Core Insights - Horizon aims to implement advanced urban driving assistance in vehicles priced below 70,000 yuan, targeting a market where 50% of passenger car sales fall under 130,000 yuan [3][4] - The company plans to collaborate with major manufacturers to achieve a production scale of 10 million units within three to five years, leveraging its self-developed driving algorithms [3][4] - Horizon's ambition is to make advanced driving assistance a standard feature, akin to automatic transmissions, rather than a luxury add-on [4][10] Market Context - The current market for vehicles under 100,000 yuan lacks advanced urban driving features, presenting a significant growth opportunity for Horizon [3][4] - Competitors like BYD, Geely, and Chery have introduced simpler driving assistance features but have not ventured into advanced urban driving solutions [4][9] - The competitive landscape is intensifying, with companies like Momenta and Qualcomm entering the market with rapid advancements in chip development [4][9] Technological Development - Horizon's strategy involves developing its own HSD (High-level Driving) solutions to increase market share and reduce costs through economies of scale [10][11] - The company aims for a tenfold increase in computing power and model capacity with each new generation of chips, with the upcoming Journey 7 series expected to launch alongside Tesla's next-generation AI5 chip [10][11] - The Journey 6 series is crucial for Horizon's strategy, as it is designed to support urban NOA (Navigation on Autopilot) and is expected to meet the rising demand for higher computing power in the industry [11][12]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook on its future performance [4][6]. Core Insights - The company is positioned as a leading provider of domestic intelligent driving solutions, having undergone significant transformation over the past decade. It has established a comprehensive product portfolio that includes both automotive and non-automotive solutions, with a strong focus on intelligent driving technology [1][15]. - The intelligent driving industry is expected to accelerate its penetration into mainstream markets, with 2025 projected to be a pivotal year for "intelligent driving equality." Major automotive manufacturers are increasingly adopting intelligent driving strategies, which will create opportunities for leading suppliers [2][48]. - The company has built a robust ecosystem that empowers partners in the intelligent driving space, leveraging its complete technology stack that spans algorithms, specialized processing architectures, and development tools [3][4]. Summary by Sections Company Overview - The company has evolved into a key player in the intelligent driving sector, providing comprehensive advanced driver assistance systems (ADAS) and high-level autonomous driving (AD) solutions. It has a significant market share in the domestic market, exceeding 40% in the advanced driving assistance segment [15][18]. - The company has established a large and high-quality customer base, with over 310 models targeted for production by the end of 2024, reflecting its strong market presence [29][39]. Industry Insights - The intelligent driving market is witnessing a shift towards affordability, with traditional manufacturers like BYD and Geely launching strategies to democratize intelligent driving technology. This trend is expected to reshape the industry landscape [2][48]. - The report highlights the importance of third-party suppliers in the intelligent driving ecosystem, as they can provide scalable solutions to traditional manufacturers, thereby accelerating the adoption of advanced driving technologies [12][13]. Financial Performance - The company has experienced significant revenue growth, with a compound annual growth rate (CAGR) of 72.2% from 2021 to 2024, increasing from 467 million RMB to 2.384 billion RMB. The automotive solutions segment accounts for 97% of total revenue, with a strong contribution from licensing and service fees [39][46]. - The gross margin has remained stable, with an increase to 79% in 2024, driven by the higher proportion of high-margin licensing and service revenues [39][46]. Future Outlook - The company is expected to continue expanding its market share in the intelligent driving sector, with projected revenues of 3.603 billion RMB, 5.264 billion RMB, and 7.645 billion RMB for 2025, 2026, and 2027, respectively [4][5].