Morgan Stanley lowers the target price for HORIZONROBOT-W to 10 yuan, rating it "Overweight."

Morgan Stanley published a research report, lowering the target price for Horizon Robotics (09660.HK) from HKD 11.5 to HKD 10, with a rating of "Overweight." At the same time, it adjusted its earnings forecasts for 2026 to 2028, expecting that the shipment volume of autonomous driving chips during this period will be higher than previously anticipated, but lowered the gross margin forecast due to changes in the product mix. Additionally, it expects that the research and development expenses for the next-generation intelligent driving chip Journey 7 (J7) platform will be higher than previously expected before its launch at the end of this year or early next year.

The firm believes that Horizon's stock price has underperformed the market this year, reflecting factors such as weak domestic automotive demand, rising memory costs, intensified competition, and high research and development expenditures. The firm is optimistic about the company's capacity ramp-up for J6P or HSD, the debut of integrated intelligent cockpit driving solutions, and the upcoming launch of the J7 platform at the end of this year or early next year