Horizon Robotics Conference Call Summary Company Overview - **Company**: Horizon Robotics - **Ticker**: 9660.HK - **Industry**: Autonomous Driving Chips and Solutions Key Takeaways Shipment Projections - **2026 Estimated Shipment**: Expected to be around **5.5 million units**, representing over **30% year-over-year growth** [1][2] - **Breakdown of Shipments**: - Low-end ADAS chips: **<2 million units** - Mid-end ADAS chips: **3 million+ units** (with **BYD** and **Geely** each contributing **1 million units**) [1][2] - High-end HSD solutions: **300-400k units** [1][2] Product Launches - **HSD (High-end Solution)**: - Launching **single J6M** solution in **2026**, targeting car models priced at **Rmb100k** [1] - Expected shipment of **300-400k units** for HSD, with over half from the **J6P solution** [1][9] Financial Performance - **2025 Estimated Shipment Guidance**: Maintained at **4 million units** [3] - **Earnings Summary**: - 2023A: Net Profit: **-Rmb1,635 million**, Diluted EPS: **-0.606** - 2024A: Net Profit: **-Rmb1,681 million**, Diluted EPS: **-0.367** - 2025E: Net Profit: **-Rmb3,002 million**, Diluted EPS: **-0.227** - 2026E: Net Profit: **-Rmb482 million**, Diluted EPS: **-0.037** - 2027E: Net Profit: **Rmb2,231 million**, Diluted EPS: **0.169** [5] Pricing and Cost Structure - **HSD ASP Breakdown**: - HSD (J6P): Total ASP of **US$700** (chip: **US$500**, software: **US$200**) - HSD (dual J6M): Total ASP of **US$400** (chips: **US$200**, software: **US$200**) [5] - HSD (single J6M): Pricing under negotiation [5] Market Position and Strategy - **Investment Rating**: Rated as **Buy / High Risk** due to leading position in domestic ADAS chip supply and strong partnerships [19] - **Market Cap**: Approximately **HK$132,013 million** (US$16,960 million) [6] Risks and Challenges - **High Risk Factors**: - Limited operating history - Uncertain R&D outcomes - Competition and regulatory risks - Supply chain dependency - Customer concentration risks - Geopolitical and compliance risks - Market adoption uncertainty [21] Future Outlook - **R&D Outlook**: Expected YoY growth rate of R&D expenses to be lower than revenue growth in **2026E** [14] - **Robotaxi Development**: Requires at least **5 million units** of HSD ownership for data training, expected to take around **3 years** to achieve [12] Collaboration and Expansion - **Partnerships**: Collaboration with **KargoBot** for ADAS software, with limited expectations for truck business volume due to low sales in China [15] - **Robotics Business**: Leveraging automotive chip expertise to enter the robotics chip market, with cautious optimism for large-scale commercialization in the next **5 years** [16] Conclusion Horizon Robotics is positioned for significant growth in the autonomous driving sector, with ambitious shipment targets and product launches planned for 2026. However, the company faces substantial risks that could impact its performance and market adoption.

Investment Rating - The investment rating for Horizon Robotics is "Buy" with a high risk designation [7]. Core Insights - Horizon Robotics expects significant growth in shipments for 2026, projecting high-end shipments between 300,000 to 500,000 units, mid-end shipments around 3 million units, and low-end shipments approximately 2 million units. Key contributors to high-end shipments are anticipated to be Chery and Chang'an, accounting for 50% of the total [1][2]. - The company maintains its guidance to ship 4 million units of automotive-grade processing hardware in 2025, with mid-to-high end products making up 50% of this total [2]. - Horizon Robotics has secured design wins for its high-end ADAS solution from Chery and Chang'an, with mass production of the first models expected in the second half of 2025 [3]. - The average selling price (ASP) for various products is detailed as follows: HSD (J6P) at US$700, HSD (dual J6M) at US$400, mid-end ADAS at US$90-100, and low-end ADAS at US$20-30 [4]. - The gross margin for the J6P chip is around 50%, while the software component has a gross margin close to 100% [5]. - Horizon Robotics has established collaborations with overseas tier-1 suppliers such as Bosch, Continental, and Denso to enhance its competitiveness in international markets [5]. - The company aims to increase its market share with BYD's God's Eye C solution in 2026 and plans to explore additional solutions [9]. - Horizon Robotics believes its HSD offers a competitive edge over Huawei's ADAS solution due to its high value for money, making it suitable for mass-market models [10]. - The deployment of HSD is expected to facilitate the development of Robotaxi systems, with a partnership announced with Hello Inc. in September 2025 [11]. - The valuation of Horizon Robotics is based on projected strong growth in the ADAS market from 2025 to 2030, with a target price set at HK$12.30, reflecting a potential return of 49.1% [12].

Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics - **Ticker**: 9660.HK - **Rating**: Outperform - **Price Target**: HKD 15.00 - **Current Price**: HKD 8.44 - **Market Cap**: HKD 123.662 billion Key Industry Insights - **Industry**: Automotive and Smart Driving Technology - **Product Launches**: - Chery Exeed ET5, equipped with Horizon's Urban NOA solution, opened for pre-orders on November 13, 2025, marking a significant milestone for Horizon's high-end smart driving solutions [1][10] - Deepal L06 model, also featuring the Urban NOA solution, is set to launch next week [3][11] Sales Performance and Projections - **Chery Exeed Sales**: - The brand has 9 models with an average monthly sales volume of 5.3k units year-to-date (YTD) [2] - The Exeed ET5 is expected to be a strong performer, with a price range of RMB 160k–175k, and is positioned competitively against similar models [10][13] - **Deepal Sales**: - The Deepal brand has 6 models with a combined average monthly sales volume of 18.4k units YTD, with the two sedan models averaging 2k units monthly [3] - The Deepal L06 will be priced between RMB 140k–162k, enhancing the competitive landscape for Horizon's offerings [3][22] Competitive Landscape - **Market Positioning**: - Horizon's HSD solution is viewed as competitive against Nvidia's chips and other third-party algorithms, with potential for new OEM design wins in 2026 [4] - The pricing strategy of Horizon's L2++ solutions is highlighted as more cost-effective compared to competitors like Huawei, which charges a higher premium for similar features [10][12] Financial Metrics - **Earnings Projections**: - Reported EPS for F24A is RMB 0.51, with projections of (0.53) for F25E and (0.22) for F26E [8] - EV/Sales ratio is projected to decrease from 40.9x in F24A to 15.4x in F26E, indicating improving valuation metrics [8] Investment Implications - **Recommendation**: Horizon Robotics is rated as Outperform, with a price target of HKD 15, suggesting a potential upside of 78% from the current price [5][28] - **Catalysts to Watch**: - Sales performance of the Chery Exeed ET5 and Deepal L06 will be critical indicators for Horizon's market traction and future design wins [11][12] Risks - **Downside Risks**: - Slower-than-expected smart driving penetration and increased in-house development by OEMs could impact revenue growth [36] Conclusion - Horizon Robotics is positioned to capitalize on the growing demand for smart driving solutions, with competitive pricing and strong product launches expected to drive sales and market share in the coming years. The company's strategic partnerships and product offerings are critical to its growth trajectory and investment appeal.