Abstract
Hesai Group will report first-quarter 2026 financial results on May 19, 2026 Pre-Market; this preview distills company guidance, recent quarterly performance, and analyst expectations across revenue, margins, profitability, and adjusted EPS.Market Forecast
Consensus tracking aligns with Hesai Group’s guidance for first-quarter 2026 revenue of 650.00 million to 700.00 million RMB, with a point forecast of 668.34 million RMB, implying 25.59% year-over-year growth. Forecasted adjusted EPS is 0.184 RMB per share, up 241.29% year over year; the company has not provided quantified guidance for gross profit margin or net profit margin for the quarter.The core operating engine remains the Products business, where shipment momentum from awarded programs is expected to sustain revenue within the guided range while a disciplined cost-down roadmap supports margin resilience. The most promising contribution continues to come from the Products segment, which delivered approximately 985.73 million RMB in the fourth quarter of 2025, with total company revenue up 39.00% year over year, setting a foundation for the first-quarter 2026 guidance range.
Last Quarter Review
Hesai Group reported fourth-quarter 2025 revenue of 1.00 billion RMB, a gross profit margin of 41.03%, GAAP net profit attributable to shareholders of 153.00 million RMB, a net profit margin of 15.31%, and adjusted EPS of 1.11 RMB, down 11.91% year over year.A key highlight was operating performance: EBIT reached 129.70 million RMB, up 21.73% year over year and above the tracked estimate by 8.17 million RMB, reflecting favorable operating leverage despite intensified execution on cost reductions and program ramps.
Main business performance remained concentrated in Products, which accounted for an estimated 985.73 million RMB in the quarter with Services contributing approximately 14.76 million RMB; total revenue increased 39.00% year over year on program ramps and a stable delivery cadence.
Current Quarter Outlook
Main business: Products-driven revenue within guided range
Hesai Group guided first-quarter 2026 revenue to 650.00 million–700.00 million RMB, and the latest forecast centers near 668.34 million RMB, up 25.59% year over year. Execution in the Products business is the linchpin for meeting guidance, as production, test yields, and on-time delivery against awarded programs set the cadence for quarterly revenue. The mix of shipments across programs and configurations can influence the quarter’s gross margin, especially when balancing cost-down milestones against pricing and volume commitments.Cost discipline will be a recurring theme this quarter. The company’s demonstrated ability to scale manufacturing and engineer cost reductions—while preserving performance—has been reflected in stable fourth-quarter 2025 gross margins at 41.03%. As first-quarter 2026 unfolds, incremental improvements from procurement, process optimization, and design-for-manufacturing can provide a cushion for margins in the face of a modestly lower revenue base compared with the prior quarter’s 1.00 billion RMB. The order pipeline visibility—anchored by awarded programs—also supports shipment predictability, which in turn helps sustain operating efficiency in the near term.
Management’s earlier commentary and recent operating cadence suggest a continued focus on timely deliveries and consolidated supply chain execution. With factory throughput, material availability, and quality metrics aligned to program schedules, the quarter can track toward the midpoint of guidance. Any upside would likely be associated with accelerated OEM call-offs or earlier-than-expected implementations of cost steps that flow through cost of goods sold, whereas downside sensitivities would most likely relate to customer timing shifts or temporary supply-chain imbalances.
Most promising business: Software-enabled services and emerging data monetization
While Services remains a smaller revenue contributor—estimated at 14.76 million RMB in the fourth quarter of 2025—its strategic value is rising as customers seek enhanced analytics, lifecycle support, and software-enabled features. This quarter, demand for integration services, data tools, and field support can expand as delivered hardware fleets grow and as customers standardize validation, calibration, and maintenance routines across their platforms. In turn, a higher attach rate of services to deployed hardware can gradually nudge blended gross margin upward because these offerings typically carry structurally higher margins than hardware alone.Beyond near-term maintenance and integration work, an important theme for the Services line is the broader set of data solutions that can be built around deployed perception systems. This includes toolchains for testing, simulation alignment, and curated data services that customers use to optimize their systems. The commentary from market participants on expanding “physical AI” applications provides a directional tailwind for the Services category, given that richer software and data frameworks are a prerequisite to scaling such applications. While this quarter’s revenue impact will be modest, progress on these offerings increases customer stickiness and supports multi-year monetization beyond the bill of materials.
For first-quarter 2026, a reasonable base case is that Services continues to track proportionally with the installed hardware base, with a potential incremental lift from new software features or integration scopes executed for ongoing program ramps. Over time, the conversion of pilot deployments into standardized service contracts is a lever to reduce quarterly revenue volatility, and any early signs of that shift would be constructive for margin quality.
Key stock price drivers this quarter
The primary stock driver is delivery versus guidance: investors will watch whether revenue lands at or above the midpoint of 650.00 million–700.00 million RMB and whether adjusted EPS aligns with the 0.184 RMB per share forecast. Margin quality is the second driver; even absent explicit quarterly margin guidance, the relationship between product mix, cost-down cadence, and factory utilization typically explains most of the quarter-on-quarter movement in gross margin. Management’s commentary on cost trajectories and bill-of-materials reductions will therefore influence how investors extrapolate margin trends into the second half.Order conversion and new program updates represent another key catalyst. Any disclosure on expanded awards, multi-year framework agreements, or accelerated call-offs can extend revenue visibility and potentially support valuation multiples. Conversely, evidence of delivery timing shifts by customers could introduce near-term volatility in results versus consensus. Finally, the market’s interpretation of capital allocation, inventory discipline, and working capital swings—especially given the step-down from the fourth quarter’s 1.00 billion RMB revenue to the guided first-quarter range—will affect how investors read the durability of profitability and cash generation through 2026.
Analyst Opinions
Across published views from January 1, 2026 to May 12, 2026, opinions are overwhelmingly bullish: Buy or equivalent positive ratings account for 100% of the explicit recommendations, with no Sell or Underperform calls identified in this period. Multiple well-known institutions reiterated constructive stances alongside detailed targets. UBS reaffirmed a Buy rating with a target of HK dollars 280.80, highlighting supportive demand and execution progress. Daiwa maintained Buy with a target of HK dollars 265.20, pointing to resilient program ramps and monetization pathways that can sustain growth. China Renaissance reiterated Buy with a target around HK dollars 249.00 and initiated coverage earlier in the period with a similar positive bias, indicating confidence in revenue visibility and operating leverage.DBS also kept a Buy rating on the sponsored ADR, emphasizing that the company’s first-quarter guidance framework and ongoing delivery cadence provide a clear operational roadmap. CMB International maintained Buy on the ADR with a target price of 29.30 US dollars and underscored two themes: strong shipment volume growth and expanding “physical AI” use cases that can broaden monetization beyond core hardware. Bank of China similarly reiterated a Buy stance with a HK dollars 235.00 target, reinforcing the view that the company’s cost execution and program wins can underwrite healthier profitability over the coming quarters.
The central reasoning behind the bullish majority can be distilled into three pillars. First, the revenue outlook for first-quarter 2026—650.00 million to 700.00 million RMB—anchors expectations in a definable range, and the point forecast of 668.34 million RMB implies 25.59% year-over-year growth, which appears attainable given recent shipment trends and historical conversion of awards. Second, margin durability, while not explicitly guided, is supported by operational evidence: the fourth quarter’s 41.03% gross margin and 15.31% net profit margin, combined with a 21.73% year-over-year increase in EBIT, indicate consistent operating leverage. Buy-rated analysts generally expect that cost-down progress can mitigate mix fluctuations and seasonal throughput effects, preserving a balanced gross margin profile as volumes reset from the fourth quarter’s high base.
Third, the profitability trajectory is improving on a per-share basis. Even though adjusted EPS in the fourth quarter of 2025 declined 11.91% year over year to 1.11 RMB due to base effects and program timing, the first-quarter 2026 adjusted EPS forecast of 0.184 RMB per share represents a 241.29% year-over-year increase off a lower base, reflecting a swing to more consistent profitability. Analysts pointing to new monetization vectors around software-enabled services and data offerings also see scope for mixed-margin accretion as these attach to the deployed hardware base, an angle that complements the hardware-driven revenue inflection.
In synthesizing these views, the majority opinion expects Hesai Group to deliver a quarter broadly in line with guidance, with upside potential if program pull-ins or faster cost-down steps materialize. The most closely watched proof points for investors are: revenue delivery versus the 650.00 million–700.00 million RMB range; any color on gross margin progression given product mix; and commentary on service and software monetization that could broaden margin profiles across 2026. In the absence of evident bearish calls during this period, the constructive stance remains centered on shipment reliability, disciplined cost execution, and incremental earnings contributions from services layered on an expanding installed base.
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