SIASUN(SZ:300024)2026-01-10 06:38Summary of Horizon Robotics Conference Call Company Overview - Company: Horizon Robotics (9660.HK) - Industry: Smart driving technology and AI capabilities Key Points 1. Product Development - Management is committed to R&D, developing a BPU (brain processing units) platform for the next chipset, Journey 7, which is expected to enhance AI capabilities - Journey 7 is currently under design, aiming for completion in 1H27, with computing power projected to reach 1,500 to 2,000 TOPS, facilitating the migration of smart driving levels for car OEMs - The company is also working on chipsets that integrate smart cockpits and smart driving, positioning itself as a competitor to Qualcomm, with a launch planned for 2Q26 [2][3] 2. 2026 Outlook - Management is optimistic about growth in 2026, driven by the increasing smart driving trend in China, local car OEMs opting for more local suppliers, and product mix upgrades from ADAS to AD - Revenue growth is expected to outpace shipment growth due to product mix upgrades, with Geely identified as a key customer for growth in 2026E, alongside BYD, Chery, Changan, and FAW - China is anticipated to remain the primary market, with non-China markets expected to contribute by 2028E - Gross margin (GM) is believed to depend on product mix, with software yielding higher GM compared to domain controllers [3][4] 3. Competitive Landscape - Management is confident in their strong R&D capabilities and competitive price-to-performance ratio, which supports car OEMs in achieving smart driving - Transitioning from in-house solutions to third-party solutions may take time for car OEMs due to the longer product life cycle of automobiles compared to smartphones - Car OEMs have better balance sheets than smartphone manufacturers, allowing for sustained R&D investments - NVIDIA is viewed as a market leader, driving the adoption of smart driving across more car models, with Horizon Robotics aiming to be a significant player in this space [4][10] 4. Financial Projections - A 12-month target price of HK$15.30 is derived based on an EV/EBITDA multiple of 28.0x, using estimates of the company's 2029E EBITDA - The target price reflects a potential upside of 57.9% from the current price of HK$9.69 [9][11] 5. Risks - Key downside risks include: - Increased competition or pricing pressure in the auto supply chain amid slow demand - Slower-than-expected product mix upgrades towards AD - Delays in expanding the customer base - Supply chain risks due to geopolitical tensions [10][11] Additional Insights - The company is focused on continuous product mix upgrades to enhance dollar content per vehicle - Management's positive outlook is supported by ongoing trends in smart driving and localization within the automotive industry [1][3]