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 sector [1] Financial Performance - The company achieved a revenue of 1.567 billion yuan, 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 the increased shipment of the Journey 6 model [1] - The company’s NOA function product shipments reached 980,000 units, accounting for 50% of total shipments, which contributed to an increase in average selling prices [1] - Bank of America Securities expressed optimism about the company's growth prospects following a recent investor meeting, highlighting successful vehicle design integrations in domestic and international markets [1] Future Outlook - The company is expected to secure design orders for high-end HSD solutions from at least 4-5 automotive manufacturers this year [1] - Projections indicate an increase in J6P chip shipments from 40,000 units in 2025 to 430,000 units in 2026 [1]

Investment Rating - The report maintains a "Buy" rating for Horizon Robotics with a 12-month price target of HK$13.33, indicating an upside potential of 106.0% from the current price of HK$6.47 [11]. Core Insights - The management is optimistic about the growth of autonomous driving (AD) and advanced driver-assistance systems (ADAS) in China, particularly with local car OEMs pushing for urban Navigate on Autopilot features in the mainstream price segment of Rmb150,000 (approximately US$21,000) [2][3]. - Horizon Robotics is focusing on product mix upgrades from ADAS to AD, which is expected to drive an increase in average selling price (ASP) due to enhanced computing power [3]. - The company is committed to increasing its R&D investments, particularly in developing integrated software-hardware solutions, which will allow it to charge software fees based on car shipments rather than project-based fees [7]. Summary by Sections 1. Market Outlook - The total addressable market (TAM) for AD and ADAS is growing, with management highlighting the competitive landscape among local car OEMs as a key driver for increased demand [2]. - The Journey 6 product is identified as a significant driver for shipment increases in the AD solutions segment [2]. 2. Product Development - The transition from ADAS products (e.g., Journey 2 and 3) to more advanced AD products (e.g., Journey 6) is expected to enhance ASP due to the substantial increase in computing power from 4-5 TOPS to 560 TOPS [3]. - Future plans include the development of a higher computing power J7 platform, estimated at around 2000 TOPS, to meet the growing demand for advanced features [3]. 3. R&D Commitment - Horizon Robotics is allocating more resources to R&D, particularly in cloud computing, to develop stronger algorithms and enhance its software-hardware integration [7]. - The company aims to penetrate the majority of car OEMs in China that lack in-house algorithms for advanced ADAS/AD features [7]. 4. Strategic Partnerships - The joint venture with Volkswagen, Carizon, is expected to yield its first car model by the end of 2025, with management anticipating a significant share of Volkswagen's car models in the China market [8].