Citi: Initiates coverage on ROBOSENSE (02498) with a "Buy" rating, target price HK$23.3

Citi issued a research report initiating coverage on ROBOSENSE (02498) with a "Buy" rating and a target price of HK$23.3. The bank noted that ROBOSENSE is China's second-largest automotive lidar manufacturer, forming a duopoly market structure with HESAI-W (02525), excluding Huawei. The bank expects China's automotive lidar market size to grow 11-fold, with shipments increasing from 1.6 million units in 2024 to 19.2 million units in 2030. Lidar penetration rate is also expected to rise from 35% in 2026 to 59% in 2030. The combined market share of Hesai and ROBOSENSE in the China market is projected to increase from 63% in 2026 to 79% in 2030. The bank believes that ROBOSENSE is at the core of an industry inflection point, while the market has not fully reflected that L3 and L4 level Robotaxi demand for multi-sensor redundancy will further consolidate the duopoly market structure, that the narrowing gap with Hesai in profitability and cash flow as Siasun Robot&Automation business expansion contracts, and that the company can rely on its own funds to cover cash burn, avoiding equity-dilutive refinancing. Citi estimates the company's earnings per share compound annual growth rate for 2027-2029 to reach 108%. The current target price represents 0.6x 2027 forecast PEG, a 40% discount to Hesai, but the valuation discount is expected to narrow as margins and market share improve.