Company highlights

(1) RoboSense Technology (Suteng Juchuang) is mainly engaged in the development and production of lidar and sensing solutions. Lidar can give cars and robots the ability to sense by integrating vision or other sensors. The company is the first lidar company in the world to mass-produce automotive-grade lidar products equipped with self-developed chips. In November 2022, the company released E-platform products equipped with self-developed integrated transmission, reception and processing system chips:

(2) According to the Insight Consulting Report, as of December 2022, the company is the only lidar company in the world that has achieved large-scale deployment of chip-level intelligent scanning technology. In terms of 2022 revenue, the company ranked second in the global and Chinese lidar solutions market (excluding low-end lidars with less than 16 lines), with market shares of 7% and 20%, respectively. Measured by sales volume. The company ranked third in the global and Chinese lidar solution markets (excluding low-profile lidars with less than 16 lines), with market shares of 12% and 21% respectively.

(3) As of June 2023, the company and 21 automakers and Tier 1 suppliers have increased their Lidar mass production orders to 58 models, and has achieved SOP for 13 models (mass production has begun, at which point the products are ready for mass production and delivery) for 9 of the 21 automakers and Tier 1 suppliers mentioned above. The company's lidar products have been selected by the world's best-selling automakers (based on 2020-2022 sales volume) and nine of China's top ten automakers (based on 2022 sales), including leading automakers such as Geely, Zero Sports, Xiaopeng, and GAC Aian.

Industry prospects

According to the Insights Advisory Report, the global market size of lidar applications in automobiles, robotics, and other industries will grow at compound annual growth rates of 103.2%, 50.6%, and 78.1%, respectively, to 1 trillion yuan, 21.2 billion yuan, and 37.2 billion yuan (RMB, same below) between 2022 and 2030, respectively. By type, the global solid-state lidar market will grow to 75.7 billion yuan by 2023, with a compound annual growth rate of 129.5% from 2022 to 2027, which is higher than 38.4% of mechanical lidar. The Insight Consulting Report predicts a CAGR of 102.0% in the size of the global smart sensing software market between 2022 and 2030, which is higher than the 73.7% growth rate for hardware. According to the Insight Consulting Report, the automotive industry is the main growth driver for the lidar solutions market, including the automotive-grade lidar solution market that has been mass-produced. Currently, ADAS applications are the main focus. Due to the growing market demand for autonomous vehicles, the market is expected to experience explosive growth by 2030, accounting for 79.8% of the total lidar solution market. The Insight Consulting Report predicts that the Chinese automotive lidar solution market will grow at a compound rate of 104.2% between 2022 and 2030. By 2030, the Chinese market will account for 34.6% of the global market, making it the largest automotive lidar solution market

Company management

The company's revenue is mainly used for lidar hardware for ADAS and robots. In 2022, this portion of revenue was 400 million yuan, accounting for 75.3% of revenue. Other revenue was revenue from lidar solutions and services combining laser demand hardware and artificial intelligence sensing software.

The company's revenue has risen from 170 million to 530 million yuan in the past three years. Although the average price of lidar footwear fell during this period, the increase in the number of products delivered offset the price drop. In terms of gross profit, the company's gross margin was relatively stable in 2020-2021, but the company lost gross profit in 2022, mainly due to a drop in the price of optical radar products for ADAS applications, which saw a sharp rise in revenue (the average price dropped from about 10,000 yuan in 2021 to 4,300 yuan in 2022) and the increase in semiconductor chip procurement costs. As the company's R&D team and revenue expanded, R&D costs also rose to 310 million yuan in 2022, accounting for 57.7% of revenue. Due to unstable gross profit and increasing R&D expenses year by year, the company is still in a net loss state. Net loss in 2022 increased to 2.09 billion yuan: net loss of 770 million yuan was still recorded in the first half of 2023. In accordance with non-IFRS, the company had an adjusted net loss of $560 million in 2022. In terms of balance sheet, the company had 2.07 billion dollars in cash as of the end of 2022: no accounts receivable or bank loans.

In terms of mass production of the current pipeline, as of the last practical date, the company has achieved SOP (can be mass-produced) for 12 customers. As the company gradually achieves SOP for the remaining models, this shows that there is great potential for revenue growth.

Valuation level

We selected Hong Kong smart car manufacturers and auto parts companies for benchmarking, including Ideal Auto (1505HK), Xiaopeng Motors (9868HK), NIO (9866HK), Zero Sports (9863HK), Minshi Group (425HK), Nexteer (1316HK), etc. In terms of valuation, the company's offering price corresponds to 32.8 times the 2022 market sales rate, all higher than 0.96.1 times that of its peers. Furthermore, the company's offering price is also higher than the newly listed autonomous driving solution provider Zhixing Automotive Technology (1274HK). The company introduced Nanshan Strategic Emerging Industry Investment as a cornerstone investor, subscribing for 100 million US dollars, accounting for 79.3% of the shares sold. The ban period is six months: