Core Viewpoint - Company A has adopted a low-cost strategy and a gradual approach, avoiding large-scale investments in end-to-end solutions, which has allowed it to meet requirements with existing modular solutions [1] Group 1: Company Strategy - Company A's main strategy involves a two-phase approach using multi-sensing and prediction (map, od, occ, etc.) to maintain a competitive edge as a mid-to-low-cost supplier [1] - The company has accumulated a significant amount of relevant training data early on, making modular solutions appear to be the most cost-effective option [1] - Many Tier 1 suppliers are likely to continue with their existing production solutions unless end-to-end solutions can demonstrably outperform modular solutions across multiple fields [1] Group 2: Industry Context - The industry faces a common challenge where companies, including Company A, struggle with the high costs of advanced research and development, which impacts their ability to scale production [1] - The reliance on modular solutions is partly due to the importance of supply chain stability, as manufacturers prefer solutions that are compatible with existing ecosystems [1]

Summary of the Conference Call on Robotaxi Company Updates Company Overview - The conference call focuses on the developments of a leading Robotaxi company, Xiaoma Zhixing, which is engaged in the autonomous driving sector, specifically Level 4 (L4) automation [1][2]. Key Points and Arguments Technology and Development - Xiaoma Zhixing employs a modular and end-to-end autonomous driving solution, utilizing a Transformer architecture for perception modules, such as Bevformer, to integrate multi-sensor data [1] - The company has two data processing schemes: one relies on real data for modular thinking, while the other combines extensive simulation data with end-to-end models to supplement real-world testing [1][6] - The seventh-generation Robotaxi costs approximately 300,000 yuan, with the vehicle itself costing around tens of thousands of yuan and smart driving hardware estimated at over 200,000 yuan [1][10] - The architecture combines front and rear fusion, using three Orin X chips for various processing tasks, including radar input and scene understanding [1][11] Market Strategy and Financials - Xiaoma Zhixing plans to deploy 1,000 autonomous test vehicles by the end of 2025, primarily in Beijing, Guangzhou, and Shenzhen, which have received licenses for fully unmanned commercial operations [1][15] - The average daily order volume per Robotaxi is about 15 orders, with an average price of around 20 yuan per order. The company estimates that having over 1,000 vehicles could achieve breakeven [3][16] - The company aims to reach breakeven at the company level by the end of 2027 or 2028, potentially requiring over 100,000 vehicles [3][17] Industry Context and Competition - Traditional automakers have transitioned from CNN architectures to large model parameters, a trend also observed in autonomous driving companies, which are gradually replacing rule-based methods with model-based approaches [4] - The industry is still exploring large-scale end-to-end solutions, with companies like Tesla using a single large model for most tasks, while Xiaoma Zhixing is integrating Transformer-based technologies into its systems [5][7] - Xiaoma Zhixing is considered to be ahead of competitors like Baidu in obtaining operational licenses, with Waymo leading in the U.S. market [17][19] Challenges and Future Outlook - Despite technological maturity, commercial promotion faces obstacles, and the company is exploring ways to address these challenges [20] - The reliance on simulation data is crucial for training models, especially for corner cases that are difficult to capture in real-world testing [6][7] - The company is currently facing computational power constraints and is working on optimizing the Orin architecture for better performance [13] Additional Important Information - The company has achieved a human-to-vehicle ratio of 1:20 in some cases, indicating a significant reduction in the need for safety personnel [3][17] - The Robotaxi's operational economics include costs related to vehicle maintenance, electricity, and personnel, which are critical for understanding profitability [16]

Investment Rating - The report maintains a "Recommended" rating for the company [4][5]. Core Views - The company achieved significant growth in Q1 2025, with revenue of 3.983 billion yuan, a year-on-year increase of 15.35%, and a net profit of 411 million yuan, also up 15.47% year-on-year [1]. - The company holds a global competitive advantage in relay products, with over 50% of global relay production capacity located in China, and has established a strong market presence in high-voltage direct current and power scenarios [2]. - The company is actively expanding its overseas production capacity to mitigate trade risks, with new facilities in Indonesia and Germany expected to be operational by 2026 [3]. - The company is making progress in modular solutions, particularly in automotive electronics, with a focus on high-capacity control boxes for new energy vehicles, which have seen rapid growth in client base [4]. Financial Projections - Revenue projections for 2025, 2026, and 2027 are 16.297 billion yuan, 18.784 billion yuan, and 21.755 billion yuan, respectively, with growth rates of 15.6%, 15.3%, and 15.8% [4]. - Net profit forecasts for the same years are 1.905 billion yuan, 2.258 billion yuan, and 2.660 billion yuan, with growth rates of 16.8%, 18.5%, and 17.8% [4]. - The company's PE ratios for 2025, 2026, and 2027 are projected to be 18x, 15x, and 13x, respectively [4].