Company profile

A global leader in lidar, with full-stack solution capabilities. The company started with self-developed robotic lidar, entered the automotive-level market, and has a full-stack lidar solution from hardware to software. In 2023, the company achieved operating income of 1.12 billion yuan, an increase of 111.2% over the previous year, and achieved an adjusted net loss of 0.43 billion yuan (net profit was affected by non-cash items such as share payments and fair value changes in financial instruments issued to investors), reducing losses by 22.9% year on year.

The company's IPO on January 5, 2024 raised approximately HK$0.877 billion, and the issue price was HK$43.

Investment logic

Automotive lidars are not easy to replace, have low penetration rates, large space, and cost advantages are more competitive, and product prices are expected to bottom up. Lidar is irreplaceable in ADAS, which has strict requirements for information accuracy and security. We expect that with the increase in the penetration rate of autonomous driving in the long term, China's market size is expected to reach 10.3 billion yuan in 2026, and the global market size is expected to reach 11.4 billion yuan. The company is the world's top lidar and solution provider in terms of sales revenue, fixed-point orders, and SOP (25 models). It maintains a lead in market competition and has a cost advantage. It is expected that its market share will increase further in the future.

Based on “technical barriers+huge customer base+mass production capacity”, we have developed from a lidar leader to an AI+ robot platform-level enterprise. The company's core strengths are 1) it has a full-stack lidar solution from hardware to software, and the product iteration speed is fast; 2) it has a diverse and huge customer base for automakers and robots in various fields such as logistics and cleaning; 3) it has mass production capacity at its own factories in three regions. The company has completed the “chip+hardware+AI software” full-link solution layout around lidar and established a “magic supercomputing center”. The core technology reserves are highly compatible with AI robots.

Profit forecasts, valuations, and ratings

The company's revenue for 24-26 is estimated to be 2.4/4.19/5.72 billion yuan, respectively, and net profit to mother of -0.29/0.04/0.09 billion yuan, respectively. The market sales ratio method was used to evaluate the company, and 5 comparable companies were selected, and the company was given a 24-year PS valuation of 6 times, with a target price of 31.86 yuan/share. First coverage, giving a “buy” rating.

Risk warning

Risk of autonomous driving technology route change; risk of passenger car sales and autonomous driving penetration falling short of expectations; risk of lidar cost reduction falling short of expectations; risk of the international situation affecting overseas sales; risk of lifting the ban on restricted stocks.