Cinda International released a research report stating that Hesai-W (02525) demonstrates superior profitability and cash flow compared to its peers, supporting its valuation premium, and thus maintains its "Buy" rating and HK$200 target price. According to consolidated institutional forecasts, the market expects compound annual growth rates for revenue and adjusted profit from fiscal year 2024 to 2027 to reach 41% and 321% respectively. The current share price corresponds to a projected price-to-sales ratio of 5.5 times for fiscal year 2026, which is higher than the 4.7 times for its peer, Robosense (02498). However, data from CIC Consulting shows that Hesai is the world's first lidar company to achieve full-year net profit (on a non-GAAP basis) and recorded positive operating cash flow in both fiscal years 2023 and 2024, making it the first publicly listed lidar company to generate positive operating cash flow.
Cinda International's main views are as follows: The company achieved its full-year profit target ahead of schedule in the third quarter of 2025 and subsequently raised its guidance. As a global leader in lidar, Hesai saw robust growth in shipments for its Advanced Driver-Assistance Systems (ADAS) and robotics lidar products in the third quarter, surging by 190% and 1,310% year-on-year respectively, accounting for 86% and 14% of total shipments by volume. Quarterly net revenue reached RMB 795 million, a 47.5% increase year-on-year. With expanding economies of scale, the ratios of selling, general & administrative expenses and R&D expenses all declined. The third-quarter net profit hit a record high of RMB 256 million, compared to a net loss of RMB 70.4 million in the same period last year. Cumulative net profit for the first three quarters reached RMB 283 million, surpassing the full-year profit target (RMB 200-350 million) ahead of schedule. The company subsequently raised its full-year net profit guidance to between RMB 350 million and RMB 450 million.
The rollout of Level 3 (L3) autonomous driving in mainland China is accelerating, with industry regulations becoming clearer. The first batch of conditional L3 autonomous driving vehicle model access permits were officially issued, allowing two models from Changan Automobile and BAIC's Arcfox to conduct pilot tests on designated highways and expressways in Beijing and Chongqing. Subsequently, Xiaomi Auto and Xpeng Motors announced that they had obtained L3 autonomous driving road test licenses in Beijing and Guangzhou. This regulatory progress indicates a shift in the regulatory environment; if L3 autonomous driving can transition from technical verification to mass production and application, successful commercialization examples are expected to boost valuations across the autonomous driving industry chain.
Hesai firmly holds the top position in the automotive main lidar sector, with new products entering large-scale delivery. As autonomous driving development progresses towards higher levels, it is anticipated that each vehicle will be equipped with more lidar units. Market estimates suggest L3 vehicles will require 3-6 lidars, up from the 1-2 typically used in L2 vehicles. Hesai has secured design-wins for mass production in over 120 vehicle models. According to data from Gasgoo Automotive Research Institute, the company has ranked first in the automotive main lidar sector for seven consecutive months, achieving a market share of 46% in August, positioning it to benefit from increasing penetration rates. Current major customers include Li Auto-W (02015), Xiaomi Group-W (01810), and Leapmotor (09863). The core ET series, known for its low cost and high performance, along with new products targeting L3 autonomous driving, are scheduled for large-scale delivery from 2025 to 2027.
Furthermore, the company maintains a leading advantage in the lidar market for autonomous taxis (Robotaxis), with nine of the world's top ten Robotaxi companies selecting Hesai as their primary lidar supplier. The robotics business is experiencing explosive growth, driven by strong overseas demand. Lidar products are already widely used in various mobile robotics scenarios such as logistics delivery, lawn mowing robots, and industrial automation. Hesai's JT series lidar continues to sell well in overseas markets, with cumulative shipments exceeding 100,000 units by the end of May. The company expects full-year robotics lidar shipments to surpass 200,000 units.
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