Core Insights - The company reported a significant revenue growth of 67.64% year-on-year for H1 2025, reaching 1.567 billion yuan, primarily driven by the rapid increase in shipments of the Chengcheng 6 processing hardware and a 250% increase in automotive product solutions revenue [1][2] - Despite the revenue growth, the company recorded a net loss attributable to shareholders of 5.233 billion yuan, which is a year-on-year increase of 1.35 billion yuan, and a Non-GAAP net loss of 1.333 billion yuan, an increase of 5.29 million yuan year-on-year [1][2] Revenue Growth - The revenue for H1 2025 was 1.567 billion yuan, reflecting a year-on-year increase of 67.64% [2] - The automotive product solutions business saw a remarkable revenue increase of 250%, significantly contributing to overall revenue growth [2] Profitability - The gross profit margin for H1 2025 was 65.36%, a decrease of 13.68 percentage points year-on-year, with the automotive product solutions business gross margin at 45.6%, an increase of 3.9 percentage points [2] - The company’s net loss attributable to shareholders was 5.233 billion yuan, an increase of 1.35 billion yuan year-on-year, while the Non-GAAP net loss was 1.333 billion yuan, an increase of 5.29 million yuan year-on-year [2] Cost Structure - The expense ratios for sales, management, R&D, and financial expenses were 17.37%, 19.60%, 146.80%, and 10.86%, respectively, with year-on-year changes of -3.86, -6.41, -5.10, and +11.69 percentage points [2] - The increase in financial expense ratio was attributed to increased investments in financial products, leading to a decrease in bank deposit interest income [2] Product Development - The company’s high-speed NOA (Navigation on Autopilot) has become a core growth driver, with the shipment of onboard processors reaching 1.98 million units in H1 2025, doubling year-on-year [3] - The company has secured nearly 400 new model designations, with over 100 models featuring high-speed highway assistance and more than 15 models successfully launched with mid-to-high-level assistance driving solutions [3] International Expansion - The company has made initial progress in overseas expansion, securing model designations from two Japanese automakers for markets outside China, expected to yield over 7.5 million units in lifetime shipments [4] - The company is collaborating with nine joint venture automakers in China, with 30 models adopting its solutions, some of which are set to begin mass production by the end of this year [4] Investment Outlook - The company is positioned as a leading domestic intelligent driving solution provider, with a comprehensive stack of technology capabilities covering L2 to L4 level intelligent driving chip solutions [4] - Revenue projections for 2025-2027 are estimated at 3.89 billion, 5.87 billion, and 8.35 billion yuan, with corresponding price-to-sales ratios of 30, 20, and 14 times [4]

Investment Rating - The report assigns a "Buy" rating for Horizon Robotics (9660.HK) [3] Core Insights - Horizon Robotics is positioned as a leader in the new generation of automotive intelligent chips and a world-class AI algorithm company, focusing on software-defined principles and exploring new boundaries in intelligent driving [5][14] - The intelligent driving market is expected to grow significantly, with the AD market projected to take over from ADAS as the main growth driver, achieving a market size of 407 billion yuan by 2030 [12][37] - The company has a leading market share in the intelligent driving computing solutions market, with a 28.65% share in the first half of 2024, and is expected to further increase its share in the OEM ADAS and AD markets [11][57] Summary by Sections Company Overview - Horizon Robotics focuses on intelligent driving chip platforms, full-scene intelligent driving solutions, and supporting toolchains, establishing itself as a comprehensive supplier in the industry [5][14] - The company has launched several intelligent driving chips, including J2, J3, J5, and J6, and has developed a self-adaptive BPU computing unit that maximizes computational efficiency [14] Market Growth - The AD+ADAS market in China has seen a compound annual growth rate (CAGR) of 57.8% from 2019 to 2023, with the AD market growing at a CAGR of 144.2% [12][37] - By 2030, the AD market is expected to reach a size of 407 billion yuan, with a CAGR of 48.8% from 2025 to 2030 [12][37] Competitive Position - Horizon Robotics has a steadily increasing market share, with 41% in the ADAS market and over 30% in the AD market among Chinese OEMs by the end of 2024 [12][57] - The company has established partnerships with major OEMs, including BYD, Geely, and Chery, to support their intelligent driving strategies [61][69] Financial Projections - Revenue projections for Horizon Robotics are expected to reach 36.10 billion yuan in 2025, 56.97 billion yuan in 2026, and 80.53 billion yuan in 2027, with corresponding growth rates of 51%, 58%, and 41% respectively [6] - The company anticipates a return to profitability by 2027, with a projected net profit of 668 million yuan [6] Customer Base and Partnerships - Horizon Robotics has a broad customer base, covering major domestic automakers and new energy vehicle manufacturers, which positions it well for future growth as the demand for intelligent driving solutions increases [69]