---
title: "HSAI: Cut Losses, Hold the Line — Sector Leader Under Pressure?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/40909923.md"
description: "2026 will remain a 'price-for-volume' year for Hesai Group amid high-stakes competition."
datetime: "2026-05-19T13:02:23.000Z"
locales:
  - [en](https://longbridge.com/en/topics/40909923.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/40909923.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/40909923.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# HSAI: Cut Losses, Hold the Line — Sector Leader Under Pressure?

$Hesai(HSAI.US) released its Q1 2026 results after Hong Kong market close on May 19 Beijing time. The print came in slightly above expectations and continued to show a classic price-for-volume pattern, with lower ASPs driving outsized unit growth.

**1) Revenue: more units, lower price, a slight beat.** In Q1, HSAI delivered revenue of RMB 680 mn (+29.6% YoY), near the upper end of its RMB 650–700 mn guidance. Growth was entirely driven by stronger-than-expected shipments.

**2) Shipments beat; seasonally weak quarter proved resilient, with ADAS and robotics as twin engines.** Despite seasonal weakness and the step-down of state subsidies on NEV purchases in China (domestic NEV sales -4% YoY), total shipments reached 477k units, above the 400–450k guide. This again underscores rapid lidar penetration into mass-market models.

ADAS shipments were 353k (+142% YoY). Growth was led by the RMB 1k-class ATX ramping in RMB 100k–200k vehicles (e.g., BYD, Geely), with low-cost blind-spot FTX also starting to scale.

Robotics shipments were 124k (+138% YoY), topping the 100k guide. The JT series for lawn-mower and similar use cases did most of the heavy lifting.

**3) ASP still deflating: mix downshift and tougher competition are the key drivers.** Both product structure and a more crowded field continue to weigh on pricing.

Q1 blended ASP was ~RMB 1,441, down 45% YoY and a further 7% QoQ. Even with higher-priced robotics share rising 13ppt QoQ to 25%, overall ASP was dragged by mix downshift and competition, reflecting a deliberate price-for-volume strategy.

a. Low-priced ATX (custom SKUs for BYD and Geely) took a larger share. These custom SKUs are estimated at ~RMB 800 per unit, well below the US$150 price point for the standard ATX in 2026.

b. Low-cost FTX blind-spot lidar (ASP ~US$100) began to ship. This further pushed blended ASP lower.

**4) GPM under pressure, slipping below the 40% threshold.** Q1 GPM came in at 39.1%, down 260bps YoY, below the 39.9% street view and below the company's usual 40%+ level.

Dolphin Research believes the decline mainly reflects the following. Two factors stand out.

a. ASP deflation (−45% YoY) outpaced cost improvements (e.g., in-house chips), and seasonal scale benefits did not kick in. This weighed on gross profit.

b. Higher-margin service revenue share fell 2.8ppt YoY to just 0.1%. The mix shift further dragged the overall GPM.

**5) Opex tightly managed, but core OP remained slightly in the red.** Total opex was RMB 300 mn; against ~30% revenue growth, opex rose only 4% YoY. This reflects internal efficiency gains and a more disciplined operating approach.

Core operating profit was RMB -30 mn, a small loss. The shortfall was mainly due to ASP deflation lowering gross profit and lack of seasonal scale. Even so, results were slightly better than expected.

**Dolphin Research key takeaways:** Overall, the quarter landed broadly in line: revenue slightly above the midpoint of guidance, and GAAP net profit modestly above breakeven guidance (helped by non-recurring gains). The core growth driver remained a shipment beat.

However, the print also highlights the key tension: aggressive price deflation pulled GPM further down to 39.7%, breaking the 40% line. Beyond tech-driven cost downs, intensified competition is pushing the company to trade price for volume to defend share against products like RoboSense EMX.

That sets up 2026 as a full-on year of price-for-volume. With the higher-priced ETX (L3 core lidar) not ramping until year-end, competition will center on lower-priced L2 units (ATX/FTX), while humanoid robotics remains an out-of-the-money option with limited near-term revenue.

Looking into the mid-to-long term, while near-term competition and GPM pressure are real, HSAI remains a high-certainty beneficiary as the leader under the dual pillars of rising ADAS penetration and a second growth curve in robotics. The long-term setup stays intact.

**But for 2026 specifically, this is an unavoidable pain point of navigating a price war and positioning for the next-gen sensor ecosystem.** The year will be about holding share and building scale.

**① Full-year shipments to remain strong, but ASP set to contract on intensified competition.** Stronger competition will be the key headwind for pricing.

**a. Shipments to grow rapidly:** HSAI raised its 2026 shipment guide from 2–3 mn to 3–3.5 mn units, implying +85% to +116% YoY. To meet demand, annual capacity is planned to more than double from 2.0 mn units in 2025 to 4.0+ mn in 2026, with both ADAS and robotics expected to double.

**ADAS:** ADAS shipments are guided at 2.5–3.0 mn units (with ~200–300k FTX blind-spot units, and the rest RMB 1k-class ATX). Growth drivers include two vectors.

① Further ATX penetration into L2+ mass-market segments (lidar has reached the RMB 80k–100k vehicle band). ② L3 adoption will multiply per-vehicle lidar counts, though the ramp may slip to late 2026 or even 2027, taking system value from ~US$200 at L2 to US$500–1,000, with higher customer tolerance for pricing.

By customer, 2026 incremental volume is expected to be anchored by Xiaomi (~550k, sole supplier), Leapmotor (~600k, near sole supplier), Li Auto (~450–500k, sole supplier), BYD (~300–350k, roughly half of orders), Geely (~500k), and Great Wall (~200k). These accounts represent the bulk of ADAS growth.

**Robotics:** Shipment guidance is ~500k units (+109% YoY), still led by the JT series at ~RMB 1,000 ASP (~450k units) to brands such as Dreame and Mova for lawn-mower robots. The share of higher-value robotics lidar remains low.

Given the Q1 shipment beat, Dolphin Research expects full-year shipments to reach near the top end at ~3.4 mn units. The bias is to the high side of the guide.

**b. But ASP will keep compressing:** As competitors (e.g., RoboSense EMX) narrow the product gap and began large-scale shipments in Q4 2025, price competition has intensified. As the leader, HSAI is giving up its historical 10–20% premium to defend share via price-for-volume.

**Specifically:** The following dynamics will pressure blended pricing.

a. While the standard ATX is expected to stay around US$150 in 2026, custom SKUs for high-volume customers like BYD and Geely are ~RMB 800. As their mix rises, the ATX line average will fall.

b. FTX blind-spot radar ASP is guided at ~US$100. This caps blended pricing.

c. The higher-value ETX will not mass-produce until late 2026. Mix uplift from ETX will be limited before then.

As a result, blended lidar ASP will keep deflating in 2026. Based on guidance (revenue RMB 4.2–4.6 bn; shipments 3.0–3.5 mn), implied blended ASP is RMB 1,300–1,380, down 25–29% vs. the 2025 ASP of RMB 1,844, a steeper decline than Dolphin Research expected.

Accordingly, Dolphin Research now expects 2026 blended ASP to fall 28% YoY to RMB 1,320, especially after a weaker-than-expected Q1 price level. We expect 2026 revenue of RMB 4.58 bn (+51% YoY), near the top end of the company's range.

**c. Despite ASP pressure, HSAI previously expected FY26 GPM to stay resilient on cost-downs and scale benefits, mainly from:** Technology integration and manufacturing scale are the primary levers.

a. Localization and high integration of the main SoC (in-house FMC500 based on RISC-V, integrating MCU, FPGA, and ADC), moving to a single-chip solution that slashes core chip costs, historically ~40% of BOM. This materially lowers unit costs.

b. In-house SPAD integration (mass production in 2026). Internalizing key components should support margin.

c. Scale benefits from 3.0–3.5 mn units and highly automated manufacturing. Fixed-cost absorption should improve as volume ramps.

That said, the sharp Q1 ASP decline (blended ASP −45% YoY) clearly dented GPM, which dipped below 40% to 39.1%. Considering full-year mix (higher share of low-price ATX/FTX with ETX only ramping at year-end), Dolphin Research conservatively expects FY26 GPM to fall 180bps YoY to ~40%.

**d. On expenses:** Total opex is expected to rise ~15% YoY, with roughly RMB 200 mn of forward-looking investment into the new robotics business (the 'physical AI eye' for integrated sensing and the 'physical AI muscle' for micro-motors). This spend is separate from the external Sharpa vehicle and is HSAI's investment in its second growth curve.

As the new business contributes limited near-term revenue, the incremental RMB 200 mn will constrain FY26 profit delivery in the short term. Excluding the new-business spend, core opex is expected to be flat to down low-single digits, reflecting solid cost control.

**At the current share price, Dolphin Research models 2026 revenue of RMB 4.58 bn (+51% YoY) and net profit of RMB 600 mn (midpoint of the RMB 500–700 mn guide), +38% YoY.** **On that growth, we assign 35–40x PE for 2026, implying fair value of RMB 21–24 bn, broadly in line with the current market cap.**

**Near term: with competition centered on low-cost L2+ lidars, rival tech routes catching up, and share pressure ongoing, upside looks limited.** **ETX and high-margin overseas orders will not contribute meaningfully until late 2026 or 2027, and robotics remains an unpriced option for now.**

**Longer term: lidar exhibits a Moore-like curve (exponential point-cloud density, exponential cost declines) and high moats from ecosystem lock-in and scale.** **As the leader under the dual logics of rising ADAS penetration and a second-curve robotics expansion, HSAI remains a high-certainty long-term beneficiary.**

**① Share may be pressured near term, but tech coverage is broad; share should stabilize mid-to-long term.** Despite share volatility since H2 last year due to Huawei's blind-spot lidar ramp, Huawei primarily ships as an integrated HW+SW stack into its own ecosystems (Aito and HI models) at higher prices.

Thus, among independent Tier-1 suppliers, the real contest remains between HSAI, RoboSense, and Tudatong. HSAI still holds the No.1 spot on strong low-cost ATX shipments, but RoboSense EMX has been ramping since Q4 last year, implying continued share pressure in 2026.

**② L3 will multiply per-vehicle lidar counts.** As noted, L3 demand upgrades from a single ATX to '1 main unit (ATX/ETX) + multiple FTX blind-spot units,' lifting per-vehicle value from ~US$200 to US$500–1,000. HSAI's ETX is slated for mass production from late 2026 into 2027, positioning it to benefit directly.

**③ Overseas poised for a breakthrough, with NVIDIA ecosystem leverage.** HSAI has completed C-sample development of a long-range lidar for a leading European OEM and expects overseas mass production by end-2026. It has also been selected for NVIDIA Drive Hyperion, giving it preferred partner status when OEMs adopt NVIDIA solutions and materially improving product integration and scalability.

Given overseas customers' lower price sensitivity and preference for higher-end products, international expansion will help offset domestic ASP pressure. Profit elasticity should start to release by late 2026 or 2027.

**④ Robotics as the second growth curve.** HSAI is pursuing a dual-track approach.

In-house: a general-purpose sensor path with the 'physical AI eye' (fully integrated sensor) and 'physical AI muscle' (micro-motors), targeting a 50/50 revenue split with lidar in five years. External (Sharpa): via founder-backed Sharpa for dexterous hands, where HSAI can supply micro-motors or act as a contract manufacturer, with higher per-unit value.

Commercialization here will be gradual and remains in the investment phase. This is a long-dated, high-value option that could unlock significant valuation upside once humanoid robots scale.

From a long-term TAM perspective, the current ~RMB 25.6 bn market cap largely reflects the domestic passenger-car ADAS base (a conservative RMB 40 bn market by 2030). With overseas breakthroughs, the most comprehensive next-gen lidar roadmap, and a sizable robotics option, medium-to-long-term upside remains solid.

See [**Hesai: A Tesla castoff? Lidar's stylish comeback**](https://longportapp.cn/zh-CN/topics/33959548?app_id=longbridge&utm_source=longbridge_app_share&channel=t33959548&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1) for detailed valuation work. More details are available via the link.

![32](https://pub.pbkrs.com/cms/2026/0/1UZLLS6PXCsDrC5HBSsbyvtTN3J3x3yj.jpg?x-oss-process=style/lg)

**Past articles:** See below. Additional references follow.

Hesai deep dives:

[**'4x' Hesai: Why a Tesla castoff found new light**](https://longportapp.cn/zh-CN/topics/31812806?app_id=longbridge&utm_source=longbridge_app_share&channel=t31812806&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1). See link for the full analysis.

[**Hesai: A Tesla castoff?**](https://longportapp.cn/zh-CN/topics/33959548?app_id=longbridge&utm_source=longbridge_app_share&channel=t33959548&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1) **Lidar's stylish comeback**. Full details in the article.

**Hesai earnings**. See links below.

[**Hesai: Shipments surging for the 'eye of intelligent driving'—can it soar again?**](https://longportapp.cn/zh-CN/topics/33018953?app_id=longbridge&utm_source=longbridge_app_share&channel=t33018953&invite-code=4NOXYT&locale=zh-CN&community_badge=1&profile_following_followers_activities=1). Click through for the report.

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