Hesai(US:HSAI)2025-09-23 02:37Summary of Hesai Group Conference Call Company Overview - Company: Hesai Group (HSAI/2525.HK) - Industry: LiDAR solutions for Advanced Driver Assistance Systems (ADAS) and autonomous vehicles Key Points Market Potential and Financial Projections - Overseas ADAS Contribution: By 2030E, overseas ADAS opportunities are expected to account for 25% of Hesai's profit, with overseas ADAS LiDAR volume projected to reach 3 million units, similar to China's volume in 2025E [1][12] - Revenue Forecast: Hesai's revenue is forecasted to reach RMB 14 billion and net profit RMB 3 billion by 2030E, with a net margin of 21% [1][22] - Target Price Increase: The 12-month ADR target price has been raised to US$36 (previously US$26.3), and the H-share target price is set at HK$281, implying 24% and 23% upside respectively [2][59] Long-term Valuation Methodology - Valuation Methodology: Transitioning to a long-term valuation approach of 20X P/E on 2030E EPS, discounted back to 2026E with an 11% cost of equity [2][47] - Net Profit Estimates: Net profit estimates for 2026E-2027E have been increased by 11%-17% due to higher expected LiDAR penetration and mass production evidence from overseas OEMs [2][46] LiDAR Market Dynamics - Mass Production Timeline: Expectation for overseas mass production of LiDAR-equipped vehicles to commence in 2026E/2027E, particularly among European OEMs [3][11] - Design Wins: Hesai has secured design wins from a top European OEM for a multi-year program, with mass production starting on premium models in 2026 and mid-end models in 2027 [11][15] Competitive Landscape - Cost Advantage: Hesai is positioned with a strong cost advantage due to mature mass-production capabilities, which is expected to enhance its competitiveness in the overseas market [15][22] - Market Share Goals: Hesai aims to capture 33% of the overseas market share by 2030E, with projected sales volume contributions of 5,000 to 1 million units from 2026E to 2030E [18][22] Risks and Challenges - Adoption Risks: Potential slower adoption of LiDAR technology in both domestic and overseas markets could hinder growth [53][54] - Intensified Competition: Increased competition from other LiDAR suppliers, particularly Huawei and Robosense, may impact Hesai's ability to secure future design wins [56] - Pricing Pressure: Ongoing price competition among OEMs could exert pressure on Hesai's pricing and margins [56] - Policy Risks: Hesai's designation as a "Chinese Military Company" by the US Department of Defense poses potential risks to its business operations and partnerships with global OEMs [56] Financial Performance - Revenue Growth: Projected revenue growth of 63% in 2025E and 52% in 2026E, with a significant increase in net income expected [57][60] - Gross Margin Expectations: Anticipated gross margin of approximately 40% for overseas ADAS, compared to 30% domestically [22][23] Conclusion - Investment Thesis: Hesai is positioned to benefit from the accelerating adoption of LiDAR in the NEV market and overseas ADAS opportunities, with a strong growth outlook supported by new design wins and product launches [60][62]