高增长潜力，独特定位

High growth potential with unique positioning Transfer coverage with a BUY rating.Managementhasraisedits revenueCAGRguidance for the next few years from 50%to 60%after HorizonSuperDrive(HSD)rollouts. WebelieveHorizon is well positioned with its risingmarket share in city NOA solutions, upcoming cockpit-driving fusion solutions,pilot operation of robotaxis, and overseas growth amid partnerships with globaltier-1 suppliers.We think it deservesavaluation premium given its unique valuein China’s AD/robotics industries.Continuedhigh R&D investments to support HSD penetration. Target PriceHK$10.00(Previous TPHK$12.30)Up/Downside37.9%Current PriceHK$7.25 ChinaAuto Horizon’s 2H25 revenue rose 51% YoY to RMB2.2bn, in line withour priorforecast.GPM in 2H25 narrowed by 1.4ppts HoH to 64.0%, dragged byproduct solutions including Horizon Mono and Pilot. R&D expenses surged64% YoYto RMB2.9bnin 2H25, about RMB0.3bn higher than our forecast.Thisresulted in an operating lossof RMB1.7bn in 2H25, or about RMB0.1bnworse than our forecast. Adjusted net loss (excluding share-based paymentand fair value changes of preferred shares etc.) in 2H25widened by aboutRMB0.15bn HoH to RMB1.48bn.Poised for high growth withdiversifiedsolutionsand clients.HSD, a Ji SHI, CFA(852) 37618728shiji@cmbi.com.hk Wenjing DOU, CFA(852) 6939 4751douwenjing@cmbi.com.hk Austin Liang(852) 3900 0856austinliang@cmbi.com.hk city NOA solution with in-house algorithm powered by its most advancedchips, has beenwellreceived.Management expects HSD sales volume torise 18x YoY to 0.4mn unitsin FY26E and we projectsuch numbersto bemore than doubled YoYin both FY27E and FY28E. It plans to roll outcockpit-driving fusion SoC, Agentic CAR, this year to furthersupport HSDsales growth. We expect such solutions tostart mass production by the endof FY26E, which could be quite competitive givenitslaunch timeis close tothe Qualcomm SA8797 and its proven capabilities inADsolutions. Horizonalso targets pilot operation of robotaxis in 3Q26 with ecosystem partners,showcasing its comprehensive AD capabilities.We are of the view thatinvestors should not underestimate Horizon’s growth potential in overseasmarkets and fromforeign carmakers, as it partners with global leading tier-1 suppliers. It has secured shipment of model nominations of 10mn unitsover the lifecycle from3foreign marques.Earnings/Valuation.Management guideda revenue CAGR of 60% for the Stock Data next few years, which exceeds our prior forecast.We project revenue to rise57%/65%/60% YoY in FY26-28E, driven by 5.5mn/7.3mn/9.1mn shipmentsand surging priceswith higher HSDcontribution.We expect adj. net loss tonarrow in FY26-27E and an adj. net profit of RMB2.5bn in FY28E.Wemaintain our BUY rating with a new target price of HK$10.00, which is basedon 13xFY27E P/S, a similar level to Nvidia’s (NVDA US, NR). We are of theview that such valuation is justified given its scarcity in both chip and softwarecapabilities in China’s AD/robotics industries and its unique valueamidcurrent geopolitical tensions.Key risks to our rating and target price includelower sales volume, especially for HSD,intensifying competition or moreautomakers using proprietary AD solutions, as well as a sector de-rating.Earnings Summary Source: FactSet Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsiblefor the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates(as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3) serve asan officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% overnext 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with therelevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months CMB InternationalGlobal MarketsLimited