CITIC SEC: Advanced intelligent driving accelerates penetration, hardware industry chain benefits deeply.

CITIC SEC has released a research report stating that with the unexpected penetration of BYD Company Limited's advanced driver assistance systems, the sales of high-speed NOA vehicle models of BYD Company Limited are estimated to reach nearly 3 million units by 2025, with urban NOA vehicle sales reaching 460,000 units, corresponding to penetration rates of 60% and 9% respectively. The total sales of advanced intelligent driving vehicle models are expected to reach 3.46 million units, with a penetration rate of 69%, a significant increase from 7.2% in 2024. In addition, BYD Company Limited's intelligent driving strategy is expected to accelerate the application of intelligent driving by other domestic car manufacturers. Regarding the hardware supply chain, from entry-level driver assistance to advanced intelligent driving, the core increment lies in main chips/domain control, cameras, LiDAR, connectors, etc., suggesting attention to relevant listed companies. Main points from CITIC SEC: BYD Company Limited's intelligent driving configuration: Tian Shen Zhi Yan technology matrix, intelligent driving models sinking below 100,000 yuan. According to the BYD Company Limited Intelligentization Strategy Conference on February 10, 2025, the technology matrix of high-level intelligent driving assistance systems includes: 1) Tian Shen Zhi Yan A, equipped with three LiDARs, DiPilot600, currently mainly branded as Yingwang, can achieve urban NOA; 2) Tian Shen Zhi Yan B, equipped with LiDAR, DiPilot300, currently mainly branded as Tengshi, BYD Company Limited, can achieve urban NOA; 3) Tian Shen Zhi Yan C, equipped with a high-definition three-camera, DiPilot100, currently mainly branded as BYD Company Limited, can achieve high-speed NOA. Overall, BYD Company Limited's vehicles priced above 100,000 yuan will be equipped with the Tian Shen Zhi Yan system across the board, while the Qin PLUS DM-i, Sea Lion 05 DM-i, Seagull and other models priced below 100,000 yuan will mostly feature Tian Shen Zhi Yan. According to AutoHome data, these three models do not feature advanced intelligent driving in the base model, but the middle and high-end versions are equipped with Tian Shen Zhi Yan C, bringing the advanced intelligent driving models down to 78,800 yuan (Seagull Freedom version), making good technology accessible to everyone. From the perspective of the upstream hardware supply chain, it is recommended to pay attention to main chips/domain control, cameras, LiDAR, connectors, and other aspects that have increment logic. 1) Main chips/domain control. According to BYD Company Limited's intelligent driving configuration, Tian Shen Zhi Yan A uses dual NVIDIA Orin-X chips, Tian Shen Zhi Yan B uses a single NVIDIA Orin-X chip, and Tian Shen Zhi Yan C uses NVIDIA Orin-N chips or Horizon J series chips. 2) CIS for cameras. According to BYD Company Limited's intelligent driving configuration, the Tian Shen Zhi Yan A/B/C intelligent driving solutions all use 12 camera configurations, including 2-3 ADAS front-view cameras (8M specifications), 4 surround cameras, 4 side-view cameras, and 1 rear-view camera, all with 3M specifications. According to estimates, the demand for cameras from BYD Company Limited in 2024/2025 is approximately 10/50 million units, showing a significant growth. 3) Lenses/modules for cameras. The number of lenses and modules corresponds to the number of CIS cameras, with growth logic as mentioned above. 4) LiDAR. According to BYD Company Limited's intelligent driving configuration, Tian Shen Zhi Yan A has 3 LiDARs, Tian Shen Zhi Yan B has 1 LiDAR, and Tian Shen Zhi Yan C uses a pure vision scheme, with an estimated demand of approximately 80,000-450,000 units for LiDAR from BYD Company Limited in 2024-2025, showing a significant increment. 5) Connectors and others. In the process of upgrading automotive intelligence, the demand for onboard sensors such as ultrasonic radar, millimeter-wave radar, cameras, LiDAR, etc., has significantly increased, and stable signal transmission between sensors and systems requires high-frequency, high-speed connectors. Investment strategy: Edge AI is the core investment theme in 2025, with the automotive intelligence upgrade centered around BYD Company Limited as an important direction. From entry-level driver assistance to advanced intelligent driving, the core increment on the hardware side lies in main chips/domain control, cameras, LiDAR, connectors etc. In terms of different sectors, First-tier: Upstream chips and related components that have potential supply-demand tightness leading to price fluctuations, with long-term product upgrade logic. Second-tier: Components with volume increment logic, such as lens modules and LiDAR with relatively concentrated supply. Third-tier: Components with volume increment logic and potential market share improvement, such as connectors. Fourth-tier: Components such as transportation International parts, PCBs, etc. Risk factors: Lower-than-expected domestic car sales, lower-than-expected penetration of high-level intelligent driving, lower-than-expected technological iteration, increased market competition, lower-than-expected supply chain cost reduction, etc.