<div id="readability-page-1"><div>Daiwa said in a report that HESAI-W (02525.HK) +1.400 (+0.883%) Short selling $38.72M; Ratio 45.767% is transitioning from a single-engine growth model (LiDAR) to a dual-engine model, combining LiDAR scale expansion with monetization of spatial intelligence. The broker noted potential changes in its valuation framework and long-term profit trajectory.The report cited management as expecting to start reporting revenue from Kosmo, its spatial intelligence device integrated with AI algorithms, from 2Q onward. Daiwa believes Kosmo is not merely a new product but a new business model. Management has positioned Kosmo as a scalable recurring revenue ecosystem, supporting hardware sales, software licensing, and cloud platform services. Kosmo improves the efficiency of 3D environment reconstruction, saving four-fifths of the time compared with the traditional 3DGS process. The company said it has secured initial orders from AI companies, entertainment studios, and industrial enterprises.In addition, the report stated that Hesai Group's core LiDAR business continues to demonstrate strong momentum. In 1Q, it secured new orders from key customers including Li Auto, Xiaomi, Geely and Mercedes-Benz. The company will also join the supply chain of GAC Toyota BZ3X and Xiaomi's overseas vehicle models next year.Daiwa raised its revenue forecasts for this year and next by 1% to 6%, reflecting the inclusion of the SGI business in its projections. It reiterated its Buy rating and changed its valuation methodology from price-to-sales to price-to-earnings, as the company has recorded quarterly profitability. The US stock TP for Hesai Group (HSAI.US) was lifted from USD34 to USD36. (da/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-21 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)</div></div>

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Daiwa has raised Hesai Group's target price to USD36 and reiterated a Buy rating, switching its valuation method to P/E. The report highlights Hesai's transition to a dual-engine growth model, with revenue from its new AI-integrated spatial intelligence device, Kosmo, expected to start in Q2. The company continues to secure significant orders from major clients, and Daiwa has increased its revenue forecasts for the next two years by 1% to 6%.

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Daiwa Raises Hesai Group  TP to USD36, Reiterates Buy; Switches Valuation Method to P/E