Key investment points:
A global leader in both software and hardware, lidar and perception solutions. RoboSense (RoboSense) was founded in 2014 and is headquartered in Shenzhen. It is a leading domestic lidar technology company. Its products cover lidar hardware, HyperVision integrated sensing software and integrated solutions.
Adhere to the strategy of self-development of chips. Focus on developing chip-driven lidar platforms based on self-developed chip lidar technology to achieve rapid and efficient hardware product iteration. In the early application exploration phase, we used discrete devices and launched R platform products to meet the market's demand for excellent performance. In order to further reduce costs and improve quality, we have successfully developed M and E platforms by focusing more on developing proprietary chips independently. Vehicle lidar competition is not only a competition of performance; cost control will remain the core of industry competition in the short to medium term. Self-developed chips can not only strengthen technical barriers, but also provide sufficient ammunition for long-term price competition and provide sufficient space for profit growth.
Integrating software and hardware, self-developed software enhances product performance. Sagitar's artificial intelligence sensing software HyperVision converts raw sensor data collected by lidars and cameras into high-quality perception information that can be directly used by autonomous vehicles and robots.
The automotive ADAS lidar business is growing rapidly, accelerating the construction of scale effects. As of June 2024, it has successfully obtained fixed-production orders for 80 models from 22 automakers and tier-1 suppliers, and SOP has been achieved for 29 models from 12 of these customers. Of these, 17 new models were added in the first half of 2024. Mass production in the first half of 2024 includes popular models such as the new ZEEKR 001 and 009, SAIC Zhiji L6 and L7. We believe that Sagitar's broad “circle of friends” will form a solid foundation for its mass production, which is conducive to the formation of scale effects.
The lidar is expected to enter the 0.1-0.2 million model configuration range. The landmark event was that models such as the Zero Run C10 were equipped with lidar for less than 0.2 million yuan. In addition, 0.2 million yuan support for advanced intelligence functions has begun to become a differentiated selling point. As an “airbag” for intelligent driving, the configuration rate of lidar is expected to increase within 0.1-0.2 million yuan.
Profit forecast and investment advice: We expect the company's 2024-2026 revenue to be 1.73/3.28/4.6 billion yuan, respectively, net profit to mother of -0.451/-0.232/0.003 billion yuan, and EPS of -1.00/-0.52/0.01 yuan respectively. Considering that the company is still in a stage of rapid growth and has yet to achieve profit, it is more appropriate to adopt the market-sales ratio valuation method. Referring to comparable company estimates, we gave 6.0 times PS in 2025, corresponding to a target price of HK$46.20 (HK$1 = Rmb0.9242). The first coverage gave it an “better than the market” rating.
Risk warning: Lidar penetration rate growth falls short of expectations, R&D progress falls short of expectations, etc.
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