BYD Company Limited officially announced "the eye of heaven", driving a huge explosion in the laser radar industry. Bank of America Corp recommends a buy rating for Hesai Group Sponsored ADR (HSAI.US).

Bank of America Corp's global research department released its latest research report, stating that the global leader in LiDAR, Hesai (HSAI.US), is set for a strong start in 2025. Currently, Hesai is at a crucial stage of industry explosion, and with the continuous decrease in the cost of LiDAR and gradual increase in market demand, Hesai is expected to achieve sustained profit growth in the coming years. Based on this, Bank of America Corp strongly recommends a "buy" rating and significantly raises its target price to $21.5. Bank of America Corp stated that as a leader in the global LiDAR industry, Hesai's latest compact ultra-high-definition long-range LiDAR ATX is priced at only $200, a 50% decrease from the price of the AT128 product. This price drop is due to the company's independently developed chip technology and expanded production scale. With the lower cost of LiDAR, its application market is expanding from high-end models (priced over 300,000 RMB) to mid-to-low-end models (priced under 200,000 RMB). Bank of America Corp predicts that LiDAR and intelligent driving systems will gradually become standard features in high-end and mass-market vehicle models. On February 10, 2025, BYD Company Limited announced its intelligent driving strategy, stating that the "Heavenly Eye" system will become a standard configuration for vehicles priced over 10,000 RMB, with some models priced below 10,000 RMB also equipped. This move is expected to change consumers' perception of intelligent driving and put pressure on other auto manufacturers that have not yet entered the intelligent driving industry, thereby accelerating the development of related industry chain enterprises represented by Hesai. In addition to the automotive market, the demand for LiDAR in fields such as Siasun Robot&Automation (including distribution Siasun Robot&Automation, cleaning Siasun Robot&Automation, robot dogs, etc.), industry, mapping, aviation inspection, environmental survey, and security systems (building, store surveillance) is also growing. Recently, Hesai Group Sponsored ADR launched the JT series LiDAR and established new departments to explore more potential customers. Bank of America Corp believes that non-automotive applications will bring long-term growth potential to the LiDAR market. Bank of America Corp expects that Hesai's revenue in the fourth quarter of 2024 will reach 718 million RMB, a year-on-year increase of 28% and a quarter-on-quarter increase of 33%. The annual gross profit margin is expected to be 43.2%. In 2025, Hesai's main customers will still include Li Auto, Inc. Sponsored ADR Class A and Xiaomi, while BYD Company Limited, Geely, Changan, Lixiang, and Great Wall Motor, among others, will also bring significant order flow to Hesai in 2025. Based on discounted cash flow (DCF) and 4.0 times enterprise value/sales (EV/Sales) valuation, Bank of America Corp has significantly raised the target price of Hesai Group Sponsored ADR to $21.5 and recommended a "buy" rating. Bank of America Corp predicts that from 2024 to 2030, the shipment volume of LiDAR in China will grow at a compound annual growth rate (CAGR) of 45%, increasing from 1.5 million units to 13.8 million units. With the popularization of new energy vehicles, the penetration rate of LiDAR is expected to increase from 6% in 2023 to 13% in 2024, and reach 60% in 2030. It is reported that in December 2024, Hesai became the world's first LiDAR company to deliver over 100,000 units in a single month. In 2025, Hesai's LiDAR plans to have an annual production capacity of over 2 million units, with the Hesai ATX serving as an important product in the mass production field, achieving full volume production in 2025.