In the capital market, financial reports are generally regarded as the “litmus test” for growth stocks with the highest gold content.

Take HSAI.US (HSAI.US), which just revealed its financial report for the first quarter of 2024, the company's latest financial report has sent many noteworthy signals to the outside world. According to the data, during the Q1 period, Hesai's revenue was 360 million yuan (RMB, same unit below), higher than the guideline range of 32 to 350 million, and the scale continued to rank first among global lidar manufacturers. At the same time as the business is developing steadily, the comprehensive gross margin of Hesai's RoboTaxi business and ADAS business was 38.8%, an increase of 0.9 pct over the previous year. Profitability was further strengthened, far ahead of other peers.

Also, it is worth mentioning that Hesai also revealed at the Q1 earnings conference that the company is expected to be profitable in the fourth quarter of 2024.

Compared to established achievements in core financial data, the other notable changes in Hesai's quarterly report include that the company's products continue to be certified by downstream customers. During this period, Hesai made breakthrough progress in global front-end mass production cooperation. According to the first quarterly report, in the first quarter, Hesai reached targeted cooperation for mass production of lidar with two of the top ten global car manufacturers by global revenue, including global mass-produced models from a top international car brand. Up to now, Hesai has reached targeted mass-production partnerships with 6 of the 10 highest-grossing international car manufacturers in the “Fortune” World 500 list or their joint venture partners.

It was the first to break through in the overseas front-end mass production market, which is surrounded by international manufacturers. Next, Hesai may soon be able to overcome the “acceleration” of global development. Aiming at the global automotive lidar market with great potential, Hesai is expected to be the first in the industry to cross the break-even line clearly deserves investors' long-term attention.

Obtain global high-quality fixed points and enhance performance certainty

In the last two years, pure visual perception solutions led by Tesla have developed rapidly. In this context, disputes over the prospects of lidar technology routes have also resurfaced in the capital market.

Despite the endless “noise” in the market, the facts never speak louder than words. Judging from the fact that the number of car companies that issued targets to Hesai has not decreased but increased over the years, and that there has been no shortage of leading car companies around the world during that time, the value of lidar is clearly still underestimated.

According to the Hesai Quarterly Report, at present, Hesai has received a total of nearly 70 models from 18 OEMs and Tier-1 customers in the front-end mass production market.

In the domestic market, in addition to continuing to be deeply tied to ideal cars, Hesai has also won the favor of new phenomenal players, Xiaomi Auto. According to data from the Xiaomi SU7 New Vehicle Launch Report, the lidar purchase rate is expected to exceed 70%.

With the “jewel ahead” of the big customers mentioned above, more car companies that were still on the sidelines have also switched to choosing Hesai one after another. According to information, car companies including Great Wall, Changan, and Zero Sports have recently switched to using Hesai's lidar. At the same time, there is also market news that Hesai has already entered BYD's supply chain, and it is expected that new models will be launched along with BYD within this year.

At the same time, Hesai has also begun to solicit high-quality customers in overseas markets. According to information, in addition to being selected by two global OEMs to supply ADAS lidars for their new electric models, Hesai is also conducting 13 RFI/RFQs at 9 international car manufacturers in North America, Europe, and Asia other than China.

For lidar manufacturers, getting more fixed points can only be considered to have completed the stage from 0 to 1, and the next step that tests “internal skills” is to convert fixed points into full orders and achieve mass production delivery with quality and quantity. And in this regard, Hesai is clearly in a leading position in the industry.

According to the data, the number of lidar products delivered in Q1 this year reached 59,101 units, compared to 3,4834 units in the same period last year, compared to only 6,926 units in the first quarter of 2022. Among these, the ADAS lidar's amplification is clearly the biggest contributor. During the 22Q1, 23Q1, and 24Q1 periods, the number of ADAS lidars delivered by Hesai was 222, 28,195, and 52,462, respectively, maintaining a high growth trend.

Since Hesai is now becoming the core supplier for more and more leading car companies, it can be expected that the company's lidar shipments will continue to grow at a high rate in the next few years.

The big new ATX series is expected to bring in new volume

Being in the field of advanced intelligent driving perception at a thousand miles a day, efficiency is undoubtedly the focus of competition among major companies. Whether it's developing a new product or mass-producing and delivering it as soon as the new technology is implemented, efficiency is one of the decisive factors that determine the success or failure of an enterprise. To paraphrase Hesai CEO Li Yifan, “This is a game of speed competition.”

With the outstanding design and independent manufacturing capabilities of self-developed lidar chips (ASICs), Hesai has always maintained industry-leading R&D and manufacturing efficiency. The latest example is that at this year's Beijing Auto Show, Hesaixin unveiled a compact, high-performance long-range lidar ATX.

According to information, ATX is equipped with a fourth-generation chip architecture, and the optical design and laser transceiver module have been completely upgraded. Compared with the AT128, Hesai's previous main product, the product is 60% smaller and 50% lighter. More importantly, while achieving a smaller size, the product's core performance has also been fully upgraded. Not only can the maximum detection distance reach 300 meters, but through 7x optical zoom, an ultra-wide horizontal field of view of 140° can be achieved, helping smart cars to detect complex road conditions on both sides in a timely manner, such as emergency traffic jams, pedestrians, or non-motor vehicles crossing, etc., effectively improving the safety of assisted driving in urban areas. In addition, ATX is equipped with the world's first intelligent point cloud analysis engine, which can filter 99.9% of ambient noise from rain and fog.

In addition to having better performance and quality, ATX also has “DNA” that is extremely cost-effective. According to information, under the ASIC architecture, 70% of the parts and components of Hesai's AT and ET product series can be shared, which effectively reduces supply chain management costs. For car companies, more manageable parts costs also mean that it is possible for intelligent driving to sink into the mass consumer price range of 150,000 yuan and below.

Up to now, ATX has been targeted for front-end mass production projects from 4 leading global and domestic OEMs, and large-scale mass production is expected to begin in the first quarter of 2025. It can be expected that with comprehensive advantages in multiple dimensions such as performance, quality, and cost, the ATX series is expected to be released in 2026 and become the main force for ADAS radar shipments.

Finally, looking back at Hesai's quarterly report, in the fiercely competitive lidar market, Hesai has taken into account steady scale development and optimization of profitability. Since the company has successively obtained high-quality targets at home and abroad, and has successively launched more competitive lidar products, it is foreseeable that the certainty of Hesai's performance will continue to rise in the future, and the company's self-“ hematopoietic” ability will also be further enhanced after crossing the break-even line.