CICC has released a research report maintaining its earnings forecasts for Hesai-W (02525) for 2026 and 2027. The current H-share price corresponds to a P/E ratio of 40.3x for 2026 and 24.9x for 2027. The current US share price corresponds to a P/E ratio of 40.0x for 2026 and 24.8x for 2027. The firm maintains an Outperform rating on both the H-shares and US shares, with a target price of HK$217.00 and US$27.14, respectively. This target implies P/E ratios of 55.2x/34.0x for the 2026/2027 H-shares and 53.6x/33.2x for the 2026/2027 US shares, representing potential upside of 36.9% and 34.0%, respectively.
CICC's key points are as follows:
**Q1 2026 Results Meet Market Expectations** The company reported its Q1 2026 results, achieving revenue of RMB 681 million, a year-on-year increase of 30%. Net profit attributable to shareholders was RMB 18 million, turning a profit year-on-year. The Q1 2026 results were in line with market expectations.
**Steady Revenue Growth and Solid Leading Position** In terms of shipments, Q1 2026 LiDAR unit shipments reached 472,000, a year-on-year increase of 141%. This included 350,000 ADAS LiDAR units, up 142% year-on-year, and 118,000 robotics LiDAR units, up 138% year-on-year, with the robotics business contributing a new growth curve. According to Gasgoo data, the company's market share in China's in-vehicle primary LiDAR market reached 55% in March 2026, solidifying its leading position. Looking ahead, the company is accelerating its globalization efforts and has entered the supply chain for Mercedes-Benz's L3 autonomous driving. CICC believes that as the company establishes a leading advantage in the global market, the gradual realization of overseas design wins is expected to bring new growth.
**Product Mix Adjustment and Increased Investment in New Products** The Q1 2026 gross margin was 39%, and expense control was effective. The company achieved a net profit attributable to shareholders of RMB 18 million, turning profitable year-on-year and marking the fourth consecutive quarter of GAAP profitability. Meanwhile, Non-GAAP net profit was RMB 48 million, a significant year-on-year increase of 455%. The company has increased investment in new products and businesses, with Q1 2026 R&D expenses rising 12% year-on-year to RMB 205 million. CICC believes that with the future mass production of new products, combined with technology-driven cost reductions and the release of scale effects, profitability is expected to remain robust.
**Dual Drive of Capacity Expansion and Product Upgrades Opens New Growth Space** The company plans to increase its annual LiDAR production capacity to 4 million units by 2026 to meet global demand. The company recently launched its 6D full-color ultra-sensitive SPAD-SoC chip, which integrates color and depth information at the chip level. It plans to first deploy this in the ETX series LiDAR, scheduled for mass production in the second half of 2026, thereby consolidating its technological moat. Based on its leading product technology, the company has established a new Strategic Growth Business division to develop physical AI infrastructure. CICC believes the company is gradually exploring software and data-driven business models, which will bring a new growth curve.
**Risk Warnings:** Raw material price increases exceeding expectations, weaker-than-expected downstream demand, and intensifying industry competition.
Comments