Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Automotive technology, specifically focusing on autonomous driving solutions Key Points and Arguments Product Development and Adoption - The Journey 6 platform is seeing increased adoption in new vehicle models, including: - J6P/HSD (560 TOPS) on Chery EXCEED ET5 - J6E (80 TOPS) on SAIC MG4 530 - J6M (128 TOPS) on ChangAn QiYuan Q07 and Geely Galaxy A7 - The J6P and HSD systems have commenced mass production for the EXCEED ET5, with deliveries starting in November 2025, and plans to expand to more models by 2026E [1][2] Financial Performance and Earnings Revision - Revised 2026 earnings forecast to a net loss of Rmb3.3 billion, up from a previous estimate of Rmb3.1 billion - 2027-2028 earnings largely unchanged, while 2029 and 2030 earnings revised up by 2% and 1% respectively - Revenue projections for 2027-2030 revised down by 9%-14% due to a shift towards bundled solutions with higher price-to-performance ratios [3][7] Revenue Growth Expectations - Anticipated revenue growth of 99% YoY in 2026 and 71% YoY in 2027 - Gross margin (GM) expected to improve by 3 to 8 percentage points from 2026 to 2030 due to a shift in product mix towards integrated hardware/software solutions [3][7] Valuation and Price Target - Target price raised to HK$15.30 from HK$14.11 based on earnings revisions, maintaining a target multiple of 28.0x derived from 2029E EV/EBITDA - The valuation reflects a correlation between EBITDA growth and trading EV/EBITDA multiples of peers, with a projected 19% YoY EBITDA growth in 2030 [7][8] Risks and Challenges - Key downside risks include: - Increased competition and pricing pressure in the auto supply chain amid slow demand - Slower-than-expected product mix upgrades towards autonomous driving (AD) - Delays in expanding the customer base - Supply chain risks due to geopolitical tensions [13] Market Position and Future Outlook - Horizon Robotics is positioned as a local leader in the ADAS and AD market, with expectations of market share growth as autonomous driving technology expands [8] Conclusion - The company maintains a "Buy" rating with a significant upside potential of 72.3% based on the revised target price [16]