: Maintains a "strong buy" rating on HESAI-W (02525) with a target price of HK$249.39.

Huachuang Securities released a research report stating that HESAI-W (02525) released its first quarter report for 2026, achieving a revenue of 681 million yuan and a net profit of 18 million yuan. Combining with the growth plan of new business, the company is expected to achieve the following from 2026 to 2028: 1) revenue of 4.275, 5.669, and 7.409 billion yuan (previous values of 4.273, 5.635, and 7.186 billion yuan), a year-on-year increase of +41%, +33%, and +31%; 2) net profit of 501 million, 820 million, and 1.162 billion yuan (previous values of 510 million, 817 million, and 1.131 billion yuan), a year-on-year increase of +15%, +64%, and +42%; 3) giving the company a price-to-sales ratio of 8 times for 2026, corresponding to a target market value of 34.2 billion yuan and a target price of 249.39 Hong Kong dollars, maintaining a "strong recommendation" rating. Huachuang Securities' main points of view are as follows: Q1 LiDAR operating profit was 42 million yuan, and SGI business research and development investment increased The company achieved revenue of 681 million yuan in Q1 26, a year-on-year increase of 30%, which met expectations. The shipments of LiDAR were 470,000 units, a year-on-year increase of 1.41 times, including 350,000 units of ADAS LiDAR, a year-on-year increase of 1.42 times, and 120,000 units of Siasun Robot & Automation LiDAR, a year-on-year increase of 1.38 times. In terms of profitability, the gross profit margin in Q1 26 was 39.09%, mainly due to an increase in the contribution of products with lower profit margins; net profit was 18 million yuan, turning from loss to profit year-on-year, with the operating profit of the LiDAR business reaching 42 million yuan; management/sales expenses were 53/42 million yuan, a year-on-year decrease of -2.4%/-18%, R&D expenses were 205 million yuan, a year-on-year increase of 12%, mainly due to increased investment in strategic growth (5GI) business. The company expects to achieve revenue of 850-900 million yuan in Q2 26, an increase of 20% to 27% year-on-year. The leading position of LiDAR is stable, and the globalization strategy is accelerating According to Gesi Research Institute, in M3 26, HESAI's installed base share in China's passenger car LiDAR market reached 55%, ranking first in the industry for 14 consecutive months. In terms of globalization layout, the company announced its strategic cooperation with Me-Benz LiDAR and supplier of L3-level autonomous driving models, covering European and Chinese market models. The related products will be put into production at the "Galileo" factory in Thailand; at the same time, the company won orders for multiple overseas Xiaomi models, expected to be in production in 27; GAC Toyota's 26 platinum wisdom 3X equipped with HESAI LiDAR, marking the company's first entry into the Japanese brand system. In addition, the company announced this week that, after Mercedes-Benz, it has once again won a new top European OEM appointment, with an order size exceeding 1 million units, covering more than a dozen models of its Chinese joint venture brand. The second growth potential of Siasun Robot & Automation LiDAR continues to be released In the field of intelligent embodiment, Hesai JT128 helped Glory Lightning humanoid Siasun Robot & Automation win the world's first humanoid Siasun Robot & Automation half marathon and break the human half marathon world record. In the field of unmanned distribution, Hesai was exclusively appointed by Jiu Shi, supplying 200,000 LiDAR units, and continuing to be the largest LiDAR supplier for New Stone Age. In the field of two-wheeler travel, HESAI and Xiaoniu Electric reached a strategic cooperation, and the pure solid-state blind-spot LiDAR FTX was appointed for its new models to upgrade perception capabilities and improve riding safety. The new SGI business is expected to contribute revenue of 100 million yuan in 26 The company first divided its business into two major sectors: LiDAR and SGI business. The company expects the SGI business to start generating revenue in Q2 26, and is expected to contribute revenue of approximately 1 billion yuan in 26. The company's revolutionary spatial intelligence new product Kosmo, combines the structural perception capability of LiDAR with the rich color and texture perception capability of cameras, integrates spatial perception algorithms and AIGC algorithms, efficiently completes real-time three-dimensional scene reconstruction, and makes 3D shooting compact and portable. Kosmo has already received the first batch of orders and is expected to be officially launched in H2 26, aiming to build a new large-scale commercial system around hardware, AI software, spatial data, and platform services, potentially opening up trillion-dollar downstream market spaces in the fields of Siasun Robot & Automation simulation training, immersive media, and 4D entertainment. Risk Warning: LiDAR penetration is lower than expected, new business progress is lower than expected, geopolitical uncertainty.