and regulatory risks - Supply chain dependency - Customer concentration risks - Geopolitical and compliance risks - Market adoption uncertainty [21] Future Outlook - **R&D Outlook**: Expected YoY growth rate of R&D expenses to be lower than revenue growth in **2026E** [14] - **Robotaxi Development**: Requires at least **5 million units** of HSD ownership for data training, expected to take around **3 years** to achieve [12] Collaboration and Expansion - **Partnerships**: Collaboration with **KargoBot** for ADAS software, with limited expectations for truck business volume due to low sales in China [15] - **Robotics Business**: Leveraging automotive chip expertise to enter the robotics chip market, with cautious optimism for large-scale commercialization in the next **5 years** [16] Conclusion Horizon Robotics is positioned for significant growth in the autonomous driving sector, with ambitious shipment targets and product launches planned for 2026. However, the company faces substantial risks that could impact its performance and market adoption.

Core Insights - Hesai Technology has been recognized by Morgan Stanley as the only lidar company in the "Humanoid Tech 25" list, highlighting its influence in the robotics sector [1][4] - The report emphasizes that the robotics era is already in progress, with reliable perception being essential for the effective operation of robots [2] - Lidar technology is crucial for providing accurate 3D spatial perception, which is necessary for the functionality of 1.4 billion robots expected by 2050 [3] Company Positioning - Hesai has achieved significant milestones, including being the first automotive lidar company to exceed 2 million cumulative deliveries and maintaining the top market share for ADAS main lidar for nine consecutive months [4] - The company has developed four generations of proprietary ASICs, which enhance product reliability and manufacturing scalability, with production capabilities of one lidar every 10 seconds [4] - Hesai's JT-series mini 360° 3D robotics lidars have surpassed 200,000 cumulative deliveries, indicating strong market validation and adoption across various sectors [5] Industry Outlook - The demand for lidar units is projected to increase nearly 300 times from 2025 levels to support the perception needs of the anticipated 1.4 billion robots by 2050 [3] - Global robot hardware revenues are expected to reach $25 trillion by 2050, marking robotics as a significant computing and industrial platform [7] - As robotics applications expand, Hesai is positioned to play a foundational role in the development of the next generation of robotics and embodied AI [6]

Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Robotics and Autonomous Driving Technology Key Points Client Base and Partnerships - Horizon Robotics is expanding its client base and partnerships, particularly with the Journey 6P and HSD (Horizon Robotics SuperDrive) solutions [1][2] - The HSD solution is being adopted by Chery's new models, including EXCEED ET5, Fulwin T9, and iCAR V27, with expectations for mass production of additional models like FAW BESTUNE in 2026 [1][2] - The pricing for Chery EXCEED ET5 with J6P is below Rmb150k, indicating a positive outlook for the J6P/HSD solution across a wider pricing range [1] Revenue Expectations - Anticipated rising revenue contributions from the HSD solution in 2026 due to mass production and new design wins, particularly for models priced below Rmb150k [2] High-End Product Development - Horizon Robotics announced a partnership with Deeproute.AI to develop high-end ADAS/AD solutions based on the J6P platform, aiming for better experiences at lower costs [3] - The company is also collaborating with KARGBOT to develop L4 freight transportation solutions, focusing on AI models for specific scenarios [3] Financial Position and Use of Proceeds - The company completed a share placement and subscription, raising net proceeds of HK$6.4 billion, primarily for overseas expansion, intelligent driving technology development, and investments in emerging sectors [3] Industry Challenges and Solutions - Management highlighted industry challenges such as high computing costs for AI model training, talent shortages, and rapid iteration cycles [4] - Horizon Robotics launched "HSD together," an algorithm service to assist OEM and transportation clients, aiming to lower overall spending and entry barriers [7] Valuation and Price Target - The 12-month target price for Horizon Robotics is set at HK$15.30, based on an EV/EBITDA multiple of 28.0x, with a projected EBITDA growth correlation to peers [8] - Current market cap is HK$112.8 billion, with a price of HK$8.98, indicating a potential upside of 70.4% [10] Risks - Key downside risks include: 1. Increased competition or pricing pressure in the auto supply chain amid slow demand [9] 2. Slower-than-expected product mix upgrades towards autonomous driving [9] 3. Delays in customer base expansion [9] 4. Supply chain risks due to geopolitical tensions [9] Conclusion Horizon Robotics is positioned for growth through expanding partnerships and innovative solutions in the robotics and autonomous driving sectors. The company faces challenges but has strategies in place to mitigate risks and capitalize on market opportunities.

Summary of Key Points from the Conference Call on China AI Development Industry Overview - The focus is on the **China AI industry**, particularly developments in **Large Language Models (LLMs)**, computing infrastructure, and enterprise/consumer adoption of AI technologies [1][2][3]. Core Insights 1. **Investment Trends**: There is increasing investor interest in China's AI development, with discussions centered around AI investment, application, and domestic substitution, particularly in chips [1]. 2. **LLM Capability**: By 2026, it is expected that China's domestic LLM capabilities will rapidly iterate and catch up with US counterparts [1]. 3. **Monetization Paths**: China and the US are following similar monetization paths for AI, with cloud services and advertising being the most visible areas for growth [1]. 4. **Infrastructure Development**: Continued localization of computing power is anticipated, with improvements in chip performance and supernodes taking on more inference and training workloads [1][2]. Financial Metrics - **CAPEX Comparison**: In Q325, major Chinese cloud providers' CAPEX was 10% of their revenue and 50% of their operating cash flow, compared to 27% and 71% for US hyperscalers. The estimated combined CAPEX of China's internet leaders is around **Rmb400 billion** in 2025, about one-tenth of US peers, while achieving comparable LLM performance [2][24]. AI Disruption Risk 1. **Gradual Disruption**: The pace of AI disruption in China is expected to be gradual due to a fragmented chatbot landscape and high entry barriers in vertical industries [3][27]. 2. **Chatbot Landscape**: Unlike the US, where ChatGPT has a dominant position, China's chatbot apps like Doubao and DeepSeek have not yet consolidated, leading to a more balanced bargaining power between AI apps and vertical platforms [27]. Preferred Stocks - **Investment Recommendations**: The report highlights **Tencent** and **Alibaba** as comprehensive AI leaders, with **Baidu** showing potential upside. Other recommended stocks include **GDS/VNET** in the IDC space and **Meitu/Kuaishou** for AI applications [4]. Strategic Updates from Key Players 1. **Alibaba**: Increasing focus on consumer-facing AI products, with the Qwen app expected to leverage advanced AI models and integrate deeper within Alibaba's ecosystem [12][13]. 2. **ByteDance**: Doubao is expected to broaden its use cases and integrate with broader ecosystems, enhancing its capabilities as a system-level AI assistant [14][15]. Future Catalysts - Anticipated catalysts for the AI sector include continued model iteration, strategic updates from key companies, and capital market updates from domestic chip companies and AI labs [10][11]. Conclusion - The outlook for China's AI industry remains positive, with expectations for accelerated adoption and monetization by 2026. The focus on prudent CAPEX, stable IDC utilization, and gradual disruption risk suggests a robust environment for investment opportunities in the sector [2][3][4].