UBS: Initial Momenta-W (06880) “buy” rating target price of HK$360

The Zhitong Finance App learned that UBS released a research report stating that it first awarded Momenta-W (06880) “buy” rating to the largest autonomous driving software supplier in China (based on OEM coverage), with a target price of HK$360. The bank believes that Momenta's technology and scale make it a natural partner for leading local and global car companies, helping to accelerate the era of autonomous driving. Despite competition, profitability, and regulatory risks, its asset-light business model, along with strong revenue growth, is expected to provide the company with operational leverage to generate high profit margins, thereby supporting higher price-sales ratio (P/S) valuations.

UBS pointed out that with rapid technology upgrades and cost reductions, the penetration rate of L2+ advanced assisted driving (ADAS) in models in various price ranges is accelerating, and is increasingly becoming an essential feature for competitive models. The bank expects Momenta to benefit most from the L2+ ADAS development trend. Its annual installation volume is expected to grow from 51,000 units in 2025 to 2.5 million units in 2028, and its market share in China's annual automobile sales will also increase from less than 2% to 10%. Driven by the expansion of car companies' coverage, increased vehicle installation volume, and the Robotaxi and Robovan business, Momenta predicts a compound annual revenue growth rate of about 50% between 2025 and 2030, and is expected to achieve balance of payments in 2028.