Hesai (Nasdaq: HSAI) introduces new AT1440 with the world's highest number of channels for an automotive lidar and the FTX solid-state lidar with the world's widest field of view AT1440's resolution is more than 30 times higher than mainstream automotive lidars FTX has the largest field of view in the world for an automotive-grade solid-state lidar at 180° x 140° FTX features a point rate 2.5 times higher than its previous generation LAS VEGAS, Jan. 7, 2025 /PRNewswire/ -- Hesai Technology (Nasdaq: HSAI), ...

Hesai (Nasdaq: HSAI) introduces new JT series mini 3D lidar, with compact and lightweight design, and world's widest hyper-hemispherical field of view Designed specifically for robotics applications Mass production and deliveries for JT series have begun  Witness a live demonstration of a JT series lidar in action at booth #6824 in LVCC West Hall LAS VEGAS, Jan. 7, 2025 /PRNewswire/ -- Hesai Technology (Nasdaq: HSAI), the global leader in lidar technology, today launched its JT Series of mini hemispherical ...

Core Insights - Hesai Technology has achieved over 100 design wins across 21 automotive OEMs, including significant partnerships with three of China's top five automakers, indicating strong market penetration in the automotive sector [1][3] - The company has established a diverse customer base in the robotics market across more than 40 countries, with plans to launch a new mini high-performance 3D lidar model and announce new partnerships at CES Las Vegas 2025 [2] - Hesai has delivered over 100,000 lidar units in December 2024, becoming the first lidar company to reach this milestone, and has also set a record with over 20,000 lidar units delivered for the robotics market in the same month [5] Automotive Sector - The design wins in the automotive sector include a wide range of vehicle brands and models, with many expected to launch in 2025 featuring Hesai's ATX, an ultra-compact high-performance lidar [3] - The three automakers involved are significant players, including one with millions of annual deliveries and another leading in both domestic and international sales [3] Robotics Sector - Hesai's robotics market presence includes applications in delivery robots, autonomous lawn mowers, cleaning robots, AGVs, and AMRs, showcasing the versatility of its lidar technology [2] - The upcoming launch of a mini high-performance 3D lidar model is expected to enhance Hesai's offerings in the robotics sector [2] Operational and Technical Advancements - Hesai has a global operational footprint in Europe, the US, and Asia, with over 1,700 patents, indicating a strong commitment to innovation and technical development [4] - The company plans to exceed an annual production capacity of 2 million lidar units in 2025, supported by its mass production capabilities and R&D efforts [5]

Investment Rating - The report initiates coverage on Hesai Group (HSAI US) with a "Buy" rating and a target price of $16.3 per ADS, based on a 4.8x 2025 expected price-to-sales ratio [2][3] Core Viewpoints - Hesai Group is a global leader in 3D LiDAR solutions, with a strong competitive advantage in the industry [5] - The company is expected to reach a profitability turning point in 2024, driven by increased shipments of existing LiDAR products, the launch of a cost-effective new AT series in 2025, and improved operational efficiency [2] - Hesai Group is projected to achieve Non-GAAP net profits of RMB 9 million in 2024 and RMB 141 million in 2025 [2] - The company has established mass production partnerships with 20 domestic and international automakers for 75 vehicle models as of 3Q24 [5] - Hesai Group holds a 37% market share in the global LiDAR market in 2023, ranking first, with leading positions in both passenger car/light commercial vehicle (26%) and autonomous taxi (74%) segments [12] Market and Industry Analysis - The global automotive LiDAR market is expected to reach $3.63 billion by 2029, with a CAGR of 38% from 2023 to 2029 [12] - The passenger car (PC) and light commercial vehicle (LCV)/autonomous taxi LiDAR markets are projected to reach $2.99 billion and $638 million, respectively, by 2029, with CAGRs of 39% and 31% from 2023 to 2029 [12] - Hesai Group is well-positioned to benefit from the strong growth in the LiDAR market, given its leading position in both global and Chinese LiDAR solution markets [12] Competitive Advantages - Hesai Group's competitive advantages include its leading technological capabilities, such as the self-developed ASIC chip, which enables continuous cost optimization [5] - The company's in-house manufacturing and highly automated production methods provide it with leading mass production capabilities [5] - Strong customer relationships drive continuous market penetration [5] Valuation and Target Price - The target valuation of RMB 15.9 billion (equivalent to $16.3 per ADS) is based on a 4.8x 2025 expected price-to-sales ratio, which is 10% higher than the industry average of 4.4x [3] - This valuation is supported by Hesai Group's industry-leading financial performance and a strong product delivery plan in 2025, driven by incremental contributions from leading automakers [3]

Core Insights - Hesai has been selected as the exclusive provider of long-range lidar for Changan Automobile's new intelligent driving platform, with an expected order volume of over 1.5 million units for the ATX model in the coming years [1][2]. Group 1: Partnership and Product Details - Hesai will supply lidar products for more than 10 vehicle models across various Changan brands, with the first model set for mass production in the second half of 2025 [2]. - The Changan Nevo E07, equipped with two Hesai AT128 lidars, was launched in October 2024 and has received positive market feedback [2]. - The ATX model is a compact ultra-high-resolution long-range lidar that utilizes proprietary technology to improve point cloud resolution while reducing volume, weight, and power consumption [3]. Group 2: Future Developments - The ATX model is expected to enhance road safety across multiple brands and vehicle models within Changan's intelligent driving platform [4]. - Hesai aims to collaborate closely with Changan to expand the reach of advanced intelligent driving functions globally [4].

Investment Rating - The report maintains an "Add" rating for the company [1][3]. Core Insights - The company achieved a quarter-on-quarter delivery growth of 50%, indicating a positive trend towards profitability for the full year [1]. - The total shipment of LiDAR units reached a record high of 134,208 units in Q3 2024, representing a significant year-on-year increase of 182.9% [3]. - The financial performance showed a quarterly revenue of 539.4 million RMB, a year-on-year growth of 21.1%, with a gross margin increase to 47.7% from 30.6% in the same period last year [3]. - The company provided optimistic guidance for Q4 2024, projecting revenue of 100 million USD and a net profit of 20 million USD on a GAAP basis [3]. Summary by Relevant Sections Delivery and Revenue - The company’s total LiDAR shipments for the first nine months of 2024 reached 279,835 units, a year-on-year increase of 108.2%, with ADAS product deliveries at 263,148 units, up 129.9% [3]. - The gross margin improved significantly to 47.7%, attributed to cost management and scale optimization [3]. Market Expansion and Customer Collaborations - The company deepened its domestic market collaborations, becoming a strategic supplier for SAIC Volkswagen and securing exclusive orders from emerging EV manufacturers [3]. - Internationally, the company successfully delivered prototypes for a global automotive manufacturer and signed two proof-of-concept projects with a top Japanese automaker [3]. Financial Projections - For Q4 2024, the company expects to deliver approximately 201,000 LiDAR units, with total shipments for the year projected at 480,000 units, leading to an anticipated revenue growth of 11% to 2.083 billion RMB [3]. - The forecast for 2025 indicates a potential 100.3% increase in LiDAR deliveries to 962,000 units, with revenue expected to grow by 33.5% to 2.781 billion RMB [3].

Investment Rating - Maintains an "Outperform" rating with a target price of $7.20 per share [1] Core Views - The company's Q3 revenue and gross profit margin exceeded market expectations, with Q4 expected to achieve GAAP profitability [1] - The company aims to ship over 1 million LiDAR units in 2025, driven by strong demand in the ADAS market [1][9] - The company's ADAS LiDAR maintains a leading market share in the front-load passenger vehicle market, with the more cost-effective ATX series set for mass production next year [1] Financial Performance - Q3 revenue reached RMB 539 million, a 27% YoY and 32% QoQ increase, significantly exceeding management guidance [1] - Gross profit margin reached 47.7%, surpassing market expectations due to cost optimization, economies of scale, and additional NRE service contributions [1] - GAAP net loss narrowed to RMB 70 million in Q3, with Q4 expected to achieve a GAAP net profit of $20 million [1] - Q3 LiDAR shipments reached 134,000 units, a 183% YoY increase, with ADAS LiDAR accounting for 97% of total shipments [1] Market Expansion - The company has secured design cooperation agreements with 5 global leading OEMs, including 4 joint venture automakers [1] - A new development and verification project was signed with a top 3 Japanese automaker in Q3, further demonstrating the company's product competitiveness [1] Valuation and Forecast - The target price of $7.20 is based on a 2.0x PS multiple for 2025, considering the company's historical average PS of 2.3x [1] - Revenue forecasts for 2024-2026 are RMB 2.071 billion, RMB 3.267 billion, and RMB 4.257 billion, respectively, with growth rates of 10%, 58%, and 30% [1][6] - Net profit is expected to turn positive in 2025, reaching RMB 69 million, and further increasing to RMB 302 million in 2026 [6]

Financial Data and Key Metrics - Q3 2024 net revenue reached RMB 539.4 million (USD 76.9 million), surpassing the high end of revenue guidance [6][30] - LiDAR shipments exceeded 134,000 units in Q3, marking a second consecutive quarter of nearly 50% sequential growth [6][30] - Blended gross margin remained robust at 47.7%, supported by effective cost management and NRE revenues from L4 LiDAR [31] - GAAP net loss narrowed for four consecutive quarters, reflecting operational efficiency and financial discipline [7][32] - Q4 2024 projected revenue is nearly USD 100 million with an estimated net profit of USD 20 million, achieving full-year profitability on a non-GAAP basis [7][33][34] Business Line Data and Key Metrics - LiDAR adoption accelerated, with over 134,000 units shipped in Q3, driven by strong demand in the ADAS sector [6][30] - The company secured new platform wins with Leapmotor and a premium EV brand, with production expected to commence in 2025 [14] - The ATX LiDAR is nearing SOP phase, with significant interest from multiple customers planning to adopt it as a standard feature in their 2025 line-ups [15] - The OT128 LiDAR, designed for scalable applications like robotaxis and industrial robotics, has secured contracts with over 90 global and domestic clients [23][24] Market Data and Key Metrics - LiDAR adoption in China is growing, with 2/3 of highway NOA models and 100% of city NOA models equipped with LiDAR [9] - Level 2 and Level 2+ ADAS adoption in China is projected to reach 40% penetration in 2024 and 50% by 2025 [9] - The company expanded its global reach, securing design wins with 5 prominent global OEMs, including joint ventures in China and collaborations with SAIC Volkswagen [16][17][19] - Two new development projects were secured with top 3 OEMs in Japan, covering Level 2+ passenger vehicles and Level 4 robotaxi applications [20] Company Strategy and Industry Competition - The company aims to capitalize on the growing recognition of LiDAR technology in autonomous driving, with a focus on both ADAS and autonomous mobility markets [22] - The OT128 LiDAR, with its 360-degree perception and all-weather capabilities, positions the company as a leader in scalable applications like robotaxis and industrial robotics [23][24] - The company is leveraging its strong position in the ADAS sector to explore opportunities in the broader autonomous mobility market, where performance is prioritized over price sensitivity [22] Management Commentary on Operating Environment and Future Outlook - Management highlighted the critical role of LiDAR in vehicle safety systems, especially in low visibility conditions, as demonstrated by recent NHTSA investigations [11][12] - The company is confident in its momentum, projecting full-year profitability on a non-GAAP basis for 2024, a first for an automotive LiDAR company [7][34] - The introduction of Level 3 autonomous driving solutions in 2026 is expected to drive further demand for LiDAR technology, with multiple LiDAR units likely to be employed for enhanced safety [10] Other Important Information - The company introduced its new CFO, Andrew Fan, who brings over 18 years of expertise in accounting and corporate finance [26] - The OT128 LiDAR played a key role in the success of the Champion Autonomous Race car at Formula Student Germany 2024, showcasing its advanced capabilities [25] Q&A Session Summary Question: Updates on the contention with the U.S. DoD and its impact on 2025 projects - The company was removed from the 1260H list in October but was relisted on a different basis, with ongoing legal challenges to correct the DoD's erroneous claims [38][39][40][41][42][43] Question: Expectations for GAAP profitability in 2025 - The company is on track for GAAP profitability in Q4 2024 and is targeting full-year profitability in 2025, driven by strong revenue growth and cost control [44][45][46][47][48][49] Question: 2025 volume, revenue, and margin guidance - The company expects significant design wins for new car models in 2025, with millions of units projected to be shipped, supported by three different AT modules [52][53] - Normalized LiDAR gross margin, excluding NRE impact, is expected to remain around 40% [54] Question: LiDAR production for robotics and ASP differences - Robotics LiDARs have higher ASPs compared to ADAS due to lower volumes and different technical requirements, with the company leveraging its ADAS capabilities to maintain high profitability in robotics [59][60][61][62][63][64] Question: ATX shipment proportion and long-term outlook - The company expects ATX shipments to grow rapidly in 2025, with a focus on maintaining healthy blended gross margins through effective cost management [65][66] Question: Cooperation with Huawei in the intelligent driving market - The company views Huawei as a strong competitor within its ecosystem but remains focused on maximizing market share outside of Huawei's supply chain [68][69][70][71] Question: OT128 adoption and partnership with Cruise - OT128 has secured deals with over 90 clients, with production and deliveries already underway, while the partnership with Cruise remains strong, with NRE revenues recorded in Q3 [73][74][75][76][77][78] Question: Normalized OpEx and Q1 2025 margin guidance - OpEx growth is expected to be less than 5% on a GAAP basis and 10-15% on a non-GAAP basis in 2024, with active expense management planned for 2025 [81][82] Question: ATX design wins and potential switching from AT128 - The ATX is a cost-effective alternative to the AT128, with many customers expected to switch to ATX for better cost structures, while premium models will adopt higher-performance LiDARs like the AT512 [84][85][86][87][88][89]

Core Insights - Hesai Group reported quarterly net revenues of RMB539.4 million (US$76.9 million) for Q3 2024, marking a 21.1% increase from RMB445.6 million in Q3 2023 [11] - The company achieved total lidar shipments of 134,208 units in Q3 2024, representing an increase of 182.9% from 47,440 units in the same period of 2023 [2] - The company anticipates a record-breaking fourth quarter with projected lidar shipments reaching 200,000 units and net revenues nearing US$100 million [5][20] Financial Performance - Gross margin for Q3 2024 was 47.7%, up from 30.6% in Q3 2023, driven by effective cost management [12] - Loss from operations decreased to RMB77.2 million (US$11.0 million) in Q3 2024, a 53.8% improvement from RMB167.2 million in Q3 2023 [16] - Non-GAAP net loss for Q3 2024 was RMB44.0 million (US$6.3 million), compared to RMB101.9 million in the same period of 2023, reflecting a 56.8% reduction [18] Operational Highlights - ADAS lidar shipments reached 129,913 units in Q3 2024, a 220.0% increase from 40,593 units in Q3 2023 [2] - The company secured new partnerships and design wins with major OEMs, including a Top 3 OEM in Japan and SAIC Volkswagen [3][7] - The launch of the OT128 lidar product has attracted contracts with over 90 global and domestic clients [6] Management Changes - Andrew Fan has been appointed as the Chief Financial Officer, effective November 25, 2024, bringing extensive experience in financial strategy [4][8] Business Outlook - The company expects to achieve full-year profitability on a non-GAAP basis for 2024, positioning itself as the first automotive lidar company to reach this milestone [5] - The anticipated growth is supported by strong demand in the ADAS market and ongoing global expansion efforts [3][20]

Core Viewpoint - Hesai Group, a leader in lidar solutions, will report its third quarter 2024 unaudited financial results on November 25, 2024, after U.S. market close [1] Financial Results Announcement - The earnings conference call is scheduled for 8:00 PM U.S. Eastern Time on November 25, 2024, which corresponds to 9:00 AM Beijing/Hong Kong Time on November 26, 2024 [2] - Participants can join the call by completing preregistration and dialing in 5 minutes before the call starts [2] Conference Call Details - A live and archived webcast of the conference call will be available on the Company's investor relations website [3] - A replay of the conference call will be accessible approximately one hour after the call until December 3, 2024, with specific dial-in numbers provided for different regions [4] Company Overview - Hesai is recognized as the global leader in three-dimensional lidar solutions, with applications in passenger and commercial vehicles, advanced driver assistance systems (ADAS), and autonomous vehicle fleets [5] - The Company also supports robotics applications, including last-mile delivery and logistics robots [5] - Hesai's technology is backed by strong R&D capabilities and integrates lidar designs with in-house manufacturing, ensuring high performance and quality [5] - The Company has established relationships with leading automotive OEMs and robotics companies across over 40 countries as of December 31, 2023 [5]