CICC Initiates Coverage on Hesai-W (02525) with "Outperform" Rating and HK$182.5 Target Price

Stock News11-25

CICC initiated coverage on Hesai-W (02525) with an "Outperform" rating and a target price of HK$182.50, based on a P/S valuation method, implying 6.0x 2026e P/S. The firm believes Hesai's comprehensive product portfolio, strong domestic and international customer base, and cost-reduction capabilities will sustain its profitability.

CICC forecasts the company's 2025-2026 EPS at RMB 2.33 and RMB 3.81, with revenues of RMB 3.1 billion and RMB 4.3 billion, respectively, achieving a 43% CAGR from 2024 to 2026. Key highlights include:

1. **Global Leader in LiDAR Solutions, First to Achieve Profitability**: Hesai has ranked first in global LiDAR revenue for four consecutive years (2021-2024) and achieved profitability in Q4 2024, becoming the first and only publicly listed LiDAR company to do so—a milestone for the industry.

2. **Three Competitive Moats**: Hesai's advantages lie in its chip technology, in-house automated production capacity, and extensive customer network. The company leads in chip-based LiDAR technology, now in its fourth-generation architecture, enabling cost reduction and compact designs. Its self-built production ensures delivery efficiency and economies of scale. It serves leading automakers globally and has deep partnerships with top Robotaxi firms while expanding into robotics.

3. **Industry Growth Accelerates**: With the adoption of urban NOA, L3 deployments, and declining LiDAR prices, CICC expects China's automotive LiDAR shipments to exceed 3 million and 10 million units in 2025 and 2028, respectively (58% CAGR). Robotics (e.g., lawn mowers, logistics robots) presents a new growth frontier, while overseas markets await expansion.

**Valuation**: Hesai's H-shares trade at 5.4x/4.0x 2025/2026e P/S, and its U.S. shares at 5.5x/4.0x. CICC values the H-shares and U.S. shares at 6.0x 2026e P/S, implying targets of HK$182.5 and $23.5, offering 53% and 52% upside, respectively (35x 2026e Non-GAAP P/E).

**Catalysts**: Overseas order execution and volume growth in robotics LiDAR could drive further upside.

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