Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Smart Driving Technology Key Points Industry Trends - The smart driving trend in China is on the rise, transitioning from Advanced Driver Assistance Systems (ADAS) to highway Navigation on Autopilot (NOA) and city NOA, which is driving product mix upgrades for Horizon Robotics [2][3] Revenue Growth Projections - Horizon Robotics targets mid double-digit revenue growth over the next three years, driven by the smart driving trend, product mix upgrades, and customer penetration [2][3] - The average selling price (ASP) of chipsets is projected to increase from approximately US$30 in ADAS to US$100 in highway NOA, and potentially up to US$500 in city NOA, or US$700 when embedded with software [2] Customer Expansion Strategy - The company is focusing on local car OEMs such as BYD, Geely, Chery, and Changan, which are gaining market share in China [2] - Horizon Robotics plans to expand into joint venture (JV) car OEMs, which are primarily still in the ADAS phase, to leverage opportunities in smart driving and access global-tier car OEMs [2] Product Development and Outlook - For 2026, the company anticipates that product mix upgrades and customer expansion will be key drivers of growth [3] - The ADAS chipset revenue is expected to remain stable, while the J6M chipset for highway NOA and J6P for city NOA are projected to expand their customer base [3] - Horizon Robotics aims to have its solutions utilized in over 1,000 Robotaxis by 2026, collaborating with leading internet companies in China [3] Competitive Advantages - The company emphasizes its full-stack capability, particularly in software and AI, which is critical for maintaining a leading market position in the smart driving sector [8] - Horizon Robotics has a strong R&D team, with software engineers outnumbering hardware engineers by 3-4 times, enhancing its ability to design effective chipsets [8] Financial Projections - The 12-month target price for Horizon Robotics is set at HK$15.30, representing a potential upside of 102.9% from the current price of HK$7.54 [11] - Revenue projections for the upcoming years are as follows: - 2024: Rmb 2,383.6 million - 2025: Rmb 3,605.4 million - 2026: Rmb 7,166.2 million - 2027: Rmb 12,264.4 million [11] Risks - Key downside risks include: 1. Increased competition or pricing pressure in the auto supply chain amid slow demand [10] 2. Slower-than-expected product mix upgrades towards AD [10] 3. Delays in customer base expansion [10] 4. Supply chain risks due to geopolitical tensions [10] Conclusion Horizon Robotics is well-positioned to capitalize on the growing smart driving trend in China, with a strong focus on product development and customer expansion. However, the company faces several risks that could impact its growth trajectory.