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.

Core Viewpoint - The company is positioned as a leading player in the domestic intelligent driving solution market, with significant revenue growth and a strong market presence, driven by product optimization and strategic partnerships [4][6][8]. Financial Performance - The company reported a revenue of 1.552 billion yuan in 2023, with a projected increase to 8.047 billion yuan by 2027, reflecting a compound annual growth rate (CAGR) of approximately 50% [2]. - The net profit attributable to the parent company is expected to improve from a loss of 6.739 billion yuan in 2023 to a profit of 403.52 million yuan by 2027 [2]. - The earnings per share (EPS) is projected to transition from a loss of 0.49 yuan in 2023 to a profit of 0.03 yuan in 2027 [2]. Revenue Growth - In the first half of 2025, the company achieved a revenue of 1.57 billion yuan, a year-on-year increase of 68%, significantly exceeding market expectations [4]. - The revenue from product solutions grew by 250%, while licensing and service revenue increased by 7% [4]. Product Development - The company saw a doubling of overall chip shipments to 1.98 million units in the first half of 2025, with mid-to-high-end chip shipments increasing sixfold to 980,000 units [5]. - The average price per chip rose by 106% to 393 yuan, attributed to an improved product mix favoring higher-end products [5]. - The J6B chip has secured international model designations from overseas automakers, with expected lifetime shipments exceeding 7.5 million units [5]. Market Position - The company has established partnerships with 27 OEMs (42 brands), with over 310 designated models, leading to a market share of 45.8% in the Chinese OEM ADAS/AD market [6]. - The company maintains a strong competitive position, with its market share in intelligent driving solutions continuing to rise [6]. Research and Development - R&D expenses reached 2.3 billion yuan in the first half of 2025, a 62% increase, aimed at enhancing core competitiveness and establishing technological barriers [7]. - Despite significant R&D investments, the adjusted net profit was a loss of 1.33 billion yuan, indicating a focus on long-term growth potential [7]. Investment Outlook - The company maintains revenue forecasts of 3.66 billion yuan for 2025, 5.37 billion yuan for 2026, and 8.05 billion yuan for 2027, with corresponding price-to-sales (P/S) ratios of 36.4, 24.8, and 16.6 respectively [8].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a revenue of 1.57 billion in the first half of 2025, representing a year-on-year growth of 68%, significantly exceeding market expectations [7] - The overall chip shipment reached 1.98 million units in the first half of 2025, doubling year-on-year, with mid-to-high-end chip shipments increasing sixfold [7] - The average price per chip in the first half of 2025 was 393 yuan, up 106% year-on-year, driven by an improved product mix [7] - The company has established partnerships with 27 OEMs (42 brands), with over 310 models confirmed, maintaining a leading market share in China [7] - R&D expenses reached 2.3 billion in the first half of 2025, a 62% increase year-on-year, aimed at enhancing core competitiveness [7] - The report forecasts revenues of 3.66 billion, 5.36 billion, and 8.05 billion for 2025, 2026, and 2027 respectively, with corresponding P/S ratios of 36.4, 24.8, and 16.6 [7] Financial Summary - The company reported a net profit of -13.3 billion in the first half of 2025, with an adjusted net profit of -13 billion [7] - The projected total revenue for 2023, 2024, 2025, 2026, and 2027 is 1.55 billion, 2.38 billion, 3.66 billion, 5.36 billion, and 8.05 billion respectively, with year-on-year growth rates of 71.32%, 53.62%, 53.52%, 46.60%, and 50.00% [1][8] - The projected net profit for the same years is -6.74 billion, 2.35 billion, -2.45 billion, -1.41 billion, and 0.40 billion, with corresponding year-on-year growth rates of 22.71%, 134.82%, -204.40%, 42.57%, and 128.68% [1][8]

Core Insights - Northbound capital recorded a net purchase of HKD 92.81 billion in the Hong Kong stock market on September 2, with a total annual net purchase exceeding HKD 1 trillion, marking the highest since the launch of the Stock Connect mechanism [1][2] Group 1: Stock Performance - Alibaba-W (09988) was the most bought stock, with a net purchase of HKD 53.68 billion, while it had a total transaction volume of HKD 86.47 billion [2][4] - Xiaomi Group-W (01810) faced a net sell of HKD 4.1 billion, with total transactions amounting to HKD 60.46 billion [2][7] - Semiconductor stocks, SMIC (00981) and Hua Hong Semiconductor (01347), experienced significant net sells of HKD 10.36 billion and HKD 10.14 billion respectively [6] Group 2: Analyst Insights - Morgan Stanley reported that Alibaba's delivery and instant retail business has reached a scalable level, expecting a reduction in losses for Ele.me in the coming quarters [4] - CICC highlighted that despite short-term liquidity issues affecting Hong Kong stocks, long-term structural advantages remain significant [5] - UBS expressed optimism about Horizon Robotics (09660) following a successful investor meeting, anticipating growth driven by design orders from multiple automotive manufacturers [5] Group 3: Market Trends - The net buying trend from Northbound capital indicates a strong interest in major tech stocks, particularly Alibaba and Tencent, which received net purchases of HKD 34.43 billion and HKD 4.92 billion respectively [4][5] - The semiconductor sector is facing pressure, with analysts suggesting that the market may have been overly optimistic about companies like ZTE Corporation (00763) due to disappointing earnings [6]

Core Viewpoint - Horizon Robotics-W (09660) reported a significant increase in revenue and profitability for the first half of 2025, indicating strong growth momentum in the autonomous driving technology sector [1] Financial Performance - The company achieved a revenue of 1.567 billion yuan for the first half of 2025, representing a year-on-year growth of 67.6% [1] - Gross profit reached 1.024 billion yuan, with a comprehensive gross margin of 65.4% [1] - Cash reserves stood at 16.1 billion yuan, reflecting a solid financial position [1] Market Insights - Goldman Sachs noted that the revenue growth of 68% exceeded expectations, primarily driven by increased shipments of the Journey6 model [1] - The firm expressed a positive outlook on the mass production of the Horizon Super Driving (HSD) system starting in the second half of the year [1] - The company shipped 980,000 units of its NOA function products, accounting for 50% of total shipments, which contributed to an increase in average selling prices [1] Growth Prospects - Bank of America Securities, after attending the investor meeting post-earnings report, expressed increased optimism regarding the company's growth prospects due to successful vehicle design integrations in domestic and international markets [1] - The bank anticipates that the company will secure design orders for high-end HSD solutions from at least 4-5 automotive manufacturers this year, which is expected to boost shipments of the J6P chip from an estimated 40,000 units in 2025 to 430,000 units in 2026 [1]

Group 1 - The core viewpoint of the report is that Bank of America Securities has raised the target price for Horizon Robotics-W (09660) from HKD 9.3 to HKD 11.1 and reiterated a "Buy" rating due to optimistic growth prospects following a recent investor meeting after the company's earnings report [1] - The company is expected to secure design orders for high-end HSD solutions from at least 4-5 automotive manufacturers this year, which will significantly increase the shipment volume of its J6P chips from an estimated 40,000 units in 2025 to 430,000 units in 2026 [1] - The management anticipates an increase in market share for Horizon's intelligent driving assistance solutions among domestic automotive OEMs in the fiscal year 2026, leading to a 3-5% upward revision in revenue forecasts for the fiscal years 2026-2027 [1]

Core Viewpoint - Bank of America Securities expresses increased optimism regarding Horizon Robotics' future growth prospects following the investor meeting after the company's earnings report, citing successful progress in vehicle design integration in both domestic and international markets [1] Group 1: Company Performance - The company is expected to secure design orders for high-end HSD solutions from at least 4-5 automotive manufacturers this year, which is anticipated to drive the shipment of its J6P chips from an estimated 40,000 units in 2025 to 430,000 units in 2026 [1] - The management anticipates an increase in market share for Horizon's intelligent driving assistance solutions among domestic OEMs in the fiscal year 2026 [1] Group 2: Financial Projections - Bank of America Securities raises its revenue forecast for Horizon Robotics for the fiscal years 2026-2027 by 3-5% to reflect better progress in new vehicle design orders, expecting large-scale shipments to commence from the fiscal year 2026 [1] - The target price for Horizon Robotics has been increased from HKD 9.3 to HKD 11.1, with a reiterated "Buy" rating [1]

Group 1: Market Overview - The article discusses the performance of various stocks in both Hong Kong and US markets, highlighting significant price changes in July, with notable declines in companies like Old Puhuang and Novo Nordisk [1][2][3]. - The macroeconomic environment is influenced by US trade policies, including fixed tariffs on imports from multiple countries, which may affect market sentiment [4][5]. Group 2: Investment Strategies - The article emphasizes three main investment themes: "anti-involution" policies focusing on industries with high state-owned enterprise representation, technology growth in AI applications, and the importance of semi-annual earnings reports for stock adjustments [5][6]. - Specific stocks are recommended based on their performance and market conditions, such as Old Puhuang, which is expected to benefit from seasonal sales and strong earnings forecasts [6][7]. Group 3: Company Highlights - Old Puhuang (6181.HK) has seen a significant drop in stock price post-lockup, but is projected to achieve a sales revenue of approximately 138-143 billion yuan for the first half of 2025, reflecting a year-on-year growth of 240%-252% [6][7]. - Sanhua Intelligent Control (2050.HK) reported a revenue of 76.69 billion yuan for Q1 2025, with a year-on-year growth of 19.1%, and is expected to maintain strong performance in the upcoming half-year [8][9]. - Horizon Robotics (9660.HK) is set to deliver new high-performance chips, which are anticipated to enhance vehicle value and revenue, amid a shift towards domestic chip solutions due to geopolitical factors [10][11]. Group 4: US Market Insights - Chubb Limited (CB.US) reported a net income of $2.97 billion for Q2 2025, marking a 33.1% increase, with a core operating income of $2.48 billion, reflecting strong underwriting profitability [15]. - Spotify (SPOT.US) faced challenges with Q2 earnings below expectations, but user growth remains robust, indicating potential for recovery despite current market concerns [17][18]. - Novo Nordisk (NVO.US) experienced a significant stock drop due to lower-than-expected sales forecasts, but remains a key player in the pharmaceutical sector with strong growth prospects [19][20].

Market Overview - Chinese markets surged following the announcement of the Yaxia Hydropower Station project, with construction materials, power equipment, and engineering sectors seeing significant gains[3] - US stock indices reached new highs, with the S&P 500 and Nasdaq increasing by 0.14% and 0.38% respectively, while the Dow Jones fell slightly by 0.04%[8] - European markets showed mixed results as investors remained cautious regarding trade negotiations, with the Stoxx 600 and UK FTSE 100 experiencing minor fluctuations[8] Economic Policy Impact - The recently signed "Big and Beautiful Act" by Trump is expected to reduce government spending while significantly cutting taxes, potentially widening the deficit[5] - The act primarily benefits middle to high-income groups, which may limit its positive economic impact but could directly benefit the US stock market through increased cash flow for these demographics[5] Commodity and Currency Movements - International oil prices saw a slight decline, with NY crude oil down 0.21% to $67.2 per barrel, while gold prices rose to a one-month high at $3,406.4 per ounce, increasing by 1.43%[25] - The US dollar index fell by 0.6%, reflecting a broader trend of declining US Treasury yields, while the Japanese yen experienced its largest single-day gain in two months following the recent elections[25] Fixed Income Market - US Treasury yields decreased, with the 2-year yield at 3.86% and the 10-year yield at 4.38%, indicating a flattening yield curve[26] - Asian bond markets remained relatively quiet due to a holiday in Japan, with Chinese investment-grade bond spreads holding steady[4] Stock Performance Highlights - TSMC raised its 2025 revenue growth forecast to 30%, driven by strong demand for advanced chips, particularly in the AI sector[7] - In the Hong Kong market, the Hang Seng Index rose by 0.68%, with significant gains in construction and materials stocks following the hydropower project announcement[10]

Investment Rating - The report maintains a "Buy" rating for the company [2][59]. Core Insights - The company is positioned as the market leader in the ADAS integrated machine market in China, with a projected hardware shipment exceeding 10 million units by 2025, driven by the "intelligent driving equality" trend [2][4]. - The J6E/M series has secured multiple model designations from major automotive brands, indicating strong short-term revenue growth potential [2][4]. - The HSD system, launched in April 2025, marks a significant advancement in high-level intelligent driving solutions, with initial deployment in Chery's models [2][4][29]. Summary by Sections 1. Core Business Progress - The company holds a 43.58% market share in the Chinese ADAS market for 2024, ranking first among domestic brands [11]. - The J6E/M series has been designated for over 310 models, with a delivery volume of 2.9 million units expected in 2024 and a cumulative total of 7.7 million units [11][12]. - The J6P and HSD system are set to begin mass production in Q3 2025, with significant performance improvements over previous generations [22][26]. 2. Capital Market Situation - Following the pre-IPO lock-up expiration, the stock price showed resilience, with only a slight decline on the day of the release [52][55]. - The company is expected to meet the conditions for inclusion in the Hong Kong Stock Connect, which will enhance liquidity [56][58]. 3. Revenue Growth Forecast - The company anticipates continued rapid revenue growth, with a clear growth logic in the short, medium, and long term [2][59]. - The introduction of the J6P is expected to drive an increase in average selling prices (ASP) for hardware due to its enhanced capabilities [22][26].