SIASUN(SZ:300024)2025-08-31 16:21Summary of Horizon Robotics Conference Call Company Overview - Company: Horizon Robotics - Industry: Automotive and AI Semiconductor Solutions - Market Position: Leading provider of intelligent driving SoC and solutions in China [doc id='13'][doc id='11'] Key Points and Arguments Revenue Growth Projections - Revenue Growth Rate: Expected to maintain approximately 50% revenue growth over the next five years [doc id='2'][doc id='28'] - Driving Factors: 1. Rapid increase in L2+/L3 autonomous driving penetration, expanding market reach within China [doc id='11'] 2. Accelerated domestic semiconductor replacement in the automotive and AI sectors [doc id='11'] 3. Growing demand for edge AI, contributing to AIoT and robotics SoC business growth [doc id='11'] Financial Performance Expectations - EBIT Margin: Anticipated to turn positive by 2027 and reach over 20% by 2029, aligning with industry peers [doc id='4'][doc id='60'] - 2024 Financials: Projected EBIT loss of 2.36 billion RMB due to high R&D expenses (31.6 billion RMB, 132% of revenue) [doc id='4'][doc id='62'] - Revenue Forecast: Expected to reach 20.77 billion RMB by 2029, with a compound annual growth rate (CAGR) of 65% from 2024 to 2027 [doc id='6'][doc id='3'] Market Valuation - Target Price: Set at HK$10.50, based on a discounted cash flow (DCF) valuation with a WACC of 9.5% [doc id='5'] - Current Valuation: The stock is currently trading at a price-to-sales (P/S) ratio of 16 times for 2026, slightly above competitors, but with a significantly higher revenue growth forecast [doc id='88'][doc id='95] Market Dynamics - Automotive Market Size: The ADAS/AD SoC market for major Chinese OEMs is projected to grow from US$783 million in 2024 to US$7.34 billion by 2029 [doc id='17'] - Domestic Semiconductor Market: Domestic suppliers are expected to capture a larger share of the automotive SoC market, with significant growth anticipated from 2025 onwards [doc id='17'] Non-Automotive Business Growth - Non-Automotive Revenue: Expected to grow at a CAGR of 125% from 2024 to 2028, reaching 1.5 billion RMB by 2028 [doc id='32'][doc id='33'] - Key Drivers: Increased demand for consumer AIoT products, drones, and humanoid robots [doc id='32'] R&D and Cost Structure - R&D Investment: High R&D costs are a significant factor in current losses, but expected to normalize as revenue scales [doc id='76'] - Cost Efficiency: Anticipated reduction in R&D expense ratio from 132% in 2024 to 29% by 2029, aligning with industry averages [doc id='76'] Competitive Advantages - Technological Edge: Horizon Robotics holds a competitive advantage in integrated hardware and software capabilities, positioning it favorably against domestic peers [doc id='21'] - Client Base: The company has established partnerships with major domestic and multinational automotive manufacturers [doc id='22'] Additional Important Insights - Market Sentiment: The stock has seen a 7% decline since February 2023, attributed to market concerns over the short-term trends in autonomous driving technology and regulatory challenges [doc id='87] - Long-term Outlook: Despite current challenges, the long-term outlook remains positive due to structural growth factors in the automotive and AI sectors [doc id='11'] This summary encapsulates the key insights from the conference call, highlighting the company's growth potential, financial expectations, and market dynamics within the automotive and AI semiconductor industry.