Huaxing Securities: Reiterates "Buy" rating on HORIZONROBOT-W (09660), target price HK$5.80

Huaxing Securities released a research report reiterating its "Buy" rating on HORIZONROBOT-W (09660) and a target price of HK$5.80. The bank noted that the company's market share in intelligent driving chip solutions continues to rise, its leading position remains solid, and it is accelerating domestic substitution of NVIDIA, while HSD software continues to iterate and improve performance. The main points of Huaxing Securities are as follows: Overseas business exceeds expectations, intelligent driving chip market share continues to rise According to the introduction by Horizon's investor relations head at the exchange meeting, Horizon Siasun Robot&Automation has now become the largest intelligent driving chip supplier for overseas-bound models in China, and the top six domestic automakers by overseas sales are all its customers. As of now, the company's covered overseas-bound models have reached 60 to 70, covering multiple large automakers including BYD Company Limited, Geely, and SAIC. In the first half of 2026, Horizon Siasun Robot&Automation's market share in intelligent driving chip solutions for self-owned brand passenger vehicles exceeded 50% for the first time, continuing to maintain the market's top position, with market share twice that of the second place. In the urban NOA market, which has the highest value and strongest growth momentum, the company currently ranks second, behind only NVIDIA, with a market share of about 23%, up 6-7 percentage points from last year. Among the top ten best-selling models in China in August, apart from Tesla, Leapmotor, and Xiaomi, traditional self-owned brands basically all adopted Horizon Journey series chips. Accelerating penetration into BYD Company Limited, HSD software iterates rapidly According to the introduction by Horizon's investor relations head, Horizon Siasun Robot&Automation's shipments for BYD Company Limited's God's Eye C have rebounded to 800,000-1,000,000 units per month and continue to grow; the first model equipped with Horizon chips for God's Eye B will also be launched in November, indicating that the company is accelerating penetration into multiple BYD Company Limited models, aiming to complete domestic substitution. The company's top three customers by chip shipment volume are BYD Company Limited, Geely, and Changan, while its top two customers by revenue are BYD Company Limited and Volkswagen. In the first half of 2026, HSD shipments were 40,000-50,000 sets, and the intensive launch of new models in the second half is expected to rapidly increase shipments, but full-year sales are still short of the 300,000-set expectation at the beginning of the year. In terms of software iteration, the company updated HSD software to version 2.0 in July, and will soon push version 2.1 via OTA, adding full-scenario driver assistance escape capability. In practice, HSD's MPI (Miles Per Intervention) improved from once every few dozen kilometers last year to once every hundred-plus kilometers in HSD 2.0, and the company's goal is to reach a level of intervention once every few hundred kilometers. A higher proportion of high-end chips next year is expected to significantly improve unit price Horizon Siasun Robot&Automation estimates that the overall chip unit price in 2026 will be US$40-50, of which low-end chips are US$20-30, mid-range chips exceed US$90, and high-end chips are about US$500. As the proportion of mid- and high-end chips increases in 2027, the average selling price is expected to reach more than US$90-100, doubling year over year. Horizon's next-generation Journey 7 chip has nearly 2,000 TOPS of computing power, is expected to be released in the second half of 2027, and will begin contributing revenue from 2028.