LI AUTO(LI)2025-03-27 07:29Summary of Horizon Robotics Conference Call Company Overview - Company: Horizon Robotics (9660.HK) - Industry: Automotive technology, specifically focusing on smart driving and advanced driver-assistance systems (ADAS) Key Financial Highlights - 2H24 Revenue: Rmb1.4 billion, representing a 23% YoY and 55% QoQ increase, exceeding Bloomberg consensus by 10% [4][8] - Gross Margin (GM): Achieved 76.1%, higher than the expected 72.5% and consensus estimate of 69.5% [4][8] - Operating Income: Reported at Rmb-1.24 billion, in line with expectations [4][8] - Net Income: Turned positive at Rmb7.4 billion, significantly beating expectations of a loss [7][8] - Product Solutions Delivery: Expected to reach 2.9 million in 2024 with 100+ car model design wins [2][9] Product and Market Developments - Partnership with Li Auto: Li Auto plans to adopt Horizon Robotics' J6M chips for its L/MEGA series vehicles, upgrading from J5 solutions, indicating strong supplier credibility [1][9] - Chip Adoption: Increasing adoption of Horizon's chips among local OEMs, with a focus on higher-end products like J6M (128 TOPS) and J6P (560 TOPS) [1][9] - Market Expansion: Horizon Robotics is expanding its presence among Chinese OEMs, including BYD, Changan, Geely, Chery, and GAC, promoting intelligent driving features [9] Future Outlook - Revenue Growth Projections: Expected 50% YoY growth in 2025, with continued strong growth rates of 60%+ YoY in 2026-2028 [11] - Earnings Revisions: Adjustments made to 2025E-2030E earnings, with a 2%-5% increase in revenue estimates for 2026-2030 [10][11] - Target Price: Raised to HK11.77, based on a revised EV/EBITDA multiple of 30.0x for 2028E [19] Risks and Challenges - Competitive Landscape: Potential risks include increased competition and pricing pressures in the auto supply chain amid slow demand [18] - Product Mix Upgrade: Risks associated with slower-than-expected upgrades to AD products and expansion of the customer base [18] - Supply Chain Risks: Geopolitical tensions may pose supply chain challenges [18] Conclusion Horizon Robotics is positioned for significant growth driven by partnerships with major OEMs, strong product demand, and a favorable market environment for smart driving technologies. The company’s financial performance in 2H24 indicates robust growth, and the outlook remains positive despite potential risks in the competitive landscape.