Horizon Robotics (9660.HK)_ Journey 6 to diversify customer base; J6E_ J6M mass production in 2025E; Buy

Industry and Company * Industry: Semiconductor and automotive industry, specifically focusing on autonomous driving (AD) and advanced driver-assistance systems (ADAS) chips. * Company: Horizon Robotics (9660.HK), a Chinese company specializing in intelligent driving solutions. Core Views and Arguments * Positive Outlook: Goldman Sachs maintains a "Buy" rating on Horizon Robotics, expecting the company to benefit from the growing demand for ADAS and AD SoC chips in the automotive industry. * Journey 6 Series: Horizon Robotics's Journey 6 series, with computing power ranging from 10 TOPS to 560 TOPS, is expected to drive significant revenue growth starting from 2025E. * New Design Wins: The company has secured new design wins from Chery, Dongfeng Voyah, and BYD, further diversifying its customer base and validating its technology. * Customer Diversification: Horizon Robotics is working to reduce its reliance on its top clients by expanding its customer base and targeting more clients with its Journey 6 series. * Valuation: Goldman Sachs sets a 12-month target price of HK$6.1 for Horizon Robotics, based on a EV/EBITDA multiple of 18.3x, which is in line with the global sector average. Other Important Points * Competition: The report highlights the potential risks of fiercer-than-expected competition and auto supply chain pricing pressure amid slow demand. * Product Mix Upgrade: There is a risk that the upgrade of the product mix towards AD may be slower than expected. * Customer Base Expansion: The expansion of the customer base may be slower than expected. * Supply Chain Risks: There are risks related to the supply chain amid geopolitical tension. * M&A Rank: Horizon Robotics has a M&A rank of 2, indicating a medium probability of the company becoming an acquisition target.