Core Viewpoint - The company has demonstrated strong revenue growth in the first half of 2025, driven by increased product delivery and robust demand for algorithm software, despite facing challenges with operating losses and declining gross margins [1][2]. Revenue Growth - In 25H1, the company achieved revenue of 1.567 billion RMB, representing a year-on-year increase of 67.6%, primarily due to higher product delivery volumes and strong demand for algorithm software [1]. - The revenue from product solutions reached 778 million RMB, a significant increase of 250.0% year-on-year, driven by the doubling of chip shipments [2]. - The company's licensing and service business generated 738 million RMB in revenue, reflecting a year-on-year growth of 6.9% due to stable IP licensing and increased customer demand [3]. Profitability Metrics - The gross profit for 25H1 was 1.024 billion RMB, up 38.6% year-on-year, with a gross margin of 65.4%, which is a decline of 13.6 percentage points compared to the previous year [1]. - The adjusted operating loss expanded to 1.592 billion RMB, with a net loss of 5.233 billion RMB, largely due to changes in the fair value of preferred shares and other financial liabilities [1]. Product Solutions and Market Position - The company has established a leading position in the Chinese OEM ADAS market with a market share of 45.8% for front-view integrated machines and 32.4% for overall ADAS solutions [2]. - The shipment of mid-to-high-end intelligent driving chips reached 980,000 units, accounting for 49.5% of total shipments, significantly increasing the average selling price (ASP) of automotive products and solutions [2]. - The Horizon Superdrive (HSD) solution has been upgraded to a more advanced architecture and is set to be launched in vehicles, indicating potential growth in the Robotaxi supply chain [2]. Non-Automotive Solutions - The revenue from non-automotive solutions was 50 million RMB, showing a year-on-year increase of 134.5%, with expectations for growth in the "embodied intelligence" sector through the "Xuri" series of robotic chips [3]. Future Outlook and Valuation - The company is projected to benefit from the ongoing growth in intelligent driving demand and strategic partnerships with global leaders, with revenue forecasts for 2025-2027 set at 3.56 billion, 5.36 billion, and 7.936 billion RMB respectively [3].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding the market benchmark by more than 15% over the next 6-12 months [6]. Core Insights - The company achieved strong revenue growth in H1 2025, with total revenue reaching 1.567 billion RMB, a year-on-year increase of 67.6%, driven by higher product delivery volumes and strong demand for algorithm software [1]. - The gross profit for H1 2025 was 1.024 billion RMB, reflecting a 38.6% increase year-on-year, although the gross margin decreased by 13.6 percentage points to 65.4% due to a significant rise in the proportion of automotive product solutions [1]. - Adjusted operating losses widened to 1.592 billion RMB in H1 2025, compared to 820 million RMB in H1 2024, with a net loss of 5.233 billion RMB primarily due to changes in the fair value of preferred shares and other financial liabilities [1]. Revenue Breakdown - The company's product solutions segment saw revenue of 778 million RMB in H1 2025, a remarkable year-on-year increase of 250%, with a gross margin of 45.6% [2]. - The "Zhengcheng" series chips achieved a shipment volume of 1.98 million units in H1 2025, doubling year-on-year, with a cumulative shipment exceeding 10 million units by August 2025 [2]. - The company holds the leading market share in China's OEM ADAS market at 45.8% and 32.4% in the overall OEM autonomous driving solutions market [2]. Profitability Forecast and Valuation - The revenue forecasts for 2025 to 2027 are projected at 3.560 billion RMB, 5.358 billion RMB, and 7.936 billion RMB, respectively, with corresponding price-to-sales ratios of 28x, 19x, and 13x based on the stock price of 7.94 HKD as of August 27 [4]. - The company is expected to benefit from the ongoing growth in intelligent driving demand and strategic partnerships with leading global firms, which will enhance its product pricing and brand strength [4].

Investment Rating - The report maintains a "Buy-A" rating for the company [2][4] Core Views - The company reported a revenue of 1.567 billion, a year-on-year increase of 67.6%, while operating losses expanded to 1.59 billion [1] - The upcoming mass production of the HSD advanced driver assistance product is expected to open new growth opportunities, with initial deployment on the Chery Xingji Yuan E05 [1] - The company has made significant progress in overseas expansion, securing model designations from two Japanese OEMs for markets outside China, potentially leading to over 7.5 million units in lifetime shipments [1] Financial Performance - Revenue from product solutions increased significantly by 249.97% to 778 million, with hardware shipments doubling to 1.98 million units [7] - The adjusted operating loss for the first half of 2025 was 1.11 billion, reflecting an increase in R&D expenses to 2.3 billion, up 62% year-on-year [7] - The gross margin for the first half of 2025 was 65.36%, a decrease of 13.76 percentage points year-on-year due to changes in revenue structure [7] Future Projections - Revenue projections for 2025 to 2027 are estimated at 3.52 billion, 5.48 billion, and 8.02 billion respectively, with growth rates of 47.6%, 55.8%, and 46.3% [2][9] - The target market capitalization is set at 123.2 billion RMB, with a target price of 9.66 HKD [2]

Core Insights - The article discusses the initiatives taken by the People's Bank of China Shanghai Headquarters to support the development of a globally influential technology innovation center in Shanghai through a diversified financial ecosystem for technology enterprises [1][2][6]. Group 1: Financial Ecosystem Development - The Shanghai Financial Innovation Alliance aims to provide a comprehensive financial service model for technology enterprises, targeting a total investment of 2 trillion yuan over three years through various financial instruments [2][6]. - The "stock-loan-debt-guarantee" linkage model is emphasized as a core strategy to support technology enterprises throughout their lifecycle, ensuring that financial services are not interrupted by changes in business stages or financial needs [2][3]. Group 2: Customized Financial Solutions - Financial institutions like Industrial and Commercial Bank of China (ICBC) have tailored financial products for startups, including a 5 billion yuan special financing quota and 2 billion yuan in equity investment for participants in innovation competitions [1][4]. - The Bank of China has developed a "stock-loan linkage" business model, providing equity financing and other financial services to unicorn companies facing significant funding needs due to long R&D cycles [2][4]. Group 3: Collaborative Financial Services - Various banks, including China Construction Bank and Agricultural Bank of China, have launched integrated financial service models that combine investment, loans, and guarantees to create a comprehensive support system for technology enterprises [3][5]. - The Shanghai Financial Innovation Alliance has established strategic partnerships with local incubators and industry parks to create an ecosystem that integrates capital, technology, and resources [7][8]. Group 4: Innovative Financial Products - The "New Power Loan" product is designed for new productivity enterprises, offering diversified financing options and utilizing central bank monetary policy tools to provide low-cost funding [7]. - The "Innovation Loan" product, developed by ten banks in Shanghai, aims to meet the financing needs of technology enterprises at different stages through a "investment-loan linkage" credit package [7].

Investment Rating - The report initiates coverage with a "Buy" rating for Horizon Robotics, setting a target price of HK$8.60, representing a potential upside of 33% from the current price of HK$6.46 [1][6][10]. Core Insights - Horizon Robotics is positioned as a key beneficiary in the high-end assisted driving industry, with a strong market share exceeding 40% in China's OEM advanced driver assistance systems (ADAS) market as of 2024 [7][29]. - The company is expected to benefit significantly from the global growth potential of smart driving, with projections indicating that global and Chinese smart vehicle sales will reach approximately 80 million and 30 million units by 2030, respectively [7][29]. - The unique BPU (Brain Processing Unit) architecture of Horizon Robotics provides a competitive edge by optimizing hardware and software collaboration, achieving higher computational efficiency at lower power consumption [30][42]. Financial Projections - Revenue forecasts for Horizon Robotics are projected at RMB 3.43 billion, RMB 5.41 billion, and RMB 7.46 billion for the years 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 43.7%, 57.9%, and 37.9% [9][31]. - The company is expected to achieve profitability in 2027, with a projected net profit of RMB 901 million, following losses in the preceding years [9][31]. Market Comparison - The report compares Horizon Robotics with peers such as NVIDIA, ARM, Mobileye, and Black Sesame Intelligence, applying a 20x price-to-sales (P/S) ratio to derive the target price [32][71]. - The competitive landscape indicates that Horizon Robotics has established itself as a leader in the mid-to-low-end smart driving hardware market, with plans to penetrate the high-end market further with the launch of the Journey 6 series chips [71][72]. Product Solutions - Horizon Robotics offers three main smart driving solutions: Horizon Mono, Horizon Pilot, and Horizon SuperDrive, catering to different levels of driving assistance [44][60]. - The Journey 6 series chips, set to launch in 2025, will cover a wide range of smart driving needs, enhancing the company's product matrix [62][67].

Group 1: TMT Industry Insights - The report highlights that with the improvement of L3 level regulations by 2025, L2+ and above intelligent driving technologies are expected to accelerate penetration, benefiting third-party SoC manufacturers [1] - The trend of "chip embedding" is anticipated to bring high growth certainty to the industry, with recommendations for leading global and domestic SoC companies such as Nvidia and Horizon Robotics [1] Group 2: Real Estate Market Analysis - In the first four months, the total area of residential land transactions in 100 cities reached 56.67 million square meters, a year-on-year increase of 1.5%, with an average transaction floor price of 7,738 yuan per square meter, up 20.2% year-on-year [2] - The 30 core cities saw a total residential land transaction area of 27.74 million square meters, a year-on-year increase of 7.9%, with an average transaction floor price of 13,318 yuan per square meter, up 28.5% year-on-year [2] - The overall premium rate for residential land transactions in the 30 core cities was 17.2%, an increase of 11 percentage points year-on-year, indicating a rise in market activity [2] Group 3: Internet Media Company Overview - The report covers Multi-Point Intelligence, a SaaS company focusing on the digital transformation of local retailers, which possesses significant industry experience and data barriers [3] - Revenue growth projections for the company from 2025 to 2027 are 16.7%, 17.2%, and 16.4% year-on-year, with corresponding PS valuation multiples of 3.4x, 2.9x, and 2.5x [3] - The forecasted Non-IFRS net profits for the company are 122 million, 271 million, and 408 million yuan for the years 2025 to 2027 [3] Group 4: Software and Robotics Sector - The report discusses the launch of the Kaihong Bot series by China Software International, emphasizing the ongoing development of the open-source Hongmeng ecosystem [4] - The net profit forecasts for China Software International from 2025 to 2027 are 640 million, 750 million, and 870 million yuan, respectively [4] Group 5: Pharmaceutical Company Insights - The report indicates that the company Lao Bai Xing is focusing on optimizing store layouts and expanding its franchise business while integrating a digital system [6] - The projected net profits for Lao Bai Xing from 2025 to 2027 are 702 million, 841 million, and 955 million yuan, reflecting year-on-year growth rates of 35%, 20%, and 14% [6] Group 6: Travel Industry Performance - Tongcheng Travel reported a revenue of 4.377 billion yuan in Q1 2025, a year-on-year increase of 13.2%, with an adjusted net profit of 788 million yuan, up 41.1% year-on-year [7] - The adjusted net profit forecasts for Tongcheng Travel for 2025 to 2027 are 3.393 billion, 4.060 billion, and 4.647 billion yuan, with corresponding PE ratios of 13, 11, and 10 times [7]

Investment Rating - The report initiates coverage on Horizon Robotics with a "Buy" rating, setting a target price of HKD 9.28 based on a 31.1X PS for 2025 [1][7][5]. Core Views - Horizon Robotics is a leading supplier of advanced driver assistance systems (ADAS) and autonomous driving solutions, focusing on empowering vehicles and robots through intelligent solutions [14][23]. - The company is expected to benefit from the rapid growth of high-level assisted driving functions driven by major automakers like Li Auto, BYD, and Volkswagen [1][2]. - The domestic market for intelligent driving SoC chips is projected to grow significantly, with the market expected to expand from approximately USD 2 billion in 2024 to USD 6.2 billion by 2030 [2]. Company Overview - Horizon Robotics has a complete product matrix and strong software delivery capabilities, with a focus on high-performance chips and proprietary algorithms [3][14]. - The company has achieved significant milestones, including the mass production of various chip series and partnerships with major Tier 1 suppliers [4][14]. - The company’s revenue is projected to grow significantly, with expected revenues of RMB 3.66 billion, RMB 5.54 billion, and RMB 7.82 billion for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 53%, 51%, and 41% [5][6]. Market Dynamics - The intelligent driving industry is entering a high-growth phase, with the penetration rate of advanced intelligent driving expected to increase rapidly [2][20]. - Domestic chip suppliers are well-positioned to meet the demand for cost-effective and reliable solutions, which aligns with the needs of downstream automakers [2][21]. - The report highlights the potential for Horizon Robotics to expand into international markets, particularly as domestic brands seek to innovate globally [21][24]. Financial Projections - The company is expected to achieve a chip shipment volume of 4 million, 5.22 million, and 6.93 million units in 2025, 2026, and 2027 respectively, with corresponding revenues of RMB 3.66 billion, RMB 5.54 billion, and RMB 7.82 billion [5][6]. - The report anticipates a significant increase in average selling price (ASP) per vehicle as the company scales its operations and introduces new algorithms [20][21]. Competitive Landscape - Horizon Robotics faces competition from international players like Mobileye and NVIDIA, but the report suggests that its domestic advantages in cost and supply chain reliability will be beneficial [4][21]. - The company has established partnerships with leading global Tier 1 suppliers, which may enhance its competitive positioning in the international market [21][24].

Group 1: Macroeconomic Insights - Recent increase in overseas ultra-long-term government bond yields, with Japan's 30-year bond yield reaching 3.15% and the US 30-year bond yield at 5.08%, the highest since October 2023 [2][4] - Concerns over inflation and fiscal policies are driving the rise in yields, with expectations of a potential short-term pullback in Japanese bond yields after temporary factors dissipate [2][4] - The report suggests that the long-term outlook for US Treasury yields may remain elevated [2] Group 2: Currency Dynamics - The US has adjusted tariffs, leading to a slight rebound in the US dollar index and a 0.5% increase in the RMB against the USD [3] - The report indicates that the RMB may have upward appreciation potential due to structural rebalancing in global asset allocations, particularly in Asia [3] Group 3: Fixed Income Market - Global bond yields have risen, with Japan's 10-year bond yield increasing to 1.53% and the US 10-year bond yield reaching 4.58% [4] - The report highlights that the rise in yields is influenced by various factors, including uncertainty surrounding tariff policies and inflation expectations [4] Group 4: Real Estate Sector - The report discusses the "pre-sale + current sale" model used in many overseas real estate markets, emphasizing the importance of third-party fund supervision to protect buyers [5] - This model ensures that most payments are made after project completion, reducing the risk of fund misappropriation [5] Group 5: Oil and Gas Sector - Oil prices have rebounded due to revised demand expectations following tariff reductions and OPEC+ production adjustments, with WTI and Brent prices rising by 5.8% and 2.8% respectively [6] - The report notes that trade tensions and OPEC+ production strategies are key short-term factors affecting oil prices [6] Group 6: Hong Kong Market Dynamics - The report highlights the recent surge in liquidity in Hong Kong's banking system, driven by currency interventions and successful IPOs, such as that of CATL [6] - It suggests that Hong Kong's market may benefit from a structural shift in global capital flows, particularly in the context of de-dollarization [6] Group 7: Company-Specific Insights - Black Sesame Intelligence is highlighted as a leading supplier of AI chips for smart driving and robotics, with a target price of 24.04 HKD and a "buy" rating [14] - Meitu's strategic partnership with Alibaba is expected to enhance growth prospects, with a "buy" rating maintained [16] - ZTO Express reported a revenue of 10.89 billion RMB, with a focus on market share despite short-term profit pressures, maintaining a "buy" rating [18] - Baidu's transition towards AI cloud services is noted, with a "buy" rating based on strong revenue growth in this segment [23]

Core Viewpoint - Horizon Robotics is a leading provider of advanced driver assistance systems (ADAS) and high-level intelligent driving (AD) solutions in China, focusing on a software-hardware integrated technology path to cover low, medium, and high-end markets with its chips and algorithms [2][3]. Group 1: Company Overview - Horizon Robotics was established in 2015 and has released multiple generations of its Journey series chips since 2017, with cumulative shipments expected to exceed 10 million by 2025 [3]. - The company has a diverse customer base, including major automakers such as Volkswagen, BYD, and Geely, and is projected to hold over 40% and 30% market shares in the Chinese OEM ADAS and AD markets by 2024, ranking first and second respectively [3][4]. - The company has experienced strong revenue growth, with a CAGR of 72% from 2021 to 2024, expecting total revenue of 2.4 billion yuan in 2024 [3][18]. Group 2: Market Potential - The intelligent driving solutions market is expected to reach a scale of 1 trillion yuan by 2030, with significant growth driven by the penetration of high-level intelligent driving technologies [4][44]. - The market for high-level intelligent driving is anticipated to rapidly penetrate the 100,000 to 200,000 yuan segment, with a forecasted increase in demand for intelligent driving solutions [4][35]. - The global market for advanced driver assistance systems and high-level autonomous driving solutions is projected to grow from 61.9 billion yuan in 2023 to 1,017.1 billion yuan by 2030, with a CAGR of 49.2% [44]. Group 3: Financial Performance - Revenue from automotive solutions is expected to grow significantly, with automotive product solutions revenue projected to reach 664 million yuan in 2024, reflecting a CAGR of 47% [25]. - The company has maintained a high gross margin, with gross margins of 71%, 69%, 71%, and 77% from 2021 to 2024 [19]. - Despite strong revenue growth, the company has reported net losses from 2021 to 2024, primarily due to high R&D expenditures, with an adjusted net loss of 1.681 billion yuan in 2024 [18][19]. Group 4: Technological Advancements - The company has developed a comprehensive product matrix, including the Journey series chips, which cover all levels of intelligent driving needs, with the latest Journey 6 series expected to achieve significant performance improvements [54][55]. - Horizon Robotics has a strong focus on R&D, with R&D expenditures projected to reach 3.16 billion yuan in 2024, and a high proportion of its workforce dedicated to R&D [30][32]. - The company has secured numerous patents, with a total of 673 patents, including 585 invention patents, establishing a strong competitive barrier [32].

Investment Rating - The report assigns a "Buy" rating for the company [5] Core Views - The company is a leading third-party intelligent driving chip and solution provider in China, with a strong software-hardware integration technology and a leading strategic and business model [1][2] - The year 2025 marks the mass production year for the J6 series chips and high-level full-stack intelligent driving solutions (HSD), with expected shipment volumes exceeding one million units for J6M/E chips [1][2] - The company's intelligent driving solutions are expected to become the primary choice for OEMs, initiating a new growth cycle [1][3] Company Positioning - The company is positioned as an algorithm software company with a focus on intelligent driving solutions, aiming to become the Wintel of the robot era [2][17] - The company has transitioned from a pure software focus to a software-hardware integration model since 2019, becoming the leading third-party intelligent driving solution provider in China [2][17] Industry Trends - The intelligent driving sector is experiencing a shift towards higher penetration rates and a trend of self-sufficiency in the supply chain, with the new car penetration rate expected to rise significantly by 2025 [3][8] - The company is set to benefit from the trend of intelligent driving equality, with mid-to-high-end intelligent driving configurations becoming more accessible [3][8] Competitive Advantages - The company possesses a unique software-hardware integration model, enabling it to provide high-value solutions across the intelligent driving industry [3][8] - The company is leveraging its advanced algorithms and engineering capabilities to optimize performance and production efficiency [3][8] Investment Value - The company is recognized as a leader in self-sufficient intelligent driving chips and is expected to create significant value in high-level intelligent driving solutions [4][10] Financial Performance - The company anticipates total revenue of 2.38 billion yuan in 2024, representing a year-on-year growth of 53.6%, with a gross margin of 77.3% [2][36] - The revenue from technology licensing and services is projected to reach 1.65 billion yuan in 2024, with a gross margin of 92% [2][36] Product and Business Model - The company focuses on providing full-stack hardware and software products, including chips, algorithms, and development tools, covering low, mid, and high-level intelligent driving solutions [32][35] - The business model is flexible, allowing OEMs and Tier 1 customers to choose from a variety of solutions or components [43][50]