Cinda International: Maintaining the Hesai-W (02525) “Buy” Rating Target Price of HK$200

The Zhitong Finance App learned that Cinda International released a research report stating that the profitability and cash flow of Hesai-W (02525) is superior to its peers, supports valuation premiums, and maintains its “buy” rating and target price of HK$200. According to the agency's comprehensive forecast, the market expects a compound annual increase of 41% and 321% in revenue and adjusted profit for fiscal year 24 to 27, respectively. The current price corresponds to 5.5 times the projected market sales rate for FY26, which is 4.7 times higher than the market sales rate forecast for FY26 (02498). However, according to Insight Consulting data, the company was the first lidar company in the world to achieve net profit for the whole year (measured by non-GAAP), and recorded positive operating cash flow for the whole year in both fiscal year 23 and 24, making it the first lidar listed company to generate positive operating cash flow.

Cinda International's main views are as follows:

In the third quarter of 2025, the annual profit target was achieved ahead of schedule, and the guidelines were raised

The company is a global leader in lidar. Shipments of advanced driver assistance systems (ADAS) and robot lidars grew strongly in the third quarter, surging 1.9 times and 13.1 times year-on-year respectively, accounting for 86% and 14% respectively in terms of shipment volume. Net revenue for the quarter was 795 million yuan, up 47.5% year on year. The scale effect expanded, and sales expenses, management expenses and R&D expenses fell across the board. Net profit for the third quarter was 256 million yuan, a record high, with a loss of 70.4 million yuan in the same period last year. The cumulative net profit for the first three quarters was 283 million yuan, reaching the annual net profit target (200 million to 350 million yuan) ahead of schedule. The company then raised the annual net profit guideline to 350 million yuan to 450 million yuan.

Mainland L3 autonomous driving is being implemented at an accelerated pace, and industry regulations are becoming clear

Admission permits for the first batch of L3 class conditional autonomous vehicles in mainland China were officially released, and two models, Changan Automobile and BAIC Jihu, were approved to be piloted on designated highways and expressways in Beijing and Chongqing. Since then, Xiaomi Motors, Xiaopeng Motors and others have successively announced that they have obtained L3 autonomous driving road test licenses in Beijing and Guangzhou. The promotion of regulations shows a shift in the regulatory environment. If L3 level autonomous driving can move from technical verification to mass production application, examples of commercialization are expected to boost the valuation of the autonomous driving industry chain.

The field of automotive lidar has steadily ranked first in the industry, and new products have been delivered on a large scale

As autonomous driving evolves to a higher level, it is expected that each vehicle will be equipped with more lidar devices. The market estimates that the number of lidars per L3 class model is 3-6, which is an increase from 1-2 L2 class lidars. Meanwhile, Hesai has been designated for mass production of more than 120 models. According to data from the Geshe Automobile Research Institute, the company has been ranked first in the industry for seven consecutive months in the field of automotive lidar. In August, its market share reached 46%, which is expected to benefit from increased penetration. Currently, major customers include Ideal Automobile-W (02015), Xiaomi Group-W (01810), and Zero Sports (09863). The ET series, which focuses on low-cost, high-performance core products, and new products for L3 autonomous driving will be delivered on a large scale from 2025 to 2027. In addition, the company also maintains a leading edge in the lidar market for autonomous taxis (Robotaxi). Nine of the top ten global Robotaxi companies have chosen Hesai as their main lidar supplier.

The robotics business is growing explosively, and overseas demand is strong

Lidar products have been widely used in various mobile robot scenarios such as logistics distribution, mowing robots, and industrial automation. Hesai JT series lidars continue to be popular in overseas markets. By the end of May, cumulative shipments had exceeded 100,000 units, and the company expects annual robot lidar shipments to exceed 200,000 units.