Company Overview - Hesai Technology is a global leader in lidar solutions and has surpassed 2 million cumulative lidar deliveries in 2025, enabling large-scale deployments in automotive and robotics applications [1][2] Market Trends - The ADAS market is rapidly growing, with lidar becoming a standard safety feature in vehicles. Hesai has secured design wins from 24 automotive OEMs for over 120 vehicle models, with deliveries planned from 2026 to 2030 [2] - Each Level 3 (L3) vehicle is expected to adopt three to six lidars due to safety redundancy requirements and new regulations, significantly expanding Hesai's addressable market [2] Product Showcase - At CES 2026, Hesai will showcase its next-generation L3 automotive lidar suite, including the long-range lidar ETX and short-range lidar FTX [2] - In the robotics sector, Hesai's JT series lidars are being integrated into products by leading innovators such as MOVA, Roboterra, Vbot, and Realsee, enabling high-fidelity sensing for AI-powered systems [3] Event Participation - Hesai Technology will exhibit at the Consumer Electronics Show (CES) 2026 in Las Vegas from January 6–9, providing live demonstrations of its lidar technology [1][2][3]

Core Viewpoint - Hesai Technology has launched a new version of its lidar product, the ATX, featuring advanced specifications and a focus on enhancing safety in autonomous driving applications [1][21]. Group 1: Product Features and Innovations - The ATX new version incorporates SPAD technology, has 256 laser lines, a best angular resolution of 0.08 degrees by 0.05 degrees, and a range capability of 230 meters, with over 4 million units already ordered [1][21]. - The product utilizes Hesai's self-developed intelligent main control chip, the Fermi C500, which enhances performance without significantly increasing costs [1][27]. - The ATX new version aims to achieve "zero false positives" in safety, improving the reliability of autonomous driving systems [1][21][19]. Group 2: Market Position and Historical Context - In 2017, Hesai held only an 8% market share in the lidar sector, while Velodyne dominated with 90%. By 2022, Hesai became the market leader with a 74% share in the autonomous driving lidar field [7]. - The company initially focused on mechanical rotating lidar, which has since become a significant revenue source, despite early skepticism about its viability [7][8]. Group 3: Future Product Plans - Hesai plans to launch at least three new lidar products in 2024, including the ETX and FTX, which will further enhance performance and safety [29][31]. - The company has already produced the SPAD digital lidar FT120, which was first used in the Extreme Stone vehicle, and is set to expand its product offerings [15][21]. Group 4: Industry Insights and Competitive Landscape - The lidar market is evolving towards a digital and chip-based technology route, with a focus on enhancing performance and reducing costs [10][40]. - Hesai's CEO acknowledges the influence of major players like Huawei in promoting lidar technology, which has helped raise consumer awareness and acceptance [36][37]. Group 5: Strategic Vision and Market Expansion - The company emphasizes the importance of maintaining a robust supply chain with multiple suppliers to ensure safety and performance in its products [33][34]. - Hesai is exploring opportunities beyond the automotive sector, recognizing the potential for lidar applications in various industries [59][60].

Core Viewpoint - In Q3 2025, the company achieved a revenue of 7.95 billion yuan, a year-on-year increase of 47.5%, and a net profit of 256 million yuan, indicating strong demand in both domestic and global markets for ADAS and robotic lidar products [2][9]. Financial Performance - The company's revenue for Q3 2025 was 7.95 billion yuan, up 47.5% year-on-year and 12.6% quarter-on-quarter, with a net profit of 256 million yuan compared to a loss of 70 million yuan in Q3 2024 [2][9]. - Adjusted net profit for Q3 2025 was 288 million yuan, reflecting a significant recovery from previous quarters [2][9]. - The gross margin for Q3 2025 was 42.1%, with a net margin of 32.2%, showing a year-on-year decrease in gross margin but an increase in net margin [4][14]. Business Segments ADAS Business - The company reported a strong order backlog in the ADAS sector, benefiting from increased downstream market demand [5]. - In Q3 2025, the company secured a partnership with a top three Chinese EV manufacturer for the ETX lidar, with plans for mass production by late 2026 or early 2027 [6][27]. - The company maintained a leading market share in the ADAS sector, with a 46% market penetration, significantly higher than competitors [28][31]. Robotics Business - The company has made significant inroads in the robotics sector, securing major contracts with leading global autonomous driving firms, representing multi-million dollar strategic partnerships [7][31]. - In Q3 2025, the company continued to supply lidar solutions for the Motional IONIQ5 Robotaxi, with each vehicle equipped with four lidar units [31]. Product Development - The company launched a new generation of automotive-grade lidar products, including the AT1440, ETX, and FTX, which are designed for various levels of autonomous driving [24][25]. - The AT1440 lidar is noted for its high point frequency, while the ETX lidar is recognized for its long-range capabilities, and the FTX lidar offers a wide field of view [24][25]. Market Position - The company has become the first lidar manufacturer to achieve an annual production milestone of over one million units, reinforcing its leadership in the lidar industry [32][33]. - The company successfully listed on the Hong Kong Stock Exchange, marking a significant milestone as the first lidar company to achieve dual primary listings in both the US and Hong Kong [36][37].

Investment Rating - The report maintains a "Recommended" rating for the industry, indicating a positive outlook for the sector's fundamentals and expected performance exceeding the benchmark index [5]. Core Insights - The company, Hesai (HSAI.O), reported a revenue of 795 million yuan for Q3 2025, representing a year-over-year increase of 47.5%, marking six consecutive quarters of growth [2][23]. - The company has adjusted its full-year guidance, projecting total revenue for 2025 to be between 3 billion to 3.2 billion yuan, with a GAAP net profit forecast of 350 million to 450 million yuan [3][25]. - The company achieved a significant milestone by delivering over 1 million laser radars in the first three quarters of 2025, maintaining the leading market share in the ADAS sector [3][20]. Summary by Sections Revenue Performance - In Q3 2025, the company achieved a revenue of 795 million yuan, a 47.5% increase year-over-year, driven by the standardization of onboard laser radar and expansion in the robotics sector [2][24]. - For the first three quarters of 2025, total revenue reached 2.027 billion yuan, reflecting a 49.3% year-over-year growth [2]. Profitability Metrics - The gross margin for Q3 2025 was reported at 42.1%, slightly down from the previous year, but expected to remain around 40% in Q4 [2][24]. - The GAAP net profit for Q3 2025 was 256 million yuan, marking a historical high and surpassing the annual profit target ahead of schedule [2][20]. Market Position and Delivery Volume - The company delivered 441,400 laser radars in Q3 2025, a year-over-year increase of 228.9%, with ADAS laser radar deliveries reaching 380,800 units [3][20]. - The company holds a dominant market share in the ADAS sector, with a reported market share of 46% as of August 2025, significantly higher than its competitors [3][20]. Future Outlook - For Q4 2025, the company expects net revenue to be between 1 billion to 1.2 billion yuan, with year-over-year growth projected between 39% to 67% [3][25]. - The company anticipates total laser radar deliveries for 2025 to reach approximately 1.6 million units, with expectations for 2026 to see deliveries between 2 million to 3 million units [3][25][28]. Strategic Developments - The company has secured significant contracts with major ADAS clients, with all models from its top two clients in 2026 expected to be equipped with Hesai laser radars [4][21]. - The successful IPO in September 2025 raised 614 million USD, marking the largest IPO in the laser radar industry, which will enhance the company's financial foundation and support future growth initiatives [20][22].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][39]. Core Insights - The company reported a revenue growth of 47.5% year-on-year in Q3 2025, achieving a net profit of 256 million yuan, with strong demand for its lidar products in both domestic and global markets [1][6]. - The company has a robust order backlog in the ADAS (Advanced Driver Assistance Systems) sector, with significant contracts secured from major automotive manufacturers [2][31]. - The lidar shipment volume reached 441,400 units in Q3 2025, representing a year-on-year increase of 228.9% [7][39]. Financial Performance - In Q3 2025, the company's revenue was 795 million yuan, with a gross margin of 42.1% and a net margin of 32.2% [2][16]. - The total revenue for the first three quarters of 2025 was 2.027 billion yuan, a 49.3% increase compared to the same period in 2024 [6][39]. - The adjusted net profit for Q3 2025 was 288 million yuan, reflecting a significant recovery from previous losses [1][6]. Business Segments - The product revenue in Q3 2025 was 790 million yuan, up 57% year-on-year, driven by increased shipments of ADAS and robotic lidar products [1][6]. - The service revenue decreased to 5.3 million yuan, down 85.4% year-on-year, primarily due to a reduction in non-recurring engineering service income [1][6]. - The company has secured key partnerships in the robotics sector, including contracts with leading Robotaxi companies, enhancing its market position [3][32]. Market Position - The company maintains a leading market share in the ADAS sector, with a reported market penetration rate of 46%, significantly higher than its closest competitors [27][31]. - The company has successfully launched new lidar products aimed at various levels of autonomous driving, reinforcing its technological leadership [22][23]. Future Outlook - The revenue forecast for 2025-2027 is set at 3.138 billion, 4.347 billion, and 6.037 billion yuan, respectively, with net profits expected to reach 355 million, 513 million, and 881 million yuan [39][40]. - The company is positioned to benefit from the growing demand for lidar technology across multiple sectors, including automotive and robotics, with a strong pipeline of orders [39][39].

Investment Rating - The report initiates coverage with an "Outperform" rating, targeting a price of HKD 247.6, indicating a potential upside of 59.9% from the current price of HKD 154.90 [2][3][22]. Core Insights - Hesai Group is positioned as a global leader in LiDAR technology, with a strong market share in the ADAS sector, holding 46% of the market as of August 2025, which is 1.5 times that of the second-ranked competitor [3][7][13]. - The company is expected to benefit significantly from the adoption of Level 3 (L3) autonomous driving regulations, which will likely increase both volume and pricing for its products [5][24]. - The company has established partnerships with leading autonomous vehicle and robotics firms across North America, Asia, and Europe, indicating a robust growth trajectory in both the ADAS and robotics sectors [3][8][13]. Financial Performance - For 2025, the company forecasts revenues of RMB 3.037 billion, with a projected growth rate of 46% year-over-year [2][14][22]. - In Q3 2025, the company reported revenues of RMB 800 million, a 47.5% increase year-over-year, and achieved a GAAP net profit of RMB 260 million, surpassing its full-year profit target ahead of schedule [4][23]. - The total LiDAR shipments for 2025 are expected to reach 1.6 million units, with 610,000 units anticipated in Q4 2025 [22][23]. Market Position and Growth Potential - The company has launched the world's longest-range automotive-grade LiDAR, the ETX, which is expected to play a crucial role in the L3 market [5][24]. - The anticipated increase in the number of LiDAR units per vehicle for L3 models (3 to 6 units) presents significant market expansion opportunities, with each unit valued between USD 500 and 1,000 [5][24]. - The report highlights that Hesai's product mix, including the cost-effective ATX, is expected to contribute to revenue growth despite a projected decline in average selling price (ASP) by 8% quarter-over-quarter in Q4 2025 [3][14][22].

Core Insights - The company reported its Q3 2025 unaudited financial data, achieving a revenue of 800 million yuan, a year-on-year increase of 47.5%, and a net profit of 260 million yuan, marking a historical high [1] - The company raised its full-year GAAP net profit guidance to a range of 350 million to 450 million yuan [1] - The gross margin for Q3 2025 was 42%, with operating expenses decreasing by 23% year-on-year, reflecting significant improvements from AI technology in cost control and operational efficiency [1] Financial Performance - In Q3 2025, the company delivered a total of 441,398 laser radars, a year-on-year increase of 228.9% [1] - The ADAS product delivery in Q3 reached 380,759 units, up 193.1% year-on-year, with total ADAS deliveries for the first three quarters reaching 830,400 units [1] - The robotics sector saw a delivery of 60,639 units in Q3, a staggering increase of 1311.9%, with total deliveries for the first three quarters at 158,900 units [1] Strategic Partnerships - The company secured contracts for the 2026 model year with its top two ADAS clients, achieving 100% standardization of laser radar in their vehicles [2] - The ETX laser radar product was selected by one of China's top three new car manufacturers, with related models set to feature multiple FTX blind-spot radars [2] - The combination of main and blind-spot radars is expected to increase the number of laser radars per vehicle and the average selling price (ASP), with L3 vehicles anticipated to use 3-6 laser radars, leading to an ASP of 500-1000 USD per vehicle [2] Market Expansion - The company has made significant strides in the Robotaxi and Robotruck markets, collaborating with several autonomous vehicle companies, including Motional and JD Logistics [3] - Some models are equipped with up to 8 laser radars, including both main and blind-spot radars [3] - The company has secured multi-million dollar strategic partnerships with leading autonomous driving firms in North America, Asia, and Europe, continuing to provide core perception solutions for Motional's all-electric IONIQ 5 Robotaxi [3] Profit Forecast - The company forecasts net profits of 416 million yuan, 697 million yuan, and 1.189 billion yuan for 2025, 2026, and 2027 respectively, with EPS of 2.66 yuan, 4.47 yuan, and 7.62 yuan [3] - The projected price-to-earnings (PE) ratios are 57.90, 34.54, and 20.25 for the respective years [3]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][6]. Core Insights - The company has raised its full-year GAAP net profit guidance to a range of 350-450 million yuan, following a record high net profit of 260 million yuan in Q3 2025, with total net profit for the first three quarters reaching 280 million yuan, achieving its annual profit target one quarter ahead of schedule [1][3]. - The company has secured contracts for the 2026 model year with its top two ADAS clients, ensuring 100% laser radar standardization, which provides high certainty for growth in shipment volumes [2][3]. - The company has made significant progress in the Robotaxi and Robotruck markets, establishing partnerships with several leading autonomous vehicle companies, which include substantial orders valued at tens of millions of dollars [3]. Financial Summary - For 2025, the company expects net profits of 416 million yuan, 697 million yuan in 2026, and 1.189 billion yuan in 2027, with corresponding EPS of 2.66 yuan, 4.47 yuan, and 7.62 yuan [3][5]. - The projected revenue for 2025 is 3.128 billion yuan, increasing to 4.752 billion yuan in 2026 and 6.399 billion yuan in 2027, reflecting growth rates of 50.58% and 51.94% respectively [5][12]. - The gross margin for Q3 2025 was reported at 42%, with operating expenses decreasing by 23% year-on-year, showcasing effective cost control through AI technology [1][3].

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved a net revenue increase of nearly 50% year-over-year, reaching RMB 795 million, with total shipments of 441,398 units, up 229% year-over-year [4][15] - The company reported a record quarterly GAAP net income of RMB 256 million, exceeding its full-year target of RMB 200-350 million ahead of schedule [5][17] - Gross margin remained healthy at 42%, supported by economies of scale and improved manufacturing productivity [16] Business Line Data and Key Metrics Changes - The ADAS market saw significant growth, with LiDAR becoming a standard feature in vehicles, achieving 100% adoption from top ADAS customers for their 2026 models [6][7] - The robotics business is also expanding, with strong demand from autonomous driving fleets and new deals signed with companies like Pony.ai and JD Logistics [10][11] Market Data and Key Metrics Changes - The company captured a 46% market share in the long-range automotive LiDAR market as of August 2025, significantly outpacing competitors [4] - The introduction of new regulations in China for higher-level autonomous driving is expected to drive demand for LiDAR systems [8] Company Strategy and Development Direction - The company aims to evolve into a full-spectrum technology infrastructure builder, focusing on innovation and capturing new market opportunities [12] - The successful dual primary listing on the Hong Kong Stock Exchange is seen as a pivotal moment, enhancing the company's financial foundation for future growth [14][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of the LiDAR market, anticipating strong demand for ADAS LiDAR in passenger vehicles and robotics applications [24][25] - The company expects to ship 2-3 million LiDAR units in 2026, driven by the adoption of L3 vehicles and expanding global partnerships [24][25] Other Important Information - The company has integrated AI across its operations, leading to significant cost savings and improved efficiency [16] - The company is exploring new growth engines beyond LiDAR, including advanced sensing technologies and AI capabilities [72][73] Q&A Session Summary Question: Pricing strategy and volume expectations for next year - Management indicated that Q4 revenues are expected to reach RMB 1.0 to RMB 1.2 billion, with a full-year revenue increase of nearly 50% anticipated [22][23] Question: Competition and product advantages - Management acknowledged strong competition but emphasized the superior performance and reliability of their products, particularly the ATX LiDAR [30][32] Question: Level 3 legislation and product improvements - Management highlighted the rapid evolution of regulations in China and Europe, which are expected to drive demand for higher-level autonomous driving solutions [41][42] Question: Robotics business growth and shipment expectations - Management noted that the robotics segment is expected to see significant growth, with shipments anticipated to double in 2026 compared to 2025 [56][58] Question: Key customers and demand scale for ADAS products - Management identified key OEMs such as BYD and Li Auto as major customers, with expectations for increased LiDAR adoption across their vehicle lines [62][63] Question: Updates on overseas projects and contributions - Management confirmed ongoing projects with top European OEMs and expressed optimism about future contributions from international markets [65][68]

Core Insights - Hesai Technology reported a revenue of 800 million RMB for Q3 2025, marking a year-on-year growth of 47.5%, achieving six consecutive quarters of growth [2][20] - The net profit reached a record high of 260 million RMB, exceeding the annual profit target one quarter ahead of schedule, with the full-year guidance raised to 350 million to 450 million RMB [4][22] - Total lidar deliveries amounted to 441,398 units, with ADAS product deliveries increasing by 193.1% and robot sector deliveries soaring by 1311.9% [6][22] Revenue and Growth - The company maintained industry-leading revenue with a Q3 revenue of 800 million RMB, reflecting a 47.5% year-on-year increase and consistent growth over six quarters [2][20] - The gross margin for Q3 remained stable at 42%, while operating expenses decreased by 23%, showcasing effective cost control and operational efficiency [22] Delivery and Market Position - Total lidar deliveries in Q3 reached 441,398 units, a significant year-on-year increase of 228.9%, with ADAS deliveries at 380,759 units and robot deliveries at 60,639 units [6][22] - In the ADAS sector, the company achieved a market share of 46% in August, 1.5 times that of the second competitor and 2.4 times that of the third [9][20] Strategic Partnerships and Product Development - The company secured partnerships with the top two ADAS clients for 2026 model year vehicles, achieving 100% standardization of lidar [9][21] - The ETX+FTX product combination was selected for the first mass production of passenger vehicles, expected to start production by late 2026 or early 2027 [11][22] Milestones and Future Outlook - The company became the first lidar manufacturer to achieve an annual production milestone of over one million units by September 2025 [14] - Successful listing on the Hong Kong Stock Exchange marked a significant milestone, enhancing the company's financial foundation and global strategic positioning [17][22]