Guosen: First coverage of CIDI (03881) with an outperform rating, leading company in autonomous mining trucks.

Guosen issued a research report stating that CIDI (03881) is a leading company in the field of intelligent driving products and solutions for commercial vehicles, benefiting continuously from the accelerating development of the Robo-X industry. The industry predicts that the company's operating income in 2025-2027 will be 10.06/18.67/35.18 billion yuan, with year-on-year growth rates of 145.3%/85.7%/88.4% respectively. It is the first coverage and has been given an outperforming market rating. Guosen's main points are as follows: Leading enterprise in the field of intelligent driving products and solutions for commercial vehicles The main business is autonomous mining trucks and logistics vehicle solutions, V2X, and intelligent sensing. CIDI is a global leading intelligent driving technology company (stock code: 03881.HK), and is an innovative supplier of product-driven solutions in the field of intelligent driving products and solutions for Chinese commercial vehicles, mainly focusing on autonomous mining trucks and logistics vehicle solutions, V2X, and intelligent sensing. In the first half of 2025, the company's operating income was 4.08 billion yuan, an increase of 57.9% year-on-year, with a net loss of 450 million yuan (compared to -120 million yuan in the first half of 2024) and an adjusted net loss of 110 million yuan (compared to -60 million yuan in the first half of 2024), with revenue sharing from autonomous driving (92.7%), V2X (2.3%), and intelligent sensing (5.0%). Intelligent driving for commercial vehicles: Accelerated commercialization of autonomous mining trucks, rapid development of V2X and intelligent sensing 1) Autonomous mining trucks: Technological advancement + the demand for operational safety in the mining industry + policy support, leading to the accelerated commercialization of autonomous mining trucks. In terms of market potential, according to the company's prospectus, the market size of China's autonomous mining truck solutions is expected to grow from 19 billion yuan in 2024 to 396 billion yuan in 2030, with a CAGR of 65.3%. According to the company's prospectus, the total potential market size of China's autonomous mining truck solution industry in 2024 (including product sales and fleet operation, assuming a penetration rate of 100%) is approximately 550 billion yuan. In terms of market share, in 2024, the company is one of China's top three autonomous mining technology companies, holding a market share of approximately 12.9% in the domestic autonomous mining truck solution market. 2) V2X and intelligent sensing: According to the company's prospectus, the market size of China's integrated vehicle-road-cloud system is expected to increase from 20 billion yuan in 2024 to 238 billion yuan in 2030, with a CAGR of 51%. The market size of China's rail transportation and commercial vehicle intelligent sensing solution is expected to increase from 13 billion yuan in 2024 to 102 billion yuan in 2030, with a CAGR of 41%. Strong research and development, excellent technology in building an autonomous driving commercial vehicle solution leading enterprise, diverse and high-quality customer base In terms of technology and research and development, the company's technological advantages include key algorithms on which products and solutions are based, algorithms and tools used for internal development testing, etc. The company's research and development staff accounted for over 50%, with core research and development members having an average of over 15 years of engineering experience. In terms of products, the company focuses on developing closed-environment autonomous mining and logistics trucks, V2X (vehicle-to-vehicle communication) technology, and intelligent sensing solutions, providing products and solutions based on proprietary technology. The company began commercializing intelligent driving technology for commercial vehicles in closed environments in 2018, making it one of the earliest companies in the industry to do so in China. In terms of customers, CIDI's main customers include mine owners and operators, government entities and universities, commercial vehicle manufacturers, and other corporate customers, with a diverse and expanding customer base of high quality. Risk warning: Risks of intelligent driving progressing slower than expected; Risks of industry policy support not meeting expectations.