Group 1 - The core viewpoint is that the launch of the Horizon SuperDrive (HSD) solution by the company marks a significant change in the high-end autonomous driving market, with the ET5 model expected to be released in November 2025 [1] - The company has achieved a production milestone of over 10 million units for its Journey series chips, with a target of reaching 10 million units for HSD production in the next 3-5 years [1] - The company has established a European headquarters in Munich and is building deep connections with international clients such as Bosch, Continental, and Volkswagen, which may help expand its autonomous driving solutions globally [1] Group 2 - In the first half of 2025, the company achieved a market share of 45.8% in basic ADAS and 32.4% in overall ADAS solutions, leading the Chinese market [2] - The company saw a doubling of J-series chip shipments to 1.98 million units year-on-year, with shipments of chips supporting NOA functionality increasing fivefold to 980,000 units [2] - The company has secured nearly 90 new model designations, with over 15 models featuring mid-to-high level ADAS solutions entering mass production [2] Group 3 - The company has been included in the Hang Seng Composite Index and the Hang Seng Tech Index, enhancing its visibility and attracting passive fund inflows [2] - Revenue forecasts for 2025-2027 have been adjusted upwards, with expected shipments of 4 million, 5.04 million, and 7 million units, representing year-on-year growth of 38%, 26%, and 39% respectively [2] - Projected revenues for 2025, 2026, and 2027 are 3.62 billion, 5.85 billion, and 8.39 billion yuan, with year-on-year growth rates of 52%, 62%, and 43% respectively [2] Group 4 - The company is positioned as a rare third-party full-stack autonomous driving solution provider in China, benefiting from trends in domestic substitution, automotive intelligence, and edge AI development [3] - The target price for the company is set at 12.44 HKD, with a target PS of 27 times for 2026, corresponding to a target market value of 158 billion yuan [3] - Comparisons with peer companies suggest a PS of 21, 32, and 26 times for Nvidia, ARM, and Cambricon respectively for 2026 [3]

Investment Rating - The report maintains a "Recommended" rating for Horizon Robotics (09660.HK) with a target price of HKD 12.44 [2][7]. Core Views - The introduction of the Chery Star Era ET5 featuring Horizon's HSD autonomous driving solution is expected to drive accelerated growth, with the product anticipated to launch in November 2025 [2]. - The revenue forecasts for 2025-2027 have been adjusted positively, with expected shipments of 4 million, 5.04 million, and 7 million units respectively, reflecting year-on-year growth of 38%, 26%, and 39% [2]. Financial Summary - Main revenue projections for 2024A, 2025E, 2026E, and 2027E are HKD 2,384 million, HKD 3,620 million, HKD 5,851 million, and HKD 8,386 million, with year-on-year growth rates of 53.6%, 51.9%, 61.6%, and 43.3% respectively [3][8]. - The net profit attributable to shareholders is projected to be HKD 2,347 million in 2024, with losses of HKD 7,082 million, HKD 2,726 million, and HKD 1,436 million in 2025, 2026, and 2027 respectively [3][8]. - Earnings per share (EPS) are forecasted at HKD 0.17 for 2024, with negative EPS of HKD -0.51, -0.20, and -0.10 for the following years [3][8]. Market Position and Growth Potential - Horizon Robotics holds the leading market share in China for basic ADAS and overall ADAS solutions, with respective shares of 45.8% and 32.4% [7]. - The company has achieved significant growth in chip shipments, with 1H25 figures showing a doubling in J series chip shipments to 1.98 million units and a fivefold increase in J5/J6 chips supporting NOA functionality to 980,000 units [7]. - The establishment of a European headquarters and partnerships with international clients like Bosch and Volkswagen positions the company favorably for global expansion [7]. Valuation Perspective - The report suggests a target price-to-sales (PS) ratio of 27x for 2026, leading to a target market capitalization of HKD 158 billion [7]. - The valuation is compared to peers such as Nvidia, ARM, and Cambricon, with their projected PS ratios for 2026 being 21, 32, and 26 respectively [7].

Core Viewpoint - Horizon Robotics, founded by Yu Kai, has seen a significant surge in stock price and market capitalization, reaching approximately HKD 136 billion, an increase of about HKD 88 billion since the beginning of the year [2]. Group 1: Company Performance - Horizon Robotics has capitalized on the growing demand for intelligent driving solutions, with its "Journey" chip family achieving cumulative shipments of over 10 million units [3]. - The company reported a revenue of CNY 1.57 billion for the first half of the year, marking a year-on-year increase of 67.6% [3]. - Despite the revenue growth, the company has not yet achieved profitability, with an operating loss of CNY 1.59 billion during the same period [8]. Group 2: Market Position and Partnerships - Horizon Robotics collaborates with nearly all major Chinese automakers, including Volkswagen, BYD, and Li Auto, with nearly 400 new vehicle models confirmed by the end of June [4]. - The company holds a market share of 45.8% for basic driving assistance solutions and 32.4% for overall solutions among Chinese automakers [12]. - The average selling price of Horizon's automotive products and solutions has increased to 1.7 times that of the same period last year [16]. Group 3: Future Prospects - The company is targeting the RoboTaxi market, with plans to collaborate with several operating companies in the second half of the year [18]. - Horizon Robotics aims to deploy millions of its HSD system in the next 3 to 5 years, enhancing its data testing capabilities for RoboTaxi technology [18]. - The penetration rate of advanced driving assistance systems among domestic brands is expected to rise from 51% at the end of 2024 to 59% in the first half of 2025 [6]. Group 4: R&D and Innovation - The company invested CNY 2.3 billion in R&D in the first half of the year, a 62% increase year-on-year [9]. - Horizon Robotics emphasizes high R&D investment to maintain its market position, with a focus on developing advanced chip generations [10].

Core Viewpoint - Horizon Robotics has demonstrated strong performance in the first half of 2025, with significant revenue and gross profit growth, driven by the successful mass production of the Journey 6 series [1][2] Financial Performance - In the first half of 2025, Horizon achieved revenue of 1.567 billion yuan, a year-on-year increase of 67.6% [1] - Gross profit reached 1.024 billion yuan, with a gross margin of 65.4%, leading the industry [1] - The average selling price of automotive products and solutions increased to 1.7 times that of the same period last year, with product prices rising by 70% [1] Product and Market Development - The shipment volume of Horizon's product solutions reached 1.98 million sets, doubling year-on-year, with high-end product solutions accounting for 49.5% of total shipments [1] - The Journey family has surpassed 10 million cumulative shipments, making Horizon the first smart driving technology company in China to achieve this milestone [2] - The market share for basic and overall assisted driving solutions stands at 45.8% and 32.4%, respectively, solidifying Horizon's position as the leader in the smart driving sector [2] Future Outlook - Horizon aims to achieve a shipment target of 4 million units for the year, with high-end product shipments maintaining a 50% share [4] - The penetration rate of high-end assisted driving features is expected to rise, with vehicles equipped with such features increasing from 20% at the end of 2024 to 32.4% in the first half of 2025 [5] - Horizon plans to reach a milestone of 10 million units for its Horizon SuperDrive (HSD) system within five years, with multiple automakers already committed to the technology [5][7] R&D and Investment - Horizon's R&D expenditure for the first half of the year was 2.3 billion yuan, a year-on-year increase of 62%, reflecting a narrowing proportion of R&D spending relative to total revenue [10] - The company maintains a strong cash reserve of 16.1 billion yuan, ensuring liquidity for ongoing investments in advanced algorithms and software development [10] - Horizon has received recognition and investment from numerous prominent institutions, including major automotive groups and financial investors, indicating strong market confidence [10][11] Market Position - Horizon is poised to solidify its status as a top player in the high-end assisted driving market while maintaining its leadership in the overall smart driving sector [8] - Recent strong performance has led to positive ratings from several investment institutions, indicating confidence in Horizon's long-term growth potential [11]

Core Viewpoint - Horizon has delivered an impressive performance in the intelligent driving competition, showcasing significant revenue growth and industry-leading gross margins in its recent financial report for the first half of the year [1][9]. Revenue and Growth - Horizon's revenue surged by 67.6% year-on-year to 1.567 billion yuan, with product solutions contributing a remarkable 250% increase to 778 million yuan [1][2]. - The company achieved a gross profit of 1.024 billion yuan, resulting in a gross margin of 65.4%, leading the industry [1][9]. - The hardware shipment of Horizon's Journey series exceeded 10 million units, making it the first intelligent driving technology company in China to reach this milestone [1]. Product and Market Dynamics - The increase in revenue is attributed to a significant rise in shipment volumes, with the Journey series processing hardware shipments reaching 1.98 million units, doubling year-on-year [5]. - The hardware supporting high-speed auxiliary driving features saw shipments of 980,000 units, a sixfold increase compared to the same period last year [5][8]. - The market for intelligent driving is shifting towards higher-end features, with models equipped with advanced driving assistance systems (ADAS) increasing from 20% to 32% of total sales [8]. Research and Development Investment - Horizon's R&D expenses reached 2.3 billion yuan, a 62% increase year-on-year, primarily for cloud services and urban auxiliary driving system investments [9]. - The company is focused on enhancing its delivery capabilities through substantial R&D investments, adhering to the principle of "investing first, yielding later" in the technology-intensive intelligent driving sector [9]. Future Outlook - The company is optimistic about the second half of the year, projecting total shipments to exceed 4 million units, with a balanced distribution between low-end and mid-to-high-end products [10][11]. - The Horizon SuperDrive (HSD) system is set to enter mass production, with the first model featuring this system, the Xingtai ET5, recently unveiled [10][14]. - Horizon is also expanding its partnerships with international automotive companies, aiming to penetrate overseas markets and establish collaborations with top-tier suppliers [17]. Strategic Insights - Horizon's success is attributed to its strategic focus on the automotive sector and its differentiated approach, emphasizing a "soft and hard integration" technology route [18][19]. - The company maintains a cautious financial strategy, ensuring sufficient cash reserves even during challenging periods, allowing it to navigate uncertainties effectively [21].

Core Viewpoint - Horizon has delivered an impressive performance in the intelligent driving competition, showcasing significant revenue growth and leading gross margins in the industry [1][2]. Revenue Growth and Financial Performance - In the first half of the year, Horizon's revenue surged by 67.6% year-on-year to 1.567 billion yuan, with product solutions contributing a staggering 250% increase to 778 million yuan [2][4]. - The gross profit reached 1.024 billion yuan, with a comprehensive gross margin of 65.4%, leading the industry [2][12]. - The company achieved a milestone of over 10 million units shipped for its Journey series hardware, becoming the first intelligent driving technology company in China to reach this figure [2][12]. Product and Solution Breakdown - Horizon's revenue sources are divided into two categories: product solutions and software & licensing services, with both categories contributing approximately equally to the total revenue [4]. - The revenue from product solutions is 3.5 times that of the same period last year, attributed to both volume and price increases [8]. Market Trends and Future Outlook - The market for intelligent driving is rapidly evolving, with mid to high-level assisted driving features now present in 32% of new car sales, up from 20% at the end of last year [10]. - Horizon anticipates that high-level assisted driving (HSD) will become standard in vehicles priced between 100,000 to 150,000 yuan within the next 2 to 3 years, with an expected annual shipment of several million units [10][12]. - The company has secured nearly 400 new model designations, with over 100 models featuring mid to high-level assisted driving capabilities [10]. Research and Development Investment - Horizon's R&D expenses for the first half of the year reached 230 million yuan, a 62% increase year-on-year, primarily focused on urban assisted driving systems [12]. - The company emphasizes a "first invest, then yield" approach typical in the technology-intensive intelligent driving sector, aiming to enhance delivery capabilities [12]. Strategic Partnerships and Global Expansion - Horizon is actively expanding its client base among foreign automotive companies, establishing strategic partnerships with top-tier suppliers like Bosch and Denso [17]. - The company has secured model designations with nine joint venture automakers in China and is working with two Japanese automakers for overseas market models [17]. Methodological Approach and Company Philosophy - Horizon's success is attributed to its commitment to continuous R&D investment and adherence to fundamental methodologies, such as competing in areas with less competition and maintaining a cautious approach to risk [18][20]. - The company has maintained a strong cash position, ensuring stability even during challenging periods, and focuses on long-term strategic goals rather than short-term visibility [21][22].

Core Insights - Horizon Robotics has recently announced significant milestones, including the upcoming production of over 10 million units of its "Journey" family of intelligent driving solutions, making it the first company in China to reach this milestone [1][4] - The company has launched the largest upgrade of its Horizon SuperDrive (HSD) system, which is designed to provide a seamless and reliable driving experience akin to that of a personal driver [1][8] - Horizon Robotics reported impressive financial results for the first half of the year, with revenues of 1.567 billion yuan, a year-on-year increase of 67.6%, and a gross profit of 1.024 billion yuan, up 38.6%, resulting in a gross margin of 65.4% [1][6] Financial Performance - The company achieved a doubling of product solution shipments to 1.98 million units in the first half of the year, with revenue from product solutions increasing 2.5 times to 778 million yuan [4][5] - The high-end solution deliveries reached 980,000 units, accounting for 49.5% of total shipments, and contributed over 80% of the revenue from product solutions [4][5] - Horizon Robotics' R&D expenditure rose to 2.3 billion yuan, a 62% increase year-on-year, reflecting the company's commitment to innovation [5][6] Market Position and Trends - The global market for intelligent driving solutions is projected to grow from 19.1 billion yuan in 2024 to 123.4 billion yuan by 2030, with a compound annual growth rate of 36.5% [3] - Horizon Robotics holds a 45.8% market share in the domestic ADAS front-view integrated machine market and a 32.4% share in the domestic auxiliary driving computing solutions market [5] - The company has established partnerships with major domestic brands such as BYD, Chery, and NIO, and has also expanded its global footprint by collaborating with international suppliers like Bosch and Denso [7][9] Product Development and Innovation - The HSD system is expected to enhance the company's market performance and is being positioned as a "Chinese version of FSD" [2][8] - Horizon Robotics has secured nearly 400 new model designations, significantly increasing its market presence compared to the previous year [7] - The company is focused on building a competitive advantage through integrated hardware and software solutions, which has been instrumental in its market success [8][9] Recognition and Future Outlook - Horizon Robotics has been included in several authoritative indices, such as the FTSE Global Index and MSCI China Index, indicating growing recognition of its investment value [9] - The company is expected to continue its strong performance in the domestic market while enhancing its influence in international markets through ongoing product improvements [9]

Core Insights - The 2025 International Automotive and Supply Chain Expo in Hong Kong showcased cutting-edge vehicles and technologies, highlighting the future of transportation [2] - Horizon Robotics, a leading smart driving technology company, presented its Horizon SuperDrive (HSD) and Journey 6 series, receiving the 2025 China Automotive Supply Chain Innovation Achievement Award [2] - The company emphasizes its commitment to technological innovation and aims to provide optimal, flexible, and upgradable smart driving solutions for global customers [2] Company Developments - Horizon Robotics introduced the "User Trust in Smart Driving" formula, focusing on safety, professionalism, and intimacy to enhance user experience in urban driving [3] - The HSD system features an end-to-end architecture that ensures seamless operation from photon input to trajectory output, providing a human-like driving experience [3] - The system incorporates end-to-end reinforcement learning and a digital twin world to continuously improve driving capabilities [3] Product Offerings - HSD offers various configurations to meet diverse user needs, including HSD 300 for general urban driving, HSD 600 for high-performance L2 urban driving, and HSD 1200 for all-scenario driving [4] - The modular design of the Horizon Cell "magazine system" allows for easy upgrades of the onboard computing platform, similar to upgrading a personal computer [3][4] Market Collaborations - Horizon Robotics has partnered with Chery Group for the mass production of HSD, which will debut in the "Falcon" model under the Exeed brand, expected to launch in Q3 2025 [5] - The company has established close collaborations with leading Tier-1 companies such as Bosch, Denso, and ZF, with over 8 million units of its pre-installed solutions shipped to date [5] - Currently, one in three smart vehicles in the market is equipped with Horizon's driving assistance solutions [5]