Core Viewpoint - Goldman Sachs maintains a "Buy" rating for Horizon Robotics-W (09660), raising the target price from HKD 14.11 to HKD 15.3, which corresponds to an enterprise value to EBITDA multiple of 28 times [1] Group 1: Product Development and Applications - Horizon Robotics' Journey 6 platform is seeing increased applications in new vehicle models, including J6P and Super Drive High-Level Intelligent Driving (HSD) for Chery Automobile (09973) Exeed ET5, J6E for SAIC MG4530, and J6M for Changan Automobile (000625.SZ) Q07 and Geely Automobile (00175) Galaxy A7, enabling high-speed and urban navigation assistance driving (NOA) [1] - The J6P and HSD have already entered mass production in Chery Exeed ET5, with deliveries starting next month [1] Group 2: Market Outlook and Product Strategy - The company offers a comprehensive system-on-chip (SoC) platform solution ranging from 5 TOPS to 560 TOPS, covering various price segments and providing integrated hardware and software solutions based on customer needs [1] - There is optimism regarding the company's increasing shipment volumes and the transition of its product mix towards high-end SoCs [1]

Core Viewpoint - Goldman Sachs maintains a "Buy" rating for Horizon Robotics-W (09660) and raises the target price from HKD 14.11 to HKD 15.3, which corresponds to an enterprise value to EBITDA ratio of 28 times [1] Group 1: Product Development and Applications - Horizon Robotics' Journey 6 platform is seeing increased applications in new vehicle models, including J6P and Super Drive High-Level Intelligent Driving (HSD) for Chery Automobile (09973) Exeed ET5, J6E for SAIC MG4530, and J6M for Changan Automobile (000625.SZ) Qiyuan Q07 and Geely Automobile (00175) Galaxy A7, enabling high-speed and urban navigation assistance [1] - The Journey 6 series, specifically J6P and HSD, has entered mass production for Chery Exeed ET5, with deliveries starting next month [1] Group 2: Technology and Market Outlook - The company offers a comprehensive system-on-chip (SoC) platform solution ranging from 5 TOPS to 560 TOPS, covering various price segments and providing integrated hardware and software solutions based on customer needs [1] - There is optimism regarding the company's increasing shipment volumes and the transition of its product mix towards high-end SoCs [1]

Core Viewpoint - Horizon Robotics-W (09660) has seen a significant increase in stock price, attributed to the successful delivery of its Bosch mid-tier intelligent driving solution and securing orders from major Japanese OEMs for key sales models in China [1] Group 1: Company Developments - Horizon Robotics has successfully delivered its Bosch mid-tier intelligent driving solution based on the Journey 6E/6M platform [1] - The company has secured orders for mainstream vehicle platforms from top Japanese OEMs, enhancing its presence in the Chinese market [1] - The launch of the Starway ET5, which features the world's first HSD system, is set for November, targeting the mainstream market with a high-end driving experience priced around 150,000 yuan [1] Group 2: Industry Trends - The HSD system has already been designated for over 10 models from multiple automakers, with a production target of 10 million units in the next 3-5 years [1] - Morgan Stanley highlights that the acceleration of global autonomous driving is initiating a positive adoption cycle, with Chinese manufacturers increasingly collaborating with local technology firms to enhance their autonomous driving strategies [1]

Core Insights - Horizon Robotics has secured a significant order from a leading Japanese OEM for mid-to-high-level assisted driving solutions based on its Journey 6 series chips, which will enhance its market presence in China [2] - The Journey 6 series encompasses six versions with computing power ranging from 10 to 560 TOPS, making it the only domestic solution that meets the full spectrum of driving assistance needs from basic ADAS to full urban driving scenarios [3] - Horizon has established deep partnerships with over 40 automotive companies globally, enabling more than 400 vehicle models and serving over 6 million car owners [3] Company Developments - Horizon Robotics is the first Chinese company to achieve mass production of over 10 million intelligent driving solutions, with its HSD system being recognized as the "Chinese version of FSD" [2][3] - The company is accelerating its international expansion, having formed partnerships with nine joint venture automakers, including Volkswagen and Japan's largest automotive group, for 30 model collaborations by September 2025 [4] - The Journey 6B solution has been adopted by two foreign automakers for overseas models, with an expected total delivery of 7.5 million units [4]

Investment Rating - The report maintains a "Buy" recommendation for the automotive industry [2] Core Insights - Global light vehicle sales in August reached approximately 6.92 million units, a year-on-year increase of 4.3% but a month-on-month decrease of 2.0%. Overseas sales totaled about 4.24 million units, down 1.7% year-on-year and down 8.3% month-on-month [2] - In August, North America sold 1.75 million vehicles, up 2.1% year-on-year and up 5.1% month-on-month. Europe sold approximately 1.09 million vehicles, up 0.7% year-on-year but down 24% month-on-month. China sold 2.68 million vehicles, up 15% year-on-year and up 10% month-on-month [2] - The report anticipates that overseas light vehicle sales will remain flat year-on-year in 2025, with North America expected to see a slight decline due to tariff impacts and subsidy reductions [2][5] Summary by Sections Industry: Sales, Exchange Rates, Freight - Global light vehicle sales and global new energy vehicle sales are detailed, with specific figures for various regions [6][8] - The report highlights the impact of exchange rates and freight costs on the automotive industry [6][24] Market Competition - The competitive landscape is analyzed, showing the market share changes among the top global automotive manufacturers [26][27] - The report discusses the global new energy vehicle market dynamics and the competitive positioning of key players [30][31] Export Situation of Automotive and Parts Companies - The report provides insights into the export performance of domestic automotive manufacturers, including monthly growth rates and the share of overseas revenue for key companies [36][37]

Summary of the Conference Call Transcript Industry Overview - The focus is on the Electric Vehicle (EV) industry in China, highlighting the competitive landscape and supply chain dynamics [1][7]. Key Points and Arguments Market Dynamics - **Consolidation Pause**: The top 10 players in the EV market have seen their market share decrease to 76% in the first eight months of 2025, down from 78% in 2024, indicating a pause in industry consolidation [2][10]. - **Emerging Competitors**: EV laggards are gaining traction with new car launches and aggressive pricing strategies. For instance, SAIC's H5 model, priced at RMB169.8k, received over 50,000 orders within 18 hours of its launch [2][7]. Supply Chain Focus - **Battery Pricing Trends**: A potential turning point in battery pricing is anticipated between the second half of 2025 and the first half of 2026, with some energy storage system (ESS) battery products already showing price improvements [3][7]. - **Demand Surge**: Strong domestic demand for ESS batteries, following the cancellation of a mandatory storage policy, along with increasing orders from international markets, is expected to support both volume and pricing in the upcoming quarters [3][7]. Autonomous Driving Development - The development of autonomous driving technology is accelerating, with more Level 3 (L3) functions being rolled out and Level 4 (L4) Robotaxi commercialization becoming feasible due to technological advancements and supportive policies [3][7]. Stock Highlights - **Preferred Suppliers**: In light of weak auto demand and intense competition, the preference is for resilient suppliers over original equipment manufacturers (OEMs). Key stocks include: - **CATL A/H**: Strong earnings and overseas expansion outlook [4][7]. - **REPT**: Expected profitability turnaround in FY25 due to rising shipments and utilization [4][7]. - **Horizon Robotics**: Benefiting from the acceleration of autonomous driving among OEMs [4][7]. - **Geely**: Gaining market share in EVs with a strong product pipeline [4][7]. Market Share Insights - The EV market is characterized by a long tail of competition, with 50 brands vying for the remaining 24% of the market share [9][10]. Additional Insights - **Discount Levels**: The discount level for EVs in China slightly increased to 10.7% in August 2025, while ICE vehicles saw a decrease to 22.9% [27][29]. - **Battery Installations**: China's EV battery installations increased by 33% year-on-year in August 2025, indicating robust growth in the sector [47][49]. - **LFP Market Share**: Lithium Iron Phosphate (LFP) batteries accounted for 82% of China's EV battery market in the first eight months of 2025 [49][52]. Conclusion - The Chinese EV market is experiencing significant shifts with emerging competitors gaining ground, a focus on supply chain improvements, and advancements in autonomous driving technology. The preference for resilient suppliers over OEMs reflects the current competitive landscape, with specific stocks highlighted for their growth potential.

Core Viewpoints - The company achieved a sales revenue of 1.567 billion yuan in the first half of 2025, representing a year-on-year growth of 67.06%, while the net profit was -5.233 billion yuan, compared to -5.089 billion yuan in the same period last year [1] - The market share for basic and overall assisted driving solutions among Chinese car manufacturers reached 45.8% and 32.4% respectively, maintaining the leading position [1] - The company’s processor shipments doubled to 1.98 million units, with hardware supporting highway assisted driving reaching 980,000 units, a sixfold increase from the previous year [1] Financial Performance - The sales gross margin and net margin for the first half of 2025 were 65.36% and -334.00% respectively, down from 79.04% and -543.59% in the same period last year [1] - Research and development expenses increased by 62% year-on-year, primarily due to rising cloud service costs and increased salaries for R&D personnel [1] Market Expansion - As of June 2025, the company has secured nearly 400 new model designations, with over 100 models featuring highway assisted driving capabilities [2] - The company is actively developing the HSD solution to address more complex driving scenarios, which has already received designations from multiple vehicle manufacturers [2] Profit Forecast and Investment Recommendations - Revenue projections for the company are estimated at 3.524 billion yuan, 5.254 billion yuan, and 7.898 billion yuan for 2025, 2026, and 2027 respectively, with net profits expected to be -1.836 billion yuan, -1.019 billion yuan, and 0.211 billion yuan [3] - The company is viewed positively as a key supplier of domestic intelligent driving chips and algorithms, benefiting from the trend of automotive intelligence [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook based on its position as a key supplier in the domestic smart driving chip and algorithm market, benefiting from the trend of automotive intelligence [4]. Core Insights - The company achieved a sales revenue of 1.567 billion yuan in the first half of 2025, representing a year-on-year growth of 67.06%, while the net profit was -5.233 billion yuan, slightly worse than the previous year's -5.089 billion yuan [1]. - The market share for basic and overall assisted driving solutions among Chinese automakers reached 45.8% and 32.4%, respectively, maintaining the leading position [1]. - The shipment of the company's Journey series processors doubled to 1.98 million units, with hardware supporting highway assisted driving reaching 980,000 units, a sixfold increase compared to the same period last year [1]. - The sales gross margin decreased to 65.36% from 79.04% year-on-year, primarily due to changes in revenue composition, with a significant increase in automotive product solutions [2]. - The company has secured nearly 400 new model designations, with over 100 models featuring highway assisted driving capabilities, and is actively expanding its overseas customer base [3]. Financial Forecast and Valuation - Projected revenues for 2025, 2026, and 2027 are 3.524 billion yuan, 5.254 billion yuan, and 7.898 billion yuan, respectively, with expected net profits of -1.836 billion yuan, -1.019 billion yuan, and 211 million yuan [4][6]. - The company is expected to benefit from the automotive intelligence trend, with a projected annual revenue growth rate of 48% in 2026 and 49% in 2027 [6][12]. - The earnings per share (EPS) is forecasted to improve from -0.13 yuan in 2026 to 0.02 yuan in 2027 [6].

Core Viewpoint - The article discusses the evolution of autonomous driving technology, particularly focusing on the transition from end-to-end systems to Vision-Language-Action (VLA) models, highlighting the differing approaches and perspectives within the industry regarding these technologies [6][32][34]. Group 1: VLA and Its Implications - VLA, or Vision-Language-Action Model, aims to integrate visual perception and natural language processing to enhance decision-making in autonomous driving systems [9][10]. - The VLA model attempts to map human driving instincts into interpretable language commands, which are then converted into machine actions, potentially offering both strong integration and improved explainability [10][19]. - Companies like Wayve are leading the exploration of VLA, with their LINGO series demonstrating the ability to combine natural language with driving actions, allowing for real-time interaction and explanations of driving decisions [12][18]. Group 2: Industry Perspectives and Divergence - The current landscape of autonomous driving is characterized by a divergence in approaches, with some teams embracing VLA while others remain skeptical, preferring to focus on traditional Vision-Action (VA) models [5][6][19]. - Major players like Huawei and Horizon have expressed reservations about VLA, opting instead to refine existing VA models, which they believe can still achieve effective results without the complexities introduced by language processing [5][21][25]. - The skepticism surrounding VLA stems from concerns about the ambiguity and imprecision of natural language in driving contexts, which can lead to challenges in real-time decision-making [19][21][23]. Group 3: Technical Challenges and Considerations - VLA models face significant technical challenges, including high computational demands and potential latency issues, which are critical in scenarios requiring immediate responses [21][22]. - The integration of language processing into driving systems may introduce noise and ambiguity, complicating the training and operational phases of VLA models [19][23]. - Companies are exploring various strategies to mitigate these challenges, such as enhancing computational power or refining data collection methods to ensure that language inputs align effectively with driving actions [22][34]. Group 4: Future Directions and Industry Outlook - The article suggests that the future of autonomous driving may not solely rely on new technologies like VLA but also on improving existing systems and methodologies to ensure stability and reliability [34]. - As the industry evolves, companies will need to determine whether to pursue innovative paths with VLA or to solidify their existing frameworks, each offering unique opportunities and challenges [34].

Core Viewpoint - The company is experiencing significant revenue growth driven by the mass production of the J6 series and is maintaining a leading market share in the ADAS front-view integrated machine and autonomous driving computing solutions market in China [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved revenue of 1.567 billion, a year-on-year increase of 67.6%, surpassing Bloomberg consensus expectations of 1.435 billion [2]. - The revenue from products and solutions reached 778 million, with a year-on-year increase of 250%, and delivery volume approached 2 million units, up 106% year-on-year [2]. - The average selling price increased by 70% year-on-year, with mid-to-high-end product revenue accounting for over 80% of the products and solutions revenue [2]. Group 2: Production and Market Expansion - The HSD has secured over 10 models from multiple OEMs, with mass production expected in H2 2025, which is anticipated to drive short-term growth [2]. - The company has made significant strides in internationalization, securing 30 domestic models from 9 joint venture car companies and 2 foreign car companies for overseas models, with an expected total delivery of over 7.5 million units [2]. - Collaborations with Bosch, Denso, and Continental are expected to enhance the company's market position through partnerships with overseas Tier 1 suppliers [2]. Group 3: Future Growth Potential - The company is expected to collaborate with Robotaxi operators in H2 2025, aiming to deploy tens of millions of HSD units within 3-5 years, which will accelerate the deployment of Robotaxi technology [2].