Core Viewpoint - ZF Group and Horizon have announced a collaboration to develop an SAE Level 3 intelligent driving system for the Chinese market, expected to be mass-produced by 2026 [1][2]. Group 1: Collaboration Details - ZF will provide its ProAI platform and system-level architecture design, focusing on hardware platform, vehicle integration, and safety validation, while Horizon will supply the Journey 6P chip with a computing power exceeding 1,000 TOPS and a complete software algorithm stack [1]. - The collaboration aims to integrate traditional chassis control advantages with intelligent decision-making, creating a closed-loop architecture that enhances the execution consistency and safety redundancy of the intelligent driving system [1]. Group 2: Performance and Market Position - The Journey 6P chip has been validated against international Tier-1 integration standards, indicating its capabilities in computing power, power management, and toolchain maturity [2]. - Horizon is transitioning from a chip supplier to a system solution provider, which is expected to enhance its average selling price (ASP) and profitability as the high-end product line's share increases [2]. Group 3: Market Expansion and Revenue Projections - With ZF's global network, Horizon is positioned to expand its overseas customer base, potentially accelerating its transition from domestic validation to global mass production [2]. - The company anticipates that overseas revenue will account for approximately 10% by 2027, with projected revenues of 34.77 billion, 59.07 billion, and 88.90 billion RMB for 2025-2027, reflecting year-on-year growth rates of 67.5%, 61.8%, and 57.9% respectively [3].

Group 1 - Haitong International has set a target price of HKD 12.5 for Horizon Robotics (09660), reflecting a 28x price-to-sales ratio for 2026, up from a previous target of HKD 12.3 at 26x [1] - Horizon Robotics has partnered with ZF Group to develop an SAE Level 3 intelligent driving system for the Chinese market, with production expected to start in 2026 [1][2] - The collaboration combines ZF's expertise in chassis and execution systems with Horizon's Journey6P chip, which has a computing power exceeding 1,000 TOPS, enhancing the system's execution consistency and safety redundancy [2] Group 2 - The partnership positions Horizon Robotics as the first Chinese intelligent driving chip manufacturer to secure core projects with both Bosch and ZF, increasing the commercial viability of its L3 products and expanding its global market reach [2] - Revenue projections for Horizon Robotics are estimated at RMB 3.477 billion, RMB 5.907 billion, and RMB 8.890 billion for the fiscal years 2025 to 2027, representing year-on-year growth rates of 67.5%, 61.8%, and 57.9% respectively [2]

Group 1 - Haitong International has set a target price of HKD 12.5 for Horizon Robotics (09660) based on a 2026 price-to-sales ratio of 28 times, reflecting a 2% increase from the previous target price of HKD 12.3 [1] - Horizon Robotics has partnered with ZF Group to develop an SAE Level 3 intelligent driving system for the Chinese market, with production expected to start in 2026 [1][2] - The collaboration combines ZF's expertise in chassis and execution systems with Horizon's advanced chip technology, enhancing the consistency and safety of the intelligent driving system [2] Group 2 - Horizon Robotics is the first Chinese intelligent driving chip manufacturer to secure core projects with both Bosch and ZF, which strengthens its commercial viability for L3 products and expands its global market opportunities [2] - Revenue projections for Horizon Robotics are estimated at RMB 3.477 billion, RMB 5.907 billion, and RMB 8.890 billion for the fiscal years 2025 to 2027, representing year-on-year growth rates of 67.5%, 61.8%, and 57.9% respectively [2]

Investment Rating - The report maintains an "Outperform" rating for Horizon Robotics with a target price of HK$12.50, up from a previous target of HK$12.30 [2][16]. Core Insights - The partnership with ZF Group validates the system-level competitiveness of Horizon Robotics' J6P chip, enhancing its commercial viability and expanding its market reach [3][5][16]. - The J6P platform has been recognized for meeting international Tier-1 integration standards, indicating its advanced performance and efficiency [4][14]. - Horizon Robotics is positioned to leverage ZF's extensive global network to accelerate overseas customer acquisition, with expectations of overseas revenue reaching approximately 10% by FY27E [5][15][16]. Financial Summary - Revenue projections for Horizon Robotics are estimated at RMB3.48 billion, RMB5.91 billion, and RMB8.89 billion for FY25, FY26, and FY27 respectively, reflecting year-on-year growth rates of 67.5%, 61.8%, and 57.9% [2][16]. - The gross profit margin is expected to decline from 77.3% in FY24 to 57.2% by FY27, indicating a shift in product mix and pricing strategy [11]. - The company anticipates a net profit of RMB -7.05 billion in FY25, with a gradual improvement expected in subsequent years [10][11].

Core Viewpoint - The automotive industry is experiencing a significant transformation driven by advancements in intelligent driving technology, with a notable increase in demand for mid-to-high-end SoC chips expected by 2025 [1][2]. Industry Summary - The intelligent driving technology is evolving through a dual approach of upward breakthroughs and downward popularization, with a clear iterative path emerging [1]. - The market for ADAS SoC chips is projected to reach 496 billion CNY in China and 925 billion CNY globally by 2028, with a compound annual growth rate (CAGR) of 28.6% and 27.5% from 2023 to 2028, indicating a high market demand [1]. - The push for "intelligent driving equality" among domestic OEMs is leading to a price war, with mainstream brands focusing on models priced below 200,000 CNY, which may open up the mid-to-high-end chip market [1]. Company Summary - Long-term prospects suggest that only leading automakers will develop their own chips, while third-party chip manufacturers may see greater market opportunities than expected [2]. - The pursuit of full-stack self-research in intelligent driving reflects a desire for efficient data processing, supply chain security, and cost reduction in intelligent driving solutions [2]. - The competitive landscape for different levels of intelligent driving solutions will be determined by factors such as cost efficiency, supplier support, and the strategic choices of companies in their self-research journeys [2]. - Black Sesame Intelligence's competitive position in the SoC ecosystem is relatively weak, but the company has strong hardware capabilities and is forming alliances to enhance its algorithmic capabilities [2]. - The management team has a forward-looking approach, with strategic plans in cross-domain computing chips and robotics, which may become a second growth driver for the company [2]. - As of the end of H1 2025, the company had a net cash position of 1.97 billion CNY, providing a solid foundation for ongoing product development and exploration of new business scenarios [2]. Financial Forecast - Revenue projections for the company from 2025 to 2027 are 850 million CNY, 1.616 billion CNY, and 2.344 billion CNY, with year-on-year growth rates of 79.23%, 90.12%, and 45.05% respectively [3]. - The company is currently in a phase of high R&D investment and customer expansion, making it difficult to achieve profitability in the short term [3]. - A price-to-sales (PS) valuation method is used for the company, with comparable companies showing an average PS of approximately 17.8x for 2025 [3]. - The company is rated as a "buy" due to its complete product ecosystem and the potential for key customer breakthroughs to drive long-term growth [3].

Investment Rating - The report assigns an investment rating of "Buy" for the company, marking its first coverage [1][6]. Core Insights - The report highlights that 2025 may be a pivotal year for the high-end SoC market, driven by the convergence of technological cycles and market demand, particularly in the context of autonomous driving [5][15]. - The company is expected to benefit significantly from the growth in the autonomous driving chip market, with projections indicating a substantial increase in market size and demand for ADAS SoC chips [5][21]. - The report emphasizes the importance of a complete product ecosystem and broad industry alliances as foundational elements for the company's growth [6][10]. Summary by Sections Market Performance - The closing price of the company's stock is reported at HKD 24.68, with a market capitalization of approximately HKD 15,782.57 million [3]. Financial Forecast and Valuation - Revenue projections for the company are set at RMB 850 million, RMB 1,616 million, and RMB 2,344 million for the years 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 79.23%, 90.12%, and 45.05% [6][8]. - The report utilizes a PS valuation method, comparing the company to peers such as Horizon Robotics, Allwinner Technology, and Mobileye, with an average PS ratio of approximately 17.8x for 2025 [6][8]. Industry Dynamics - The report discusses the increasing penetration of intelligent driving technologies in lower-end vehicle segments, indicating a shift towards more affordable autonomous driving solutions [10][25]. - It notes that the competitive landscape for high-end autonomous driving chips is currently dominated by companies like NVIDIA, but domestic manufacturers are gaining market share due to increased R&D investments and a focus on local supply chains [26][28]. Product Ecosystem and Strategic Alliances - The company is actively building a robust hardware product matrix and forming strategic alliances with algorithm companies to enhance its competitive edge [10][20]. - The management team is recognized for its forward-looking strategy, which includes expanding into cross-domain computing chips and robotics, potentially creating a second growth driver for the company [10][20].

Core Viewpoint - Goldman Sachs maintains a "Buy" rating for Horizon Robotics-W (09660), raising the target price from HKD 14.11 to HKD 15.3, which corresponds to an enterprise value to EBITDA multiple of 28 times [1] Group 1: Product Development and Applications - Horizon Robotics' Journey 6 platform is seeing increased applications in new vehicle models, including J6P and Super Drive High-Level Intelligent Driving (HSD) for Chery Automobile (09973) Exeed ET5, J6E for SAIC MG4530, and J6M for Changan Automobile (000625.SZ) Q07 and Geely Automobile (00175) Galaxy A7, enabling high-speed and urban navigation assistance driving (NOA) [1] - The J6P and HSD have already entered mass production in Chery Exeed ET5, with deliveries starting next month [1] Group 2: Market Outlook and Product Strategy - The company offers a comprehensive system-on-chip (SoC) platform solution ranging from 5 TOPS to 560 TOPS, covering various price segments and providing integrated hardware and software solutions based on customer needs [1] - There is optimism regarding the company's increasing shipment volumes and the transition of its product mix towards high-end SoCs [1]

Core Viewpoints - The company achieved a sales revenue of 1.567 billion yuan in the first half of 2025, representing a year-on-year growth of 67.06%, while the net profit was -5.233 billion yuan, compared to -5.089 billion yuan in the same period last year [1] - The market share for basic and overall assisted driving solutions among Chinese car manufacturers reached 45.8% and 32.4% respectively, maintaining the leading position [1] - The company’s processor shipments doubled to 1.98 million units, with hardware supporting highway assisted driving reaching 980,000 units, a sixfold increase from the previous year [1] Financial Performance - The sales gross margin and net margin for the first half of 2025 were 65.36% and -334.00% respectively, down from 79.04% and -543.59% in the same period last year [1] - Research and development expenses increased by 62% year-on-year, primarily due to rising cloud service costs and increased salaries for R&D personnel [1] Market Expansion - As of June 2025, the company has secured nearly 400 new model designations, with over 100 models featuring highway assisted driving capabilities [2] - The company is actively developing the HSD solution to address more complex driving scenarios, which has already received designations from multiple vehicle manufacturers [2] Profit Forecast and Investment Recommendations - Revenue projections for the company are estimated at 3.524 billion yuan, 5.254 billion yuan, and 7.898 billion yuan for 2025, 2026, and 2027 respectively, with net profits expected to be -1.836 billion yuan, -1.019 billion yuan, and 0.211 billion yuan [3] - The company is viewed positively as a key supplier of domestic intelligent driving chips and algorithms, benefiting from the trend of automotive intelligence [3]

Core Viewpoint - In the first half of 2025, the company achieved a revenue of 1.57 billion yuan, representing a year-on-year growth of 67.1% [2][6][7] Revenue and Profitability - The company's net profit for the first half of 2025 was -5.23 billion yuan, slightly worse than -5.10 billion yuan in the first half of 2024 [2][7] - Adjusted operating loss was -1.11 billion yuan, compared to -820 million yuan in the same period last year [2][7] - The gross profit margin for the first half of 2025 was 65.36%, a decrease of 13.7 percentage points year-on-year [3][15] - The net profit margin improved by 209.6% year-on-year, reaching -334% [3][15] Business Segmentation - Revenue from automotive solutions was 1.516 billion yuan, an increase of 66.1% year-on-year [11] - Revenue from automotive product solutions surged by 250.0% to 778 million yuan, driven by the rapid growth in shipments of the Chengcheng 6 series hardware [11] - Revenue from licensing and service business was 738 million yuan, up 6.9% year-on-year, as more clients integrated the company's IP into their software stacks [11] - Non-automotive solutions revenue reached 50 million yuan, a significant increase of 134.5% [11] Market Position and Growth Drivers - The company maintained the leading market share in basic and overall assisted driving solutions in China, with shares of 45.8% and 32.4% respectively [20] - The shipment volume of the Chengcheng series hardware reached 1.98 million units, doubling year-on-year [3][22] - The number of new model approvals reached nearly 400, with over 100 models approved for highway-assisted driving and above [3][22] Product Development and Partnerships - The Chengcheng 6 series chips are accelerating in mass production, with abundant orders on hand [4][6] - The company is collaborating with Bosch to develop a new multifunctional camera platform based on the Chengcheng 6B, expected to enter mass production by mid-2026 [5][33] - The Horizon SuperDrive (HSD) system, based on the Chengcheng 6P, is set to become a benchmark for urban assisted driving solutions [30][35] Global Expansion and Future Outlook - The company is expanding its global business layout and deepening cooperation with leading international automotive manufacturers [47] - The expected cumulative shipment of the Chengcheng series processing hardware is projected to exceed 10 million units by 2025, marking a significant milestone for the company [32][40]

Core Viewpoint - Black Sesame Intelligence is a pioneer in domestic intelligent driving solutions, focusing on mid/high computing power chips for passenger vehicles, while gradually expanding into low computing power product lines and multi-end applications [1] Financial Performance - In 1H25, the company achieved revenue of 253 million yuan, a year-on-year increase of 40.4%, with revenue from assisted driving solutions reaching 234 million yuan, up 41.6% year-on-year [1] - Gross margin decreased by 25.2 percentage points to 24.8%, primarily due to increased hardware component and labor costs from the expansion of assisted driving products [1] - R&D and management expenses were 620 million yuan and 170 million yuan, respectively, down 10.1% and 6.8% year-on-year [1] - The company reported a net loss attributable to shareholders of 762 million yuan [1] Product Development and Market Position - The company is expanding its AI low-power chip product line through acquisitions based on its Huashan/Wudang chip series [1] - The intelligent driving chip business includes three core series: A1000, C1200, and A2000, with A1000 already implemented in several models from Geely and Dongfeng [1] - The C1200 chip has completed functions for highway and urban memory navigation, set to be mass-produced with multiple leading new energy vehicle manufacturers [1] - The A2000 chip supports Transformer/VLA large model algorithms, focusing on urban NOA scenarios, with expected mass production by the end of the year [1] Strategic Partnerships and Market Expansion - The company continues to deepen collaborations with leading automakers such as Geely, BYD, Dongfeng, and FAW, and has secured new overseas model contracts in 1H25, with plans to start overseas sales in the second half of the year [2] - In the commercial vehicle sector, the company has partnered with most major clients, covering light trucks, heavy trucks, and specific route unmanned vehicles, which is expected to further enhance market share [2] - The company is also expanding its chip applications in the L4 field and has delivered L4-level autonomous driving solutions in ports and parks [2] Future Outlook and Valuation - The company is expected to accelerate shipment volumes in 2025 due to strengthened partnerships with major manufacturers [2] - Revenue projections for 2025, 2026, and 2027 are 840 million yuan, 1.42 billion yuan, and 2.04 billion yuan, representing year-on-year growth of 76.8%, 69.3%, and 44.0% respectively [2] - The company maintains a target price of 24.46 HKD based on a 2025E 17.0X PS valuation, with a "buy" rating [3]