Yamato is bullish on Wesai (HSAI.US), with a target price of $35.

Japan's second largest securities firm and investment bank, Daiwa Securities, has released its first coverage report on Hesai (HSAI.US), giving it a "buy" rating with a target price of $35, indicating significant upside potential from the current stock price. As of the close of the U.S. stock market on March 11th, Hesai's stock price had surged by 50.41%, closing at $24.08, demonstrating strong market confidence in its prospects. The report points out that Hesai is the third largest LiDAR manufacturer in China (in terms of delivery volume), with a projected market share of 26% in China by 2024. The company, with its self-developed ASIC architecture and noise reduction technology, continues to upgrade its LiDAR products and ranks first in global LiDAR patent applications. Daiwa Securities predicts a compound annual growth rate (CAGR) of 78% from 2024 to 2027. Daiwa Securities believes that with the continued breakthroughs in LiDAR chip technology and rapid growth in shipments, Hesai's gross profit margin is expected to improve from 2024 to 2027. This is mainly due to the expected decrease in production costs outpacing the average selling price (ASP) decrease rate. Since 2017, the company has focused on chip-based LiDAR technology, giving it cost optimization potential similar to the "Moore's Law" in the semiconductor industry. Furthermore, the company has secured orders from several mainstream automotive companies in the field of Advanced Driver Assistance Systems (ADAS), including Changan, Chery, Xiaopeng, Xiaomi, Jixie and SAIC Volkswagen, with the expected market share of Chinese ADAS LiDAR market to exceed 30% from 2025 to 2027. Daiwa Securities emphasizes that with its technological leadership and market share advantages, Hesai has long-term growth potential and is optimistic about the company's future performance.