Investment Rating - The report assigns a BUY rating to Horizon Robotics, indicating a positive outlook for the company's stock performance [1]. Core Insights - Horizon Robotics has raised its revenue CAGR guidance from 50% to 60% due to the rollout of Horizon SuperDrive (HSD), positioning the company favorably in the city NOA solutions market and other advanced driving technologies [1]. - The company is expected to achieve significant sales growth, with HSD sales volume projected to increase 18 times YoY to 0.4 million units in FY26E, and more than double in FY27E and FY28E [8]. - Horizon Robotics is also targeting pilot operations of robotaxis by Q3 2026, showcasing its comprehensive autonomous driving capabilities [8]. - The management's revenue projections indicate a strong growth trajectory, with expected revenues of RMB 5.9 billion in FY26E and RMB 9.8 billion in FY27E, driven by increased shipments and higher contributions from HSD [2][11]. Financial Summary - Revenue is projected to grow from RMB 2.4 billion in FY24A to RMB 15.6 billion in FY28E, reflecting a YoY growth rate of 53.6% in FY24A and 59.6% in FY28E [2][11]. - Gross margin is expected to decline from 77.3% in FY24A to 60.8% in FY28E, indicating potential cost pressures as the company scales [2][11]. - Operating profit is forecasted to improve from a loss of RMB 3.3 billion in FY25A to a profit of RMB 1.6 billion in FY28E, suggesting a path to profitability [2][11]. - Adjusted net profit is anticipated to turn positive by FY28E, reaching RMB 2.5 billion [8][11]. Valuation - The target price for Horizon Robotics is set at HK$10.00, representing a 37.9% upside from the current price of HK$7.25 [3]. - The valuation is based on a price-to-sales (P/S) ratio of 13x for FY27E, which is considered justified given the company's unique position in the autonomous driving and robotics sectors [8].

Financial Data and Key Metrics Changes - The company achieved a revenue of CNY 3.76 billion in 2025, representing a year-on-year increase of 57.7% with a comprehensive gross margin of 64.5% [35][70] - The adjusted operating loss was CNY 2.37 billion, primarily due to increased R&D investments [37][72] - The net loss reported was CNY 10.5 billion, compared to a net profit of CNY 2.0 billion in the previous year, mainly driven by an increase in the fair value of certain convertible bonds [73] Business Line Data and Key Metrics Changes - Revenue from automotive solutions surged by 144% to CNY 1.62 billion, accounting for 43% of total revenue, up from 28% in 2024 [41][70] - The automotive grade SoC solution annual shipments exceeded 4 million units, with a year-on-year growth of about 39% [19] - Revenue from licensing and services increased by 17.4% year-on-year to CNY 1.94 billion [46][71] Market Data and Key Metrics Changes - The penetration rate of intelligent assisted driving in China's passenger car market reached 68% in 2025, with advanced models accounting for 43% of all intelligent vehicles [4][5] - Horizon Robotics captured 44% of the market share in the NOA segment among Chinese domestic brands [16][17] - The company secured mass nominations from 11 automakers for over 40 overseas models, with a cumulative lifecycle export nominations reaching 2 million units [29][33] Company Strategy and Development Direction - The company aims to help Chinese domestic brands go global, assist joint venture brands in the domestic market, and support overseas brands in their intelligent transformation [29][31] - Horizon Robotics is focusing on the democratization of intelligent assisted driving, with plans to expand into the mainstream market priced around CNY 100,000 [10][12] - The company is committed to increasing R&D investments to enhance its AI foundation models and develop L4 and L5 level autonomous driving technologies [39][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a high gross margin above 60% due to the high-margin business model of SoC plus software licensing [100][107] - The company anticipates a strong product cycle and a full pipeline for nominations, projecting a revenue growth rate of around 60% for the next few years [50][81] - The management highlighted the importance of achieving a critical mass of intelligent driving mileage to transition to a subscription model for HSD [26][125] Other Important Information - Horizon's HSD solution entered mass production in November 2025, quickly surpassing 22,000 units in shipments [22] - The company plans to launch a full vehicle AI Agentic SoC and OS, aiming to provide a comprehensive intelligent driving experience [54][60] - Horizon Robotics is not focused on competing directly with Qualcomm in the mature cockpit market but aims to innovate through technological advancements [56][122] Q&A Session Summary Question: What drives the strong revenue growth and how can it sustain a 60% CAGR? - Management indicated that the automotive segment's revenue growth will accelerate to around 60% in 2026, driven by increased shipping volumes and higher ASPs [81][82] Question: What is the shipment target for HSD in 2026? - The company estimates HSD shipments will reach about 400,000 units in 2026, with significant progress in negotiations with top-tier automakers [92] Question: What is the outlook on gross margin performance? - Management is confident in maintaining a gross margin above 60% due to the high-margin nature of their business model [100][107] Question: How is Horizon addressing memory price hikes? - The company has locked in memory supply prices and believes that fluctuations will not significantly impact gross margins [101][102]

Financial Data and Key Metrics Changes - The company achieved a revenue of CNY 3.76 billion in 2025, representing a year-on-year increase of 57.7% with a gross margin of 64.5% [28][49] - The adjusted operating loss was CNY 2.37 billion, primarily due to increased R&D investments [29][51] - The net loss reported was CNY 10.5 billion, compared to a net profit of CNY 2.0 billion in the previous year, mainly driven by fair value changes of convertible bonds [51] Business Line Data and Key Metrics Changes - Revenue from automotive solutions surged by 53.9%, with product solutions revenue increasing by 144% to CNY 1.62 billion [48][49] - The proportion of SoC solutions supporting NOA functions reached 45% of total shipments, contributing over 80% of revenue [34] - The automotive grade SoC solution annual shipments exceeded 4 million units, with a year-on-year growth of about 39% [18] Market Data and Key Metrics Changes - The penetration rate of intelligent assisted driving in China's passenger car market reached 68%, with advanced models accounting for 43% of all intelligent vehicles sold [4][5] - Horizon Robotics captured 44% of the market share in the domestic brand NOA market, ranking first [15][16] - The sales share of NOA level models in the price range under CNY 200,000 rose from 5% to over 50% [6] Company Strategy and Development Direction - The company aims to help Chinese domestic brands go global, assist joint venture brands in the domestic market, and support overseas brands in their transition to intelligent driving [25] - Horizon Robotics is focusing on the democratization of intelligent assisted driving, expanding its market presence in the mass market [9][10] - The company plans to launch the Agentic Car SoC and Agentic Car OS, aiming to provide a comprehensive intelligent driving experience [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a high gross margin above 60% due to the high-margin nature of their business model [72][77] - The company anticipates a revenue growth rate of around 60% for the coming years, driven by strong product cycles and a robust pipeline of nominations [37][60] - The management highlighted the importance of R&D investment in maintaining technological leadership and preparing for future advancements in autonomous driving [31][50] Other Important Information - Horizon's HSD solution has become a significant factor in consumer car-buying decisions, with 83% of top-tier models featuring HSD [21] - The company has secured mass nominations from 11 automakers for over 40 overseas models, indicating strong global expansion efforts [25][27] - The company is actively negotiating with top-tier Chinese automakers for HSD production nominations, expecting a significant increase in shipments [67] Q&A Session Summary Question: What drives the strong revenue growth and how can it sustain a 60% CAGR? - Management indicated that the growth is driven by increased shipping volumes and higher average selling prices (ASP) of advanced SoCs, with expectations for continued strong performance in 2026 [55][59] Question: What is the shipment target for HSD in 2026? - The company estimates HSD shipments will reach about 400,000 units in 2026, with significant progress in negotiations with major automakers [67] Question: What is the outlook on gross margin performance? - Management is confident in maintaining a gross margin above 60%, citing the high-margin nature of their SoC and software licensing business model [71][77] Question: How is the company addressing memory price hikes? - The company has locked in memory supply prices and does not expect fluctuations to impact gross margins significantly, focusing on SoC and software rather than other hardware [73][74]

Financial Data and Key Metrics Changes - The company achieved a revenue of CNY 3.76 billion in 2025, representing a year-on-year increase of 57.7% with a gross margin of 64.5% [27][48] - The adjusted operating loss was CNY 2.37 billion, primarily due to increased R&D investments [28][51] - The automotive solutions revenue surged by 53.9%, with product solutions revenue increasing by 144% to CNY 1.62 billion [48][49] Business Line Data and Key Metrics Changes - The automotive grade SoC solution annual shipments exceeded 4 million units, with a year-on-year growth of about 39% [16] - The market share for advanced intelligent assisted driving models reached 14.4%, nearly tying with Huawei [14] - The proportion of SoC shipments supporting NOA functions reached 45%, nearly five times the shipments during the same period in 2024 [16][18] Market Data and Key Metrics Changes - The penetration rate of intelligent assisted driving in China's passenger car market reached 68%, with advanced models accounting for 43% of all intelligent vehicles [4][5] - In the price range under CNY 200,000, domestic brands captured a significant market share, with NOA level models rising from 5% to over 50% [6][15] Company Strategy and Development Direction - The company aims to help Chinese domestic brands go global, assist joint venture brands in the domestic market, and support overseas brands in their transition to intelligent driving [23][25] - The focus is on democratizing intelligent assisted driving and expanding into higher price ranges with advanced solutions [6][19] - The company plans to launch the Agentic Car SoC and OS, aiming to provide a comprehensive intelligent driving experience [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a high gross margin above 60% due to the high-margin nature of the SoC and software licensing business model [71][76] - The company anticipates a strong growth momentum with a projected revenue growth rate of around 60% for the coming years [36][59] - The management highlighted the importance of R&D investment in maintaining technological leadership and preparing for future autonomous driving capabilities [29][50] Other Important Information - The company has secured nominations from 11 automakers for over 40 overseas models, indicating strong global expansion efforts [23] - The HSD solution has become a significant factor in consumer car-buying decisions, with 83% of top-tier models featuring HSD [20][21] Q&A Session Summary Question: What drives the strong revenue growth and how can it sustain a 60% CAGR? - Management indicated that the growth is driven by increased shipping volumes and higher average selling prices (ASP), with expectations for continued strong performance in 2026 [55][59] Question: What is the shipment target for HSD in 2026? - The company estimates HSD shipments will reach about 400,000 units in 2026, with significant progress in negotiations with top-tier automakers [66] Question: What is the outlook on gross margin performance? - Management is confident in maintaining gross margins above 60% due to the high-margin nature of their business model and locked-in memory supply prices [69][76] Question: How is the company addressing memory price hikes? - The company has locked in memory supply prices and believes that fluctuations will not significantly impact gross margins, focusing on innovation and cost efficiency [72][76] Question: What differentiates Horizon from competitors like Qualcomm and NVIDIA? - Horizon's integrated hardware and software solutions provide a competitive edge, allowing for a seamless transition from intelligent driving to cockpit integration, unlike competitors who struggle with comprehensive solutions [84][86]

Core Viewpoint - Horizon Robotics successfully completed a share placement and subscription agreement, raising approximately 6,339.4 million HKD through the issuance of 639,028,800 shares at a price of 9.99 HKD per share, leading to changes in its shareholding structure [2] Use of Proceeds - The net proceeds from the subscription will be allocated to four main areas: - Expanding overseas market operations (10%) [3] - Investing in research and development to enhance technical capabilities (60%) [4] - Investing in emerging fields, such as plans related to Robotaxi (10%) [5] - Strategic investments in upstream and downstream business partners (20%) [6] Overseas Market Expansion - Horizon Robotics announced the establishment of its European headquarters in Munich to enhance local operational capabilities in the EU market, supporting both Chinese and global automotive manufacturers [3] Research and Development Investment - The company plans to invest 3,803.64 million HKD in R&D to improve technical capabilities and support the large-scale application of advanced driver assistance solutions, anticipating increased cloud resource needs for software updates and model upgrades [4] Emerging Field Investments - Horizon Robotics is collaborating with a Robotaxi company to develop cost-effective and reliable smart driving technologies, requiring increased R&D investment to optimize Robotaxi fleet solutions [5] Strategic Investments - The company aims to strengthen collaborations with upstream and downstream partners through private equity investments and cornerstone investments, recently participating in the IPO of Chery Automobile in Hong Kong and the capital increase of FAW Bestune [6]

Summary of Horizon Robotics Conference Call Company Overview - Horizon Robotics is a leading supplier of intelligent driving and edge AI SoC and solutions in China, with over 310 model design wins for its intelligent driving solutions by the end of 2024 [doc id='13']. Industry Insights - The Chinese government is actively promoting the commercialization of L3 intelligent connected vehicles, which is expected to enhance the penetration of advanced driving solutions [doc id='3'][doc id='17']. - Major Chinese automotive OEMs are advancing their intelligent driving technologies, indicating a competitive landscape for Horizon Robotics [doc id='20']. Key Points and Arguments 1. **Optimistic Outlook on HSD Deployment**: - The company has raised its revenue forecast for Horizon SuperDrive (HSD) by 32% to 17% for 2026-2028, reflecting positive feedback from production solution trials and entry into the Robotaxi sector [doc id='1'][doc id='21']. - The stock price has increased by 42% over the past month, outperforming the CSI AI Index by 8 percentage points [doc id='1']. 2. **Strategic Partnerships**: - Horizon Robotics signed a strategic cooperation agreement with Robotaxi manufacturer Hello to develop L4-level intelligent driving solutions, showcasing recognition of its J6P chip and HSD solutions by higher-tier autonomous driving clients [doc id='3'][doc id='16']. 3. **Performance Metrics**: - The HSD solution has achieved a latency of 150 milliseconds and an industry-leading takeover rate in complex urban environments, enhancing confidence in its future performance [doc id='2']. 4. **Valuation Adjustments**: - The target price has been raised to HK$13.20 based on DCF analysis, reflecting higher revenue and cash flow assumptions [doc id='4'][doc id='26']. - The current stock price corresponds to a 20x PS for 2026, which is about 30% higher than major competitors, but the company’s revenue CAGR for 2025-2027 is projected to be 80%, significantly above the industry average [doc id='28']. 5. **Financial Projections**: - Revenue is expected to reach RMB 10.8 billion by 2029, accounting for approximately 60% of its automotive solutions revenue [doc id='21']. - The company anticipates a significant increase in non-automotive solutions revenue, with a CAGR of 103% from 2024 to 2028 [doc id='10']. 6. **Profitability Outlook**: - Horizon Robotics is expected to turn positive in EBIT by 2027, with a projected EBIT margin of 4% by 2028 [doc id='11']. Additional Important Insights - The company’s high R&D expenses, which are 132% of revenue, are a concern compared to peers, where the average is 10-25% [doc id='14']. - The government’s push for intelligent connected vehicles is expected to stimulate consumer demand and technological advancements in the automotive sector [doc id='18']. Conclusion - Horizon Robotics is positioned to benefit from structural trends in the automotive and AI sectors, with optimistic revenue growth forecasts and strategic partnerships enhancing its market position. The valuation remains attractive despite a higher PS ratio compared to competitors, supported by strong growth projections.

Summary of Horizon Robotics Conference Call Company and Industry Overview - **Company**: Horizon Robotics (Ticker: 9660.HK) - **Industry**: China Autos & Shared Mobility - **Market Capitalization**: Rmb124,906.9 million - **Current Share Price**: HK$10.17 (as of September 15, 2025) - **Price Target**: HK$10.50 - **52-Week Range**: HK$10.64 - HK$3.32 - **Average Daily Trading Value**: HK$829 million [7][10] Key Developments - **Horizon SuperDrive (HSD) Upgrade**: The HSD urban driving assistance system has been upgraded to an end-to-end architecture with reinforcement learning capabilities, set to begin mass production soon [2][10]. - **Performance Improvements**: The upgrade has reduced latency by 25-50% compared to the previous rule-based model, leading to a smoother and more human-like driving experience [3][10]. - **Test Ride Insights**: During a 40-minute test ride, the upgraded HSD system demonstrated significant improvements in handling urban scenarios, although it did not utilize lidar technology [4][10]. Strategic Insights - **Market Positioning**: The J6P+HSD platform's adaptive generalization capability allows it to cater to diverse client needs, with most project wins being for J6P/HSD bundles [5][10]. - **Future Market Trends**: The transition from L2.5 to L3 automation is anticipated to be a critical competitive battleground, with L4/Robotaxi capabilities also being a future goal [5][10]. Financial and Market Analysis - **Valuation Methodology**: The valuation is based on a probability-weighted DCF model with a WACC of 13.1% and a long-term growth rate of 3% [11][10]. - **Risks**: Potential risks include slower-than-expected ADAS/AD adoption in China, supply chain disruptions, and competition from OEMs developing in-house hardware [13][10]. Conclusion - **Commercialization Significance**: The commercialization of HSD is viewed as a pivotal step for Horizon Robotics to expand its business scope beyond mass market hardware offerings, enhancing its competitive edge in the autonomous driving technology sector in China [10][11].

Financial Data and Key Metrics Changes - Total revenue for the first half of 2025 reached RMB 1.57 billion, a year-on-year increase of 67.6% [18] - Revenue from automotive solutions surged by 67%, with product solutions revenue increasing by 250% to RMB 777.8 million [18][19] - Gross profit margin stood at 65.4%, maintaining a strong position compared to other automotive solution providers [20] Business Line Data and Key Metrics Changes - Shipment volume doubled year-on-year, with approximately 2 million units of automotive-grade processing hardware shipped [8] - Mid to high-level intelligent driving solutions accounted for over 80% of revenue, reflecting a significant shift towards higher-end products [13] - Average selling price (ASP) of solutions increased by 70% compared to the previous year [14] Market Data and Key Metrics Changes - Domestic brands' market share in the Chinese passenger car market exceeded 63%, with the penetration rate of intelligent driver assistance rising from 51% to 59% [5][6] - The market share for Horizon in the ADAS basic assisted driving market was 45.8%, and 32.4% in the overall intelligent assisted driving computing solutions market among Chinese domestic brands [8] Company Strategy and Development Direction - The company aims to advance its position in the high-end intelligent driving market, focusing on the development of the Horizon SuperDrive (HSD) solution [12][16] - Strategic investments in R&D are being made to enhance cloud services and support the development of advanced intelligent driving solutions [20][60] - Horizon is expanding its international footprint, having secured model nominations from two Japanese car manufacturers and partnerships with global automotive groups [10][11][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained growth potential in the intelligent driving market, driven by rising volumes and prices [6][10] - The company anticipates significant growth opportunities from the increasing demand for high-level intelligent driving solutions and the upcoming launch of HSD [12][39] - Management highlighted the importance of adhering to strict industry standards and regulations to foster growth in the intelligent driving ecosystem [54][55] Other Important Information - The company recorded an adjusted operating loss of RMB 1.1 billion, reflecting increased R&D investments [22][23] - Cumulative shipments of the Journey series processing hardware exceeded 10 million units, marking a significant milestone for the company [14] Q&A Session Summary Question: Major customers for mid to high-end products - The largest customers in the first half of 2025 were BYD and Auto Li, with both companies significantly increasing their shipments of Horizon's solutions [27][28] Question: Outlook for Journey 6E and HSD revenue contributions - The ASP for J6P and HSD is expected to be significantly higher than previous models, indicating strong future revenue potential [32][34] Question: Volume and ASP guidance for the second half of 2025 - The company anticipates achieving total shipments of around 4 million units, with a balanced mix of low, mid, and high-end solutions [29][42] Question: Details on global customers and solutions - While specific names could not be disclosed, the company is collaborating with leading global automotive groups and joint ventures in China [45][48] Question: Anticipated deployments of robotaxi and L2 standards - The company plans to launch robotaxi technologies within the next three to five years, leveraging partnerships to enhance data collection and validation [56][57] Question: Insights on R&D spending plans - R&D expenditures are expected to continue increasing, particularly for cloud computing resources, which are crucial for developing advanced intelligent driving solutions [60]

Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Automotive technology, specifically focusing on autonomous driving (AD) and advanced driver-assistance systems (ADAS) Key Financial Projections - **1H25 Revenue Growth**: Expected to grow 58% YoY to Rmb1.5 billion, driven by J6 series chip deliveries [1][2] - **Segment Revenue Breakdown**: - Auto product revenues: Rmb708 million (+218% YoY) - Licenses, services, and others: Rmb768 million (+8% YoY) [2] - **Gross Margin**: Projected to decline to 65% in 1H25 from 79% in 1H24, with gross profits maintaining a 30% YoY growth to Rmb960 million [2][12] - **Operating Losses**: Anticipated operating loss of Rmb1.4 billion in 1H25, compared to Rmb1.1 billion in 1H24 [2][12] Product Developments - **J6 Series Chips**: Introduction of J6B (entry-level) and J6P (high computing) chips to enhance sales volume [1][2] - **Horizon SuperDrive (HSD)**: Integrated software/hardware solutions for urban NOA features set to begin mass shipment, expected to increase vehicle content value [1][3][7] Market Position and Strategy - **Market Share**: Anticipated growth in ADAS/AD market share from 2% in 2021 to 9% by 2025E, with significant revenue contributions from AD chips [17] - **Competitive Advantage**: Integration of software and hardware to enhance performance and build a competitive moat [7] Earnings Revisions and Valuation - **Earnings Revisions**: EPS estimates for 2025-30E revised down due to margin dilution from growing chip business, with net income projections adjusted to -Rmb2.7 billion in 2025E [12][23] - **Target Price**: Reduced 12-month target price to HK$13.13, based on an EV/EBITDA multiple of 26.0x [14][23] Risks and Challenges - **Key Risks**: - Increased competition and pricing pressure in the auto supply chain - Slower product mix upgrades towards AD - Expansion challenges in the customer base - Supply chain risks due to geopolitical tensions [24] Conclusion - **Investment Recommendation**: Maintain a "Buy" rating on Horizon Robotics, with a significant upside potential based on projected revenue growth and market expansion [1][25]

地平线机器人-W系列 车中旭霞 智能驾驶芯片深度 《 智能驾驶芯片行业专题-智能驾驶进入快车道，地平线机器人-W和黑芝麻智能的投资价值分析 》——20250207 公司点评 《 地平线机器人-W（09660.HK）-2024年收入同比增长54%，智能平权时代征程6系列芯片加速放量》 ——20250328 《地平线机器人-W（09660.HK）-地平线征程6量产上车，共启全民智驾时代新篇》 ——20250309 核心观点 2024年公司实现营业收入23.8亿元，同比增长54% 2024年，地平线机器人-W实现总收入为23.8亿元，同比增长53.6%；净利润为23.5亿元，2023年为-67.39亿元，主要系 优先股及其他金融负债的公允价值变动收益46.77亿元影响（2023年为-47.6亿元）。2024年公司经调整经营亏损14.95 亿，相比2023年的16.87亿元有所收窄。 分业务来看， 2024年，汽车解决方案收入23.12亿元，同比增加57.2%，1）汽 车产品解决方案收入6.64亿元，同比增加31.2%，主要系公司全年交付量增加所推动；2）授权及服务业务收入16.58亿 元，同比增加70.9%，主要是 ...