China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

Equity Bottom-Up

<ul>
<li>HESAI (HSAI) reported C2Q25 top line, non-GAAP operating profit and GAAP net income in-line, 143% and 6019% vs. our estimate. </li>
<li>ADS LiDAR shipment beat our estimate by 50%, growing 276% YoY and 108% QoQ; Robotic LiDAR grew 744% YoY and (2%) QoQ, beating our estimate by 32%; </li>
<li>Despite the ASP erosion, gross margin grew 2.2ppt YoY and 0.9ppt QoQ to 42.5%, missing our estimate by 0.5ppt. We reiterate our TOP BUY and raise TP to US$35.</li>
</ul>


HESAI (HSAI) reported C2Q25 top line, non-GAAP operating profit and GAAP net income in-line, 143% and 6019% vs. our estimate. 
ADS LiDAR shipment beat our estimate by 50%, growing 276% YoY and 108% QoQ; Robotic LiDAR grew 744% YoY and (2%) QoQ, beating our estimate by 32%; 
Despite the ASP erosion, gross margin grew 2.2ppt YoY and 0.9ppt QoQ to 42.5%, missing our estimate by 0.5ppt. We reiterate our TOP BUY and raise TP to US$35.


[Hesai Group (HSAI US, BUY, TP US$35) Review]: Rapid Cost Down Continued Driving Penetration