Investment Rating - The report initiates coverage with a "Buy" rating for Chery Automobile [6][3]. Core Insights - Chery Automobile is positioned as a leading player among domestic car manufacturers, focusing on the transition to new energy vehicles, high-end market penetration, and international expansion to drive new growth [1][18]. - The company has established a clear brand matrix consisting of five brands: Chery, Jetour, Exeed, iCAR, and Zhijie, which cater to various market segments from mainstream to high-end and from fuel to new energy vehicles [1][18][21]. - Chery's sales are projected to grow significantly, with a compound annual growth rate (CAGR) of 36.7% for its main brand from 2022 to 2024, and a notable increase in export sales [2][3]. Financial Summary - Revenue forecasts for Chery Automobile are as follows: 2025 at 315 billion CNY, 2026 at 394.3 billion CNY, and 2027 at 485.6 billion CNY, with corresponding net profits of 16.22 billion CNY, 21.36 billion CNY, and 27.19 billion CNY [3][4]. - The company is expected to maintain a strong net profit margin, with a projected price-to-earnings (PE) ratio of 10.40 for 2025, decreasing to 6.20 by 2027 [3][4]. Sales and Market Position - In the 5-20W price segment, Chery ranks second in wholesale sales, with a significant increase in sales from 1.75 million units in 2023 to 2.375 million units in 2024, driven by its strong performance in the new energy vehicle sector [2][3]. - The overall penetration rate of new energy vehicles in the market is 44.9%, with Chery's brands showing robust growth across all segments [2][3]. Brand Performance - The main brand Chery is expected to achieve sales of 1.643 million units in 2024, while Jetour, Exeed, iCAR, and Zhijie are also projected to see substantial sales increases, reflecting the effectiveness of the company's diversified brand strategy [2][21]. - The Jetour brand is particularly noteworthy, with a projected CAGR of 77.7% from 2022 to 2024, indicating strong market demand for its offerings [2][3]. Technological Advancements - Chery has made significant investments in technology, focusing on five key areas: Mars architecture, Kunpeng power, Lion smart cockpit, Falcon intelligent driving, and Galaxy ecosystem, which are expected to enhance its competitive edge in the automotive industry [1][64].

Core Insights - Horizon's HSD (Horizon SuperDrive) has achieved significant upgrades, marking a milestone with over 10 million units produced in the Journey family [1][8] - The HSD system features a one-stage end-to-end architecture combined with reinforcement learning, enhancing driving safety, efficiency, and user experience [2][3] Group 1: HSD System Features - The HSD system utilizes a one-stage end-to-end architecture, which reduces response delays and improves information transmission, leading to a more human-like driving experience [2][3] - The introduction of reinforcement learning allows the HSD system to self-explore and interact within its world model, enhancing its scene understanding and reasoning capabilities [3][7] Group 2: Performance and User Experience - During real-world testing, the HSD demonstrated low system latency, strong defensive driving capabilities, and seamless control, significantly improving the user experience [6] - The system can quickly adapt to unexpected scenarios, such as construction zones or sudden lane changes, showcasing its advanced scene recognition and decision-making abilities [6][7] Group 3: Market Launch and Production Goals - The star model, the ET5, equipped with the Horizon HSD, is set to launch in November 2025, integrating the latest urban driving assistance technology [8] - Horizon plans to accelerate the commercialization of HSD, aiming for large-scale production by the end of this year, with partnerships established with over 10 global automotive brands [8]

Core Insights - Horizon showcased its upgraded urban auxiliary driving system HSD at the "HSD Pioneer Experience Day" in Beijing, featuring a "one-stage end-to-end + reinforcement learning" architecture that overcomes traditional separation limitations [1] - The HSD system demonstrated low latency, defensive driving, and human-like control capabilities during real-world tests in complex urban environments [1] - The system is designed to self-evolve through reinforcement learning, maintaining stable performance in extreme conditions such as tidal lane changes and unpaved roads [1] - The Xingtai ET5 will be the world's first vehicle equipped with Horizon's HSD and the Journey 6P chip, set to launch in November 2025 [1] - Horizon plans to enter mass production of the HSD system by the end of this year, with expectations to achieve millions of installations over the next 3 to 5 years, promoting the widespread adoption of auxiliary driving technology [1]

Group 1 - Chery Automobile officially listed on the Hong Kong Stock Exchange on September 25, marking a significant milestone for the company [1] - Horizon Robotics, as a cornerstone investor, emphasizes its long-term strategic partnership with Chery, supporting its goal to become a leader in the global automotive industry [1] - The launch of the Starway ET5, the world's first vehicle equipped with Horizon's HSD system and the Journey 6P flagship chip, is highly anticipated and represents a key outcome of their collaboration [1][2] Group 2 - The strategic collaboration between Chery and Horizon, established in 2021, focuses on the development of next-generation assisted driving products and systems [2] - The Starway ET5 showcases integrated capabilities in perception, decision-making, planning, and control, demonstrating excellent environmental perception and path planning in complex urban traffic scenarios [2] - Horizon's support for Chery's intelligent layout is evident through the successful delivery of the Starway ET5, providing a model for the large-scale application of intelligent driving technology across various vehicle types [2] Group 3 - Chery's listing provides a capital foundation for expanding its global business and accelerates the large-scale implementation of intelligent driving technologies [3] - The partnership aims to achieve lower overall costs, faster development cycles, and higher quality mass production capabilities, promoting the accessibility of intelligent driving technology to the public [3]

Core Viewpoint - Chery Automobile's listing on the Hong Kong Stock Exchange marks a significant milestone in the Chinese automotive industry, attracting key investors like Horizon Robotics, which highlights the growing importance of smart technology in reshaping the automotive value chain [1][3][13]. Investment and Strategic Collaboration - Horizon Robotics' investment of $40 million in Chery reflects a strong belief in Chery's growth potential and the strategic importance of smart technology in the automotive sector [1][3]. - The partnership between Horizon and Chery, established in 2021, has led to the development of advanced driving assistance systems, showcasing a successful collaboration that enhances both companies' market positions [4][10]. Market Performance and Growth Projections - Chery is projected to achieve a 49.4% increase in passenger car sales in 2024, positioning it among the top global automakers [3]. - Horizon Robotics leads the Chinese market for autonomous driving solutions, holding a 32.4% share in the market for passenger car assistance systems and a 45.8% share in the ADAS front-view camera market [3][8]. Technological Advancements and Product Development - Horizon Robotics has established a robust competitive edge through its "chip + algorithm + ecosystem" strategy, which has resulted in significant revenue growth, with a 67.6% year-on-year increase in revenue to 1.567 billion yuan [8]. - The introduction of the Horizon Journey 6P chip in Chery's latest model, the Starway ET5, exemplifies the integration of advanced technology into new vehicles, enhancing their market appeal [4][10]. Industry Trends and Future Outlook - The penetration rate of advanced driver assistance systems among Chinese automakers has reached 59%, indicating a strong trend towards smart vehicle technology [9]. - The collaboration between Horizon and over 40 automotive brands, along with plans for mass production of smart driving systems, suggests a promising future for the smart driving market in China [10][11]. - The anticipated growth of the Robotaxi market, projected to reach $47 billion by 2035, underscores the potential for Horizon Robotics to capitalize on emerging opportunities in the autonomous vehicle sector [11][12].

Group 1 - Chery Automobile officially listed on the Hong Kong Stock Exchange on September 25, 2025, under the stock code "9973" [2] - The IPO involved the issuance of 297,397,000 H-shares, with a total fundraising amount of HKD 9.145 billion, making it the largest IPO for a car company in Hong Kong this year [2] - The public offering was oversubscribed by 308.18 times, while the international offering was oversubscribed by 11.61 times [2] Group 2 - Horizon Robotics, a long-term strategic partner of Chery, invested approximately USD 58.7 million (HKD 457.25 million) in the IPO, highlighting the trust and collaboration between the two companies [2][3] - The launch of the Xpeng ET5, the world's first vehicle equipped with Horizon's HSD system and flagship chip, is a significant milestone in their partnership [3][6] - Chery plans to allocate 35% of the IPO proceeds for new model development and 25% for next-generation technology and advanced R&D systems, aligning with Horizon's focus on intelligent driving capabilities [8] Group 3 - Horizon Robotics has established a comprehensive strategic partnership with Chery since 2021, focusing on the development of next-generation assisted driving products [4] - Horizon's products have been adopted by 27 OEMs, with a market share of 32.4% in the Chinese autonomous driving computing solutions market [9] - The company has achieved a production milestone of over 10 million units for its Journey family of products, becoming the first domestic intelligent driving technology company to reach this level [9][12] Group 4 - Horizon Robotics is transitioning from a "hardware and software solution provider" to a "technology infrastructure platform builder," which may lead to a structural change in its valuation logic [13] - The company's stock price has increased by 185% since the beginning of 2025, driven by the rapid growth of the intelligent driving industry and adjustments in its valuation anchors [14]

Core Viewpoint - Chery Automobile is set to officially list on the Hong Kong Stock Exchange on September 25, 2025, under the stock code "9973," raising a total of HKD 9.145 billion through the issuance of 297,397,000 H-shares, making it the largest IPO of a car company in Hong Kong this year [3][9]. Group 1: IPO Details - The IPO saw a subscription rate of 308.18 times for the public offering and 11.61 times for the international offering [3]. - Chery has introduced over ten cornerstone investors, collectively subscribing approximately USD 587 million (HKD 4.5725 billion), including top institutions like Hillhouse and Jinglin [3]. Group 2: Strategic Partnerships - Horizon Robotics, a long-term strategic partner of Chery, has expressed its commitment to supporting Chery's global ambitions and technological advancements, particularly with the launch of the ET5 model featuring Horizon's HSD system and flagship chip [4][5]. - The collaboration between Chery and Horizon Robotics has been ongoing since 2022, focusing on deepening cooperation in automotive intelligence and technology [5]. Group 3: Product Development and Market Position - Chery plans to allocate 35% of the raised funds for new model development and 25% for next-generation technology and advanced research systems, aligning with Horizon's focus on intelligent driving capabilities [9]. - The ET5 model, which debuted at the 2025 Chengdu Auto Show, showcases integrated capabilities in perception, decision-making, planning, and control, highlighting the collaboration's value in practical applications [6]. Group 4: Industry Impact and Future Outlook - Horizon Robotics has achieved significant milestones, including a market share of 32.4% in China's autonomous driving computing solutions and 45.8% in ADAS front-view integration, solidifying its position as a leader in the market [11]. - The partnership with Hello Chuxing for Robotaxi services aims to validate L4-level capabilities in real-world scenarios, further enhancing the commercial viability of autonomous driving technologies [10][13]. - Horizon's stock price has surged by 185% since the beginning of 2025, reflecting the rapid growth of the intelligent driving industry and the company's evolving valuation metrics [19].

Group 1 - Chery Group showcased 31 models at the 28th Chengdu International Auto Show, including the new T11 SUV and the X3L, emphasizing its advancements in the new energy sector [1][3] - The T11 SUV is marketed as a "family-oriented luxury experience" while the X3L is positioned as a "high-energy stylish outdoor box" based on Chery's Kunpeng technology [1][3] - The new mid-size SUV, Starway ET5, features advanced driving assistance systems and high safety standards, aligning with the brand's "tech luxury" positioning [3] Group 2 - From January to July, Chery Group achieved cumulative sales of 1.4845 million vehicles, marking a 14.5% year-on-year increase and becoming the first Chinese brand to export over 5 million vehicles [5] - Chery aims to showcase its latest technological achievements and product matrix at the auto show, focusing on hybrid, extended-range, and pure electric vehicles [5]

Group 1 - Chery showcased 31 models across four brands at the 2025 Chengdu International Auto Show, including the pre-sale of the Fengyun X3L priced between 129,900 to 169,900 yuan, featuring a pure electric range of 215 km and a comprehensive range exceeding 1200 km [1][3] - The Jietu brand introduced the Jietu Shanhai L7 PLUS, equipped with a 1.5TGDI hybrid engine, offering a pure electric range of 220 km and a comprehensive range of 1700 km, focusing on the "Travel+" niche market [1] - The Jietu Zongheng brand targets the luxury off-road segment with the launch of the Zongheng G700, featuring the Kunpeng Super Hybrid CDM-O and three locking differentials to enhance off-road capabilities, with an expected price range of 400,000 to 500,000 yuan [1] Group 2 - Chery submitted a new listing application to the Hong Kong Stock Exchange on August 29, after a previous application expired due to a lack of hearing within six months [3] - The China Securities Regulatory Commission approved Chery's plan for overseas issuance and the full circulation of unlisted domestic shares, allowing the issuance of up to 699 million overseas ordinary shares for listing on the Hong Kong Stock Exchange [3] - A source close to Chery indicated that the IPO process is progressing smoothly, with the recent approval marking a significant step forward [3]

Group 1 - The Chery Exeed brand officially unveiled the new mid-size SUV, Exeed ET5, at the 2025 Chengdu International Auto Show, marking it as the world's first model equipped with the Horizon SuperDrive (HSD) urban assisted driving system [1][2] - The Exeed ET5 features a range-extended power system with a 1.5T range extender, delivering a maximum power of 115 kW, paired with a 32.66 kWh lithium iron phosphate battery, achieving a 0-100 km/h acceleration time of 7.8 seconds and a pure electric range of 205 km [1] - The Exeed ET5 is set to officially launch in November 2023 [1] Group 2 - Since the strategic partnership began in 2021, Chery Group and Horizon have jointly launched multiple models based on the Journey family computing solution, covering Chery's four major brands [2] - The Exeed ET5 features the Falcon 700 assisted driving system, which is globally debuting with deep integration of Horizon HSD, with plans for more models under Chery Group to adopt Horizon HSD in the future [2] - Horizon's founder and CEO expressed the company's commitment to high-quality technological products through the HSD system, aiming to collaborate with Chery and Exeed to usher in a new era of smart automobiles [2]