"Big Banks" Bank of America Securities lowers Hesai's target price to 234 yuan, reiterates "Buy" rating

Bank of America Securities published a report indicating that Hesai-W (02525.HK) had lower-than-expected revenue in the fourth quarter of last year, with a year-on-year growth of 39% to RMB 1 billion (same below), which was 19% lower than the bank's forecast; the gross profit margin remained robust at 41%. During the period, net profit grew 4% year-on-year but fell 40% quarter-on-quarter to RMB 153 million, missing the bank's expectation by 9%, mainly due to a one-time gain from the sale of equity investments recorded in the third quarter.

The bank stated that Hesai has raised its shipment guidance for this year from 2 million to 3 million units to 3 million to 3.5 million units, including 500,000 robotic lidar units, mainly benefiting from the trend of equipping multiple lidars per vehicle and the strong momentum of robotic lidars. Due to standard annual price reductions, discounts offered to core automotive OEM customers, and changes in product mix, the average selling price is expected to decline, but the gross profit margin is anticipated to remain strong under ongoing cost optimization. The company plans to invest an additional RMB 200 million in operating expenses this year to accelerate the development of new businesses.

The bank raised its laser radar shipment forecasts for Hesai for this year and next year by 15% each, but lowered its revenue forecast for this year by 4% and profit forecast by 16% to reflect higher operating expenses; the target price for Hesai (HSAI.US) in the US stock market was lowered from $32 to $30; the target price for Hesai's H shares was lowered from HKD 250 to HKD 234, reiterating a "Buy" rating