Huachuang Securities Initiates Coverage on Hesai-W (02525) with "Strong Buy" Rating, Target Price HK$235.93

Stock News09:59

Hesai-W (02525), a global leader in LiDAR technology, is poised to capture domestic and international market share amid advancing L2+/L3/L4 regulations, driving rapid expansion, according to Huachuang Securities. The firm also highlights the vast potential of the robotics LiDAR sector as a second growth driver for the company.

Projections for 2025-2027 include: 1) Revenue of RMB 3.03 billion, RMB 4.177 billion, and RMB 5.823 billion (+46%, +38%, +39% YoY); 2) Net profit of RMB 358 million, RMB 488 million, and RMB 887 million (turning profitable, +36%, +82% YoY); 3) Non-GAAP net profit of RMB 478 million, RMB 602 million, and RMB 995 million (+33.9x, +26%, +65% YoY); 4) EPS of RMB 2.29, RMB 3.13, and RMB 5.68.

Using a PS valuation method, Huachuang assigns an 8x 2026 PS multiple, implying a target market cap of RMB 33.4 billion (+35% upside) and a target price of HK$235.93. The "Strong Buy" rating reflects Hesai’s leading position and growth trajectory.

**Key Highlights**: - **Market Leadership**: Founded in 2014, Hesai went public on Nasdaq in 2023 and listed on HKEX in September 2025. Its eight product series (AT/ET/FT/Pandar/OT/XT/QT/JT) serve ADAS, autonomous driving, and robotics markets. Deliveries surged from 4,000 units in 2020 to 502,000 in 2024, with 2025 projections exceeding 1.5 million units. The company achieved full-year Non-GAAP profitability and positive operating/net cash flow in 2024. Q3 2025 net profit hit a record RMB 260 million, with annual guidance raised to RMB 350-450 million.

- **Industry Inflection Point**: With "smart driving democratization," China’s LiDAR installations may reach 2.5 million units (9% penetration) in 2025, priced at ~RMB 1,450. As L2+/L3/L4 regulations mature, penetration is expected to rise further. Prices have limited downside, while high-performance, multi-sensor solutions gain traction. Global automotive LiDAR市场规模 could hit $9 billion/$14.8 billion by 2030/2035.

- **Competitive Edge**: - **Technology**: Hesai is the only fully vertically integrated LiDAR firm, with self-developed chips cutting costs by 99.5%. Its latest platform achieves 100% in-house production for seven core components. - **Manufacturing**: Its smart factory integrates R&D and production, enabling a 10-second unit下线 time and 100% automation in key processes. - **Clients**: ADAS partnerships include Li Auto, Leapmotor, and Xiaomi, with two top-tier客户 committing to 100%标配 by 2026. Overseas, it secured exclusivity with a European OEM and supplies Toyota’s合资 brand. In robotics, 9 of the top 10 Robotaxi firms use Hesai’s主 LiDAR, with 2025 deliveries projected at 200,000 units.

**Risks**: Intensifying competition, slower LiDAR adoption, weaker client demand, and geopolitical uncertainties.

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