According to the research report released by Haitong Securities, with the gradual implementation of advanced intelligent driving functions and the benchmark effect of mass production of advanced intelligent driving functions by leading automobile manufacturers, advanced intelligent driving functions have initially captured the minds of users.

Hesai Technology released its financial report for the second quarter of 2024. In the second quarter, the company achieved revenue of 0.46 billion yuan, an increase of 4.2% YoY. The global total delivery volume of lidar was 86526 units, an increase of 66.1% YoY (including the global delivery volume of ADAS products was 80773 units, an increase of 76.8% YoY). The comprehensive gross margin of the ADAS and Robotaxi business was 45.1%, and the overall gross margin of the company was approximately 0.21 billion yuan. In the first half of 2024, the global total delivery volume of Hesai lidar was 145,627 units, an increase of 67.5% YoY (including the global total delivery volume of ADAS products was 133,235 units, an increase of 80.3% YoY). As of the second quarter of 2024, Hesai has reached mass production cooperation with 19 domestic and foreign automobile manufacturers for more than 70 models. In terms of overseas market expansion, Hesai has reached cooperation with four global leading automobile manufacturers, including reaching mass production cooperation with three global leading international automobile manufacturers in China through joint ventures and entering an important verification stage of the cooperation for mass production transition with an international top-level automobile brand global mass-produced model.

Suteng Juchuang released its financial report for the second quarter of 2024. The total revenue for the first half of the year reached 0.727 billion yuan, an increase of approximately 121.0% YoY. Among them, the total sales volume of lidar was about 243,400 units, close to the annual sales volume in 2023, with a YoY increase of approximately 415.7%. As of the second quarter of 2024, the cumulative total sales volume of lidar by the company exceeded 0.58 million units. In the first half of the year, the overall gross margin of the company was 13.6%, an increase of nearly 10 percentage points YoY, and it is expected to further improve in the second half of the year. As of the second quarter of 2024, Suteng Juchuang has successfully obtained mass production orders for 80 models from 22 automobile manufacturers and tier one suppliers, and has achieved SOP for 29 models of 12 customers. In terms of new products, in the first half of 2024, Suteng Juchuang successively released the long-range lidar M3 and the full-stack chip-based medium-to-long-range lidar MX, leading the industry change with the product strategy of "technology advancement, equal access to technology", and accelerating the upgrading and iteration of the industry. As of the end of July, the new products have obtained mass production orders for multiple models from 5 customers, and the first mass production project is expected to be realized in the first half of 2025.

Investment recommendation: Haitong Securities believes that with the gradual implementation of advanced intelligent driving functions and the benchmark effect of mass production of advanced intelligent driving functions by leading automobile manufacturers, advanced intelligent driving functions have initially captured the minds of users. The industry market scale continues to expand, combined with the rapid growth of end-user demand, which brings new vitality to the high-quality development of the lidar market. It is recommended to pay attention to related companies in the industry chain, such as Hesai Technology and Suteng Juchuang.

Risk reminder: Insufficient penetration of intelligent driving, excessive competition, and unexpected delays in new product development.