Core Insights - The domestic smart driving industry is experiencing rapid growth, with Horizon achieving a significant milestone of over 10 million units shipped by August 2025, making it the first smart driving technology company in China to reach this level [2] - Horizon's CEO, Yu Kai, has set ambitious targets for the Horizon SuperDrive (HSD) system, aiming for mass production of 10 million units in the next 3-5 years [2][5] - The company has seen a substantial increase in the average selling price of its smart driving solutions, which rose by 70% year-on-year, driven by the new generation of products [3] Group 1: Product Development and Market Position - Horizon's Journey family of products has achieved over 10 million units shipped in just five years, with significant partnerships with major automotive brands like BYD, Li Auto, and Aion [2] - The new Horizon Journey 6E/M models are expected to be featured in over 15 new vehicles this year, indicating strong market demand [3] - The HSD system, developed from the Journey 6P, is recognized as China's version of Tesla's Full Self-Driving (FSD) and is positioned to meet various driving needs from L2 to full urban driving scenarios [4] Group 2: Financial Performance and Future Outlook - Horizon anticipates a total shipment of around 4 million units for the year, with a balanced distribution between low-end and mid-to-high-end products [5] - The company has secured partnerships with over 40 global automakers, with more than 100 models featuring mid-to-high-end driving assistance functions [3][6] - Horizon's investment in cloud computing for model training has increased significantly, leading to a reported operating loss of 1.11 billion yuan in the first half of the year, but the company remains optimistic about future profitability [6]

Core Insights - The Chinese automotive industry is undergoing a significant transformation towards intelligence, with smart driving becoming the main engine for industry upgrades, shifting focus from mere existence to performance and efficiency [2][3] - The smart driving sector is experiencing rapid advancements, particularly in application innovation, marking a turning point for mid-to-high level autonomous driving [8][9] Industry Trends - The future of the smart driving industry is promising, but challenges remain, with only 3 to 4 major technology providers expected to survive in the long run [3][19] - The concept of "smart driving equality" proposed by companies like BYD is seen as a necessary trend that will drive technological development and reduce costs in the smart driving sector [9] Company Insights - Horizon Robotics, under the leadership of President Chen Liming, plays a crucial role in the smart driving industry, focusing on providing intelligent driving solutions [2][4] - The company emphasizes a "soft and hard synergy" approach, recognizing that deep integration of software and hardware is essential for achieving high performance and cost-effectiveness in smart driving technologies [14][15] Technological Development - The industry is currently in a rapid iteration phase, with ongoing innovations in algorithms and increasing demands for computing power, as evidenced by Horizon's flagship chip, which has significantly improved performance metrics [11][12] - The need for efficient engineering capabilities to translate technology into cost-effective products is highlighted as a critical challenge for the industry [14] Future Outlook - The ultimate goal for the smart driving industry is the realization of L4 and L5 level autonomous driving, which would transform vehicles into mere transportation tools, enhancing productivity and leisure during commutes [17][18] - The competitive landscape will likely see a division of labor where most automotive companies will rely on capable suppliers, rather than pursuing full-stack self-development [18][19]

Core Viewpoint - The article discusses Li Auto's four collaboration models with suppliers, emphasizing the importance of strategic partnerships and self-research in enhancing product competitiveness and supply chain security [1][5][13]. Group 1: Collaboration Models - **Self-Research and Manufacturing**: Li Auto designs and produces key components in-house, such as the rear electric drive system for the i8, to ensure competitive efficiency and product integration [6][7]. - **Self-Research with Key Technology Lock-in**: The company collaborates with suppliers like Huichuan to co-develop critical components, such as the front electric drive, to mitigate risks and enhance supply chain security [8][9]. - **Deep Cooperation for Cutting-Edge Technology**: Li Auto invests heavily in partnerships, such as with CATL for the 5C ultra-fast charging Kirin battery, which significantly improves charging times and vehicle range [11][12]. - **Strategic Cooperation for Product Optimization**: Collaborations with companies like Horizon and Hesai lead to customized components that meet specific technical requirements, enhancing overall product performance [12][14]. Group 2: Supply Chain Strategy - **Investment in Core Technologies**: Li Auto focuses on self-research in critical areas like battery cell technology while outsourcing manufacturing to specialized firms, ensuring advanced technology without heavy capital investment [14]. - **Dynamic Supplier Management**: The company maintains a flexible supplier base of approximately 500, aiming to streamline this number for better cost efficiency and competitive advantage [14]. - **Balancing Self-Research and Outsourcing**: Li Auto adopts a dual approach of self-research and external procurement to foster healthy competition among suppliers, ensuring continuous technological advancement and cost optimization [13][14].

Core Viewpoint - Company has transformed into a leading supplier of intelligent driving solutions over the past decade, focusing on full-scene intelligent driving solutions and achieving significant revenue growth with a CAGR of 72.2% from 2021 to 2024 [2][36]. Company Overview - Company has established a comprehensive technology stack covering algorithms, dedicated processing architecture (BPU), and development toolchains, positioning itself as a "chip + software" system-level intelligent driving company [4][9]. - The company has formed a complete layout of intelligent driving chip solutions covering levels L2 to L4, with over 310 models targeted by the end of 2024 [4][12]. - The company has built a large and high-quality customer base, including over 40 cooperative automakers and covering more than 290 models [4][36]. Business Segments - The company's revenue is primarily derived from automotive solutions, which accounted for 97% of total revenue in 2024, with product solutions contributing 27.9% and authorized service business contributing 69.1% [28][36]. - Non-automotive solutions, which focus on smart home applications, accounted for 3% of total revenue in 2024 [28][36]. Financial Performance - The company's revenue increased from 467 million RMB in 2021 to 2.384 billion RMB in 2024, with a CAGR of 72.2% [36][41]. - The gross margin has remained stable around 70%, increasing to 79% in 2024 due to the higher contribution from high-margin authorized service business [36][41]. - Operating losses have been controlled, with losses around 2 billion RMB, and the company is expected to achieve breakeven in the coming years as revenue increases and costs are managed [37][41]. Industry Trends - The intelligent driving market is expected to accelerate penetration, with 2025 anticipated to be a pivotal year for "intelligent driving equality," as traditional automakers ramp up their intelligent driving strategies [3][54]. - The price of high-level intelligent driving packages is decreasing, making advanced driving features more accessible to consumers [3][54]. - The integration of intelligent driving technology into mainstream vehicles is expected to become a standard feature, with major automakers like BYD and Xpeng leading the charge [3][54].

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: Industry Insights - The drug regulatory authority has introduced a new data protection policy for drug trial data, granting 6 years of protection for innovative drugs and 3 years for improved and first-generic drugs [3] - The policy aims to accelerate the development of innovative drugs through faster approval processes and supportive pricing and reimbursement policies, particularly for differentiated innovative drugs [3] - The performance of major drug varieties is expected to accelerate, with significant growth anticipated for PD-1/IL-2 drugs by 2025 [3] Group 2: Automotive and Chip Industry - Local governments are promoting the implementation of L3 autonomous driving, particularly in cities like Beijing and Wuhan, supported by legal frameworks [4] - The cost of intelligent driving systems is significantly decreasing, with expectations that models priced above 150,000 yuan will standardize high-level intelligent driving systems [4] - Horizon Robotics, a leading domestic intelligent driving chip manufacturer, is expected to ship over 10 million units of its chips by 2025 [4] Group 3: Nuclear Fusion Industry - The nuclear fusion sector is attracting significant investment and participation from various companies, with strong government support for its development [5] - The U.S. is constructing the world's first commercial nuclear fusion power plant, with notable advancements in plasma confinement and fusion power output from international facilities [5] - The advantages of nuclear fusion power include stability and minimal greenhouse gas emissions, which are driving interest in the sector [5] Group 4: Chemical Industry - The demand structure for chromium salts is changing, with significant growth expected in the aerospace sector due to the material's properties [6] - Global gas turbine orders are projected to increase from 40 GW/year in 2023 to 80 GW/year by 2026, driving demand for chromium salts [6] - The chemical sector is anticipated to enter a restocking cycle as inventory levels are low and demand is expected to rebound [6]