Industry Trends - The trend of "smart driving equality" is becoming crucial in the industry, with mid-to-high-level assisted driving transitioning from a "value-added service" to a "key competitive factor" for mass-market vehicles [2] - Mid-level assisted driving features are expected to become standard in vehicles priced around 100,000 RMB, promoting the widespread adoption of assisted driving technology [2] - The automotive chip industry in China is rapidly developing, driven by the dual forces of smartization and domestic substitution [3] Business Performance - The compliance business achieved a growth rate of 150% in 2024, with Q1 2025 also showing over 100% growth [4] - The revenue for the intelligent cloud segment in 2024 is projected to be 2.254 billion RMB, reflecting a year-on-year growth of 28.96% [4] - The company aims to deepen cooperation with cloud service providers to enhance data compliance capabilities [4] Product Development - The company is transitioning from a map provider to a data and model infrastructure provider for intelligent driving [5] - The SoC chip shipments have reached 90 million units, while MCU chip shipments have surpassed 70 million units [9] - The latest SoC product, AC8025AE, has been released, offering a complete solution for parking and L2+ intelligent driving [10] Financial Outlook - The company anticipates significant losses in the short term due to talent investment, R&D costs, and intense price competition [14] - Revenue growth is expected to exceed 12% in 2024, with plans to add 3 million basic vehicle units and 600,000 integrated products by Q1 2025 [14] - The company is focused on improving operational efficiency through cost control and organizational optimization [14] Regulatory Environment - Recent regulations from the Ministry of Industry and Information Technology aim to rectify disorder in the intelligent connected vehicle industry, promoting high-quality development [8] - The company has established a strong position in the map and data compliance sectors, which are essential for the assisted driving system [8] Efficiency Metrics - The company's revenue per employee is approximately 1.68 million RMB, reflecting a year-on-year increase of over 50% [12] - The company has improved its employee efficiency from 780,000 RMB per employee to 1.68 million RMB over the past three years [7]

Core Viewpoint - The global sales of new energy vehicles (NEVs), including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles, are projected to reach 4.02 million units in Q1 2025, representing a 39% year-on-year growth [1][4]. Fundamental Analysis - Global NEV sales are expected to account for 18.4% of total automotive sales in Q1 2025, driven by favorable policies such as vehicle trade-in programs [4]. - In April, the retail sales of NEVs in China reached 905,000 units, showing a year-on-year increase of 33.9% and a penetration rate of 51.5% [4]. - Domestic NEV penetration rates for independent brands reached 72.8%, while luxury and joint venture brands had penetration rates of 23.5% and 6.8%, respectively [4]. Technical Analysis - The trend of smart technology is identified as a key driver for the upward cycle of NEVs, with over 20 automakers integrating advanced AI models into their vehicles [5]. - The penetration rate of L2-level assisted driving features in new vehicles is projected to reach 57.3% by 2024, indicating a growing adoption of smart driving technologies [5]. - The automotive parts sector is expected to see differentiated revenue and profit growth, particularly in the smart driving supply chain, with L2.5 and above smart driving models anticipated to enter a rapid growth phase by 2025 [5]. Financial Analysis - Public funds have significantly increased their holdings in the automotive sector, with the automotive industry being the most heavily weighted sector in Q1 2025 [7]. - The current allocation of funds in the automotive sector is at a historical high, indicating strong institutional confidence in the long-term fundamentals of the industry [7]. Market Outlook - The long-term outlook for the automotive sector remains positive, particularly in the areas of smart driving and smart cockpit technologies [9]. - The mid-term indicators suggest an improving fundamental trend in the automotive industry, supported by increased allocations from public funds [9].

Core Viewpoint - The Automotive Innovation Technology Exhibition (AITX) focuses on automotive technology and innovation ecosystems, emphasizing professional, business, and ecosystem aspects, particularly in electrification and intelligence [1][3]. Group 1: Event Overview - The 32nd Annual Conference and Exhibition of the China Society of Automotive Engineers (SAECCE 2025) and the AITX press conference were held on May 20, featuring over 120 planned meetings and participation from more than 200 leading automotive companies showcasing their latest technologies [1][3]. - AITX aims to become the largest and most influential global automotive innovation technology exhibition by 2030, serving as a catalyst for accelerating automotive technology innovation [5][6]. Group 2: Industry Development - China's automotive industry has shown positive growth, with production and sales exceeding 10 million units for the first time in the first four months of 2025, including 4.429 million units of new energy vehicles, marking a year-on-year growth of 48.3% [3]. - The penetration rate of new energy vehicles reached 42.7%, indicating a new phase of comprehensive market development for electric vehicles [3]. Group 3: Technological Challenges - The development of automotive technology faces challenges, particularly in solid-state batteries, which are still in the research and pilot testing stages, with significant issues related to material stability and lifecycle yet to be resolved [4]. - Advanced levels of autonomous driving (L3 and above) are still in the verification and demonstration stages, requiring substantial breakthroughs in technology, user acceptance, and safety management [4]. Group 4: Exhibition Highlights - AITX will feature eight thematic exhibition areas, including intelligent networking, new energy systems, and automotive materials, with expectations to double the exhibition area and participant scale compared to previous years [5][6]. - The event will also include a comprehensive conference system with a focus on energy-saving technologies, new energy vehicles, and intelligent connected vehicles, fostering a full-chain communication ecosystem [5][6].

Core Viewpoint - Horizon Robotics is a leading supplier of advanced driver assistance systems (ADAS) and high-level autonomous driving solutions, benefiting from the expanding market for intelligent driving solutions driven by the trend of driving equality [1][2] Group 1: Market Growth and Revenue Projections - The company is expected to achieve revenues of 3.644 billion, 5.618 billion, and 8.190 billion CNY from 2025 to 2027, with year-on-year growth rates of 52.9%, 54.2%, and 45.8% respectively [1] - The global and Chinese intelligent driving solutions market is projected to reach 1,017.2 billion and 407.0 billion CNY by 2030, with a CAGR of 49.2% and 49.4% from 2023 to 2030 [1] Group 2: Competitive Positioning - The company is one of the few suppliers that can provide both chips and algorithms, enhancing its core competitiveness [2] - The hardware offerings include the J6P and HorizonCell, providing 1,120 TOPS of computing power, positioning the company among the top tier in domestic computing power [2] - The company has established a strong customer base, with products already integrated into models from Li Auto, NIO, and Chery, and has entered partnerships with BYD, Chery, and Bosch [2] Group 3: Product Development and Market Strategy - The company is accelerating its efforts in the high-level autonomous driving market, particularly in urban NOA (Navigation on Autopilot) solutions, with plans to launch HSD in 2025 [1][2] - The company currently holds a 35.9% market share in the Chinese OEM ADAS market, ranking first, and aims to increase its presence in the urban NOA market [1]

Core Viewpoint - The smart automotive sector is experiencing accelerated penetration of intelligent technology, which is expected to drive differentiation within the industry, particularly in the automotive parts sector [1]. Group 1: Industry Insights - The Special Vehicle Industry Innovation Development Conference was held in Shiyan, Hubei from May 15 to 17, focusing on the implementation of new energy and intelligent technology, emphasizing industry chain collaboration and global layout [1]. - Data indicates that by 2024, the penetration rate of new energy special vehicles in China is projected to reach 29.8% [1]. - The automotive parts sector is expected to see a divergence in revenue and profit growth from Q4 2024 to Q1 2025, with the intelligent driving industry chain performing notably well [1]. Group 2: Market Trends - Benefiting from the increase in intelligent driving penetration, sectors such as intelligent chassis, domain control, and sensors are expected to see performance growth surpassing the industry average [1]. - The penetration rate of L2.5 and above intelligent driving models is anticipated to enter a rapid growth phase by 2025 [1]. - The passenger vehicle market is accelerating its phase-out, with leading domestic automakers and new force car companies expected to expand their market share [1]. Group 3: Commercial Vehicle Outlook - In the commercial vehicle segment, new energy buses are maintaining high demand supported by subsidy policies, while the heavy truck market shows resilience in both domestic and international demand [1]. - Gas and new energy heavy trucks are likely to continue benefiting from market conditions [1]. Group 4: ETF and Index Information - The Smart Automotive ETF (159889) rose by 1.63%, tracking the CS Smart Automotive Index (930721), which is compiled by China Securities Index Co., Ltd. and includes listed companies involved in intelligent driving and vehicle networking [1].

Core Viewpoint - The company is a leading player in the domestic third-party intelligent driving chip and solution market, with advanced integrated hardware and software technology, strategic positioning, and business model [1] Company Positioning - The company is positioned as an algorithm software company disguised as a chip manufacturer, focusing on intelligent driving solutions, aiming to become the Wintel of the robotic era [1] - The company has grown into the leading third-party intelligent driving solution provider in China since shifting its strategy in 2019 [1] - The company’s full-stack hardware and software products include chips, underlying software (BPU and toolchain), and algorithms, with the Zhengcheng series of intelligent driving chips holding the largest market share domestically [1] Financial Performance - The company is expected to deliver approximately 2.9 million units in 2024, with total revenue projected at 2.38 billion yuan, a year-on-year increase of 53.6%, and a gross margin of 77.3% [1] - Revenue from technology licensing and service business is expected to reach 1.65 billion yuan, with a gross margin of 92% [1] - Revenue for 2025 is projected to reach 3.41 billion yuan, a year-on-year increase of 43.1%, and 5.8 billion yuan in 2026, a year-on-year increase of 70.1% [3] Industry Trends - The intelligent driving sector is experiencing a shift towards increased penetration and self-sufficiency in the supply chain, which is becoming a key competitive factor in the automotive industry [2] - The penetration rate of mid-to-high-end intelligent driving configurations in passenger vehicles is expected to rise significantly, with new vehicle penetration projected to increase from approximately 10% in 2024 [2] Competitive Advantages - The company’s core competitive advantage lies in its unique integrated hardware and software model, which covers high-tech barriers and high-value-added segments of the industry [2] - The company is well-positioned to establish market dominance as the trend of intelligent driving equity develops [2] Investment Value - The market's perception of the company's investment value is primarily focused on its leading position in self-sufficient intelligent driving chips, despite concerns about potential limitations from OEMs developing their own chips [2] - The company’s intelligent driving software algorithm capabilities may be undervalued, with the HSD high-end intelligent driving solution expected to reshape market perceptions in 2025 [2] Future Growth Potential - The company is expected to achieve a compound annual growth rate of 50% over the next 3-5 years, with total revenue projected to reach 12 billion yuan by 2028 and net profit exceeding 1 billion yuan [3] - Long-term projections suggest that if the company can achieve 6 million units of high-end intelligent driving solutions and a 20%-25% global market share in mid-to-low-end intelligent driving, revenue could reach 30 billion yuan, resulting in nearly 10 billion yuan in profit [3]

今年以来，国内汽车市场延续着2024年的竞争态势，其中最为鲜明的特征就是"分化"。具体而言，新能 源车行业呈现了销量与利润的双重分化，强者恒强的态势愈发明显。 对投资者来说，在分化中寻找长期玩家，才能在快速变化的市场中挖掘确定性的投资标的。 该季度总营收220亿元，整车销售收入为191亿元，同比增长16.1%；整车毛利率16.5%，同比提升3.4个 百分点；综合毛利率19.1%，创历史新高；根据香港会计准则，极氪科技一季度盈利为5.1亿元，并连续 三个季度实现盈利。 可见极氪科技在当前高端豪华汽车市场是发展全面向好的核心玩家。分化之中，极氪科技为何能够脱颖 而出？ 在老牌车企中，吉利汽车等表现突出，合资品牌占比高的车企则逐渐势弱。而在新晋玩家中，比如极氪 科技的成绩相当吸睛。 从近期极氪智能科技(以下简称：极氪科技)发布2025年Q1财报可以看到如下数据： 极氪、领克双品牌定位分明，高价值产品贡献销量增长 极氪科技的业绩向好背后，离不开两个方面，一是产品大卖，二是不靠单纯通过低价吸引消费者。 一季度，极氪科技销量114,011台；4月销量41,316台，同比增长18.7%，环比增长1.5%；1-4月，极氪科 ...

Group 1 - The trend of intelligent driving is leading to more advanced features being integrated into lower-priced vehicles, with safety becoming a critical focus [1] - The "LiDAR" technology is now available in vehicles priced around 120,000 yuan, exemplified by the Leapmotor B10, which utilizes Hesai's ATX [1] - Hesai Technology launched the "Thousand Eyes" perception solution for L2 to L4 level intelligent driving, offering three different combinations tailored for mainstream L2 level auxiliary driving systems [1] Group 2 - Hesai also introduced a series of automotive-grade LiDAR products, including ETX ultra-long-range LiDAR, AT1440 ultra-high-definition LiDAR, and FTX pure solid-state blind-spot LiDAR [1] - Hesai is recognized as the leading player in the domestic LiDAR industry, with major clients including Li Auto, Xiaomi Auto, and BYD, with Li Auto equipping all its models with Hesai's LiDAR this year [1] - On the international front, Hesai announced a significant long-term exclusive partnership with a top European OEM, marking the largest order in the overseas front-end production LiDAR sector to date [2]

Group 1 - NIO officially launched the new ES6 and EC6 models on May 16, 2025, with reservations now open, and plans to release the new ET5 and ET5T models by the 25th [2] - The 2025 NIO "5566" series models have significant improvements in cabin experience and intelligent driving chip technology, with over 60% of NIO's total sales in 2024 coming from this series [2] - The new models are equipped with the TUTDONG Falcon series LiDAR, utilizing 1550nm wavelength technology, which offers a detection range of 500 meters and high-precision point cloud imaging, enhancing the luxury and accessibility of NIO's intelligent driving experience [2] Group 2 - TUTDONG has achieved a breakthrough in market expansion by securing a targeted order from another domestic new energy vehicle company, which focuses on the economic market segment priced between 100,000 to 200,000 yuan [2] - The order will utilize TUTDONG's Robin series products based on the 905nm technology platform, which has already been mass-produced in NIO's flagship ET9 model [3] - TUTDONG has established a clear "dual-track" strategic layout, with 1550nm technology targeting the high-end market and 905nm technology entering the broader economic vehicle sector, allowing for a competitive advantage in both segments [3]

Core Insights - The automotive industry is experiencing a shift from traditional E/E architecture to a centralized architecture, enabling companies to take control of software development and redefine vehicle core functionalities [1] - The trend towards self-developed chips is driven by the desire to capture profits from the high-margin ends of the "smile curve" (chips and algorithms) [1] - The "smart driving equality" movement initiated by BYD presents both opportunities for automakers and a historic chance for smart driving suppliers [2] Industry Dynamics - In the context of intensified competition and the saturation of smart driving solutions, automakers prioritize getting their products to market rather than focusing solely on self-development [2][3] - The window for automakers to capitalize on this trend is limited to approximately two years [3] Competitive Landscape - NVIDIA currently dominates the smart driving market with a 45.4% share, primarily due to its Orin-X chip, which is highly regarded for its AI acceleration capabilities [4] - New entrants in the market, such as Horizon and Black Sesame, have made significant advancements in chip capabilities, allowing them to compete with NVIDIA's offerings [5][8] - The validation timeline for domestic chips is only 2-3 years behind NVIDIA, indicating a narrowing gap in competition [6][8] Chip Development and Cost Analysis - The development of chips is a long-term endeavor, with significant time required for accumulation and iteration [10] - Companies need to achieve a minimum production scale and possess strong iteration capabilities to make self-developed chips economically viable [11] - Cost analysis shows that the manufacturing costs of chips vary significantly based on technology nodes, with the total cost for advanced chips reaching up to 3915 yuan [12] Data and Talent Acquisition - Automakers have a substantial advantage in data acquisition for training smart driving systems, with companies like Tesla and Huawei leading in vehicle deployment [15] - The scale of talent and internal collaboration is crucial for the development of advanced smart driving technologies, with major players employing large teams dedicated to this field [16] Conclusion - BYD, while relying on external suppliers for chips and algorithms, is actively working on self-developed smart driving solutions, indicating a trend among leading automakers to balance self-development with external sourcing [17]