稳健的核心业务增长前景；追求超越激光雷达市场的拓展机会

Solidcorebusiness growth outlook; pursuingexpansion opportunitiesbeyondLiDAR market opportunities beyond LiDARmarket Target PriceUS$29.30(Previous TPUS$31.30)Up/Downside47.6%Current PriceUS$19.85 Hesai Group (Hesai) released (24 Mar)4Q25 financial results:total revenuereached RMB1.0bn, up 39.0% YoY, broadly in line with our estimate but 8%below Bloomberg consensus, mainly due to a faster-than-expected decline inASP driven by a revenue mix shift toward relatively lower-ASP ATXand JTseries. Non-GAAPNPcame in at RMB181mn, ahead of both our forecast andBloomberg consensus (RMB107mn/RMB133mn), supported by stronger-than-expected non-operating items.Management raised its 2026E LiDAR shipmentguidance to 3.0–3.5mn units (from 2.0–3.0mn), underpinned by strong growthin both ADAS (driven by FTX and a revamped version of ATX) and roboticsLiDAR (supported by robust adoption of robotic lawn mowers), bothof which areexpected tosee shipmentsdouble YoY. Beyond LiDAR, Hesai highlighted itsambition to position itself as a key enabler of physical AI in the next era andplans to launch two new flagship products in the coming months to address China Software & ITServices Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hk Strong LiDAR shipment volume growth outlook in 2026E.Total LiDARshipmentsfor Hesaireached 631.1k in 4Q25, up 184% YoY and 2% aboveconsensus. Among these, ADAS LiDAR shipments were 550.7k (+185%YoY), while robotics LiDAR shipments were 80.4k (+179% YoY). ASPdeclined to RMB1.6k in 4Q25, down 12% QoQ, which we attribute to therevenue mix shift toward lower-ASP ATX and JT series products.For2026E, we forecast total LiDAR shipments of 3.25mn units (vs. consensus GPM remains resilient despite ASP pressure.Grossprofit margin (GPM)reached 41.0% in 4Q25, in line with consensus. For 2026E, we expect aslight decline in GPM to 39.5% (vs. 41.8% in 2025), primarily due to changesin product mix.Operating expenses (S&M, G&A, and R&D) declined by7%/6% YoY in 4Q25/2025. Management guided for flat or slightly decliningoperating expenses for the existing business, while indicating approximatelyRMB200mn in additional investment related to physical AI in 2026E,and TPof US$29.3 based on 7.5x 2026E P/S.For 2026E,we expect101%/46% YoYgrowth in LiDAR shipment volume/total revenue. Keycatalysts include:1) faster-than-expected adoption of L3 vehicles, whichcould increase LiDAR units per vehicle and drive higher dollar content percar;2) ramp-up in physical AI-related product revenue and increasing Source: FactSet Risks 1)Potential product defects, and other routes of technology proven to be more effectivethan that of LiDAR (suchas camera-based system), which may both lead to reducedmarket adoption of LiDAR solutions;2)Lower-than-expected pace of penetration of LiDAR/ADAS;3)Rising competition from other companies developing LiDAR products, as well asapotential price war inLiDAR industry weighingontheblended ASP of HSAI’s products;4)Higher-than-expected operating expenses leading to slower-than-expected marginexpansion. Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat the analyst covered in this report: (1) allof 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 researchreport within 30 calendar days prior to the date 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 as an 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 or its affiliate(s) have investment banking relationship with the issuers covered in this report in preceding 12months. Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns f