Core Viewpoint - The report from Huaxi Securities initiates coverage on Hesai Technology (02525) with a "Buy" rating, highlighting its position as a global leader in the lidar industry, driven by proprietary ASIC technology and a platform-based architecture [1] Group 1: Company Overview - Hesai Technology was established in 2014 and went public in the US in 2023, with plans for a Hong Kong listing in 2025 [1] - The company's products are widely used in advanced driver-assistance systems (ADAS) for passenger and commercial vehicles, as well as in autonomous vehicles and various robotic applications [1] - Hesai has achieved significant partnerships with 22 major OEMs, securing 120 model designations in the ADAS sector, ranking first in production volume [5] Group 2: Market Growth - The global lidar market is projected to grow from $1.6 billion in 2024 to $17.1 billion by 2029, with a CAGR of 61.2% [2] - The ADAS lidar market is expected to expand from $1 billion in 2024 to $12 billion by 2029, with a CAGR of 63.6% [2] - The robotics lidar market is forecasted to grow from $600 million in 2024 to $5.1 billion by 2029, with a CAGR of 53.6% [3] Group 3: Technological and Product Advantages - Hesai is the only lidar company that has independently developed all key components, including lasers, detectors, and signal processors, enhancing product performance and reducing manufacturing complexity [4] - The company's unique lidar architecture allows for high integration of transmission and reception modules, improving product quality while lowering costs [4] - Hesai's product lineup, including AT128, ATX, XT, and Pandar series, meets automotive safety standards and balances performance, quality, and cost effectively [5] Group 4: Customer and Market Position - In the ADAS sector, Hesai ranks first in lidar production volume, having secured 120 model designations from 22 OEMs as of March 31, 2025 [5] - In the robotics sector, Hesai has collaborated with leading companies in delivery and logistics, achieving a monthly shipment of over 20,000 units, making it the first lidar company to reach this milestone [5] - The company holds a market share exceeding 55% in the autonomous taxi sector from 2022 to 2024 [5]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][3]. Core Viewpoints - The company is a leader in the LiDAR market, focusing on high-definition 3D perception technology to enable safer and smarter applications in intelligent driving and robotics [1][13]. - The demand for LiDAR is rapidly increasing due to advancements in intelligent driving and robotics, supported by cost-reduction innovations that enhance the cost-effectiveness of LiDAR as a sensor [1][2]. - The company is expected to reach a total revenue of approximately 31.5 billion, 45.7 billion, and 60.6 billion RMB from 2025 to 2027, with significant growth rates of 52%, 45%, and 33% respectively [2][3]. Summary by Sections Company Overview - The company was established in 2014 and has focused on LiDAR research and manufacturing for ten years, achieving global leadership in shipment volume [1][13]. - The company has a comprehensive product system and a broad customer base, with significant partnerships in the automotive and robotics sectors [23][28]. Financial Performance - The company is projected to have revenues of approximately 12.0 billion, 18.8 billion, and 20.8 billion RMB from 2022 to 2024, driven by the growth in LiDAR product shipments [34]. - The company’s gross margin is expected to improve from 35.2% in 2023 to 42.6% in 2024 due to effective cost-reduction measures and economies of scale [37]. - The company is anticipated to reach a non-GAAP net profit of approximately 0.14 billion RMB in 2024, indicating a turning point towards profitability [37]. Industry Analysis - The global market for automotive LiDAR is expected to reach 50 billion RMB by 2030, while the market for robotic LiDAR is projected to reach 10 billion RMB [1][2]. - The report highlights the diverse product paths available in the LiDAR market, including mechanical, semi-solid, and solid-state solutions [44].