Target price HK$508.2! Citibank gives Momenta (06880) a "Buy" rating, bullish on three major growth drivers.

Recently, internationally renowned investment bank Citi released its latest research report, initiating coverage on MOMENTA-W (06880) with a "Buy" rating and a target price of HK$508.2, using a sum-of-the-parts (SOTP) valuation method supplemented by DCF valuation for cross-validation. Citi stated that thanks to the rapid growth of L2++/L3 penetration in China, as well as the rapid development of L4 Robotaxi and Robovan and other RoboX businesses, Momenta is expected to continue leading in market share. On the financial side, Citi forecasts that from 2026 to 2028, Momenta's total revenue will grow by 67%, 72%, and 96% year-on-year respectively, reaching RMB 4.037 billion, RMB 6.962 billion, and RMB 13.618 billion; it is expected that starting from 2028, the RoboX business will become the company's main revenue source. Citi believes that Momenta has three major growth drivers: First, the software-hardware integrated solution jointly developed by Momenta and XHEART is expected to seize the initiative in the wave of domestic substitution of intelligent driving chips. Second, the software-hardware integrated solution also has a cost advantage over peers. Third, driven by multiple policy dividends, the RoboX business is expected to help Momenta open up revenue growth space and accelerate the rise of its second growth curve. Specifically, with the rise of domestic manufacturers, the hardware market share of overseas leading manufacturers in China has declined from approximately 52% in 2025 to 33% in July 2026. It is expected that by 2030, the hardware market share of Chinese chip manufacturers will reach 75%, which will benefit models equipped with Momenta's R7 world model, while the software-hardware integrated solution jointly developed by Momenta and XHEART is expected to help the company secure more orders from OEMs globally. Citi highly recognizes Momenta's "one flywheel, two legs" strategy, data-driven approach, and mapless mode, and believes that this strategic choice supports Momenta's ability to rapidly launch in Shenzhen New Land Tool Planning & Architectural Design and international markets, achieving efficient generalization across multiple regions and scenarios. In the next five years alone, the total addressable market (TAM) for robotaxis in China will grow at a compound annual growth rate (CAGR) of 202% (2026-2030), reaching US$15 billion by 2030; it will then continue to grow at a CAGR of 35% (2030-2035), reaching US$68 billion by 2035. Based on this, Citi expects that Momenta's Robotaxi and Robovan and other RoboX businesses are expected to become the two major pillars of the company's revenue growth: Robotaxi revenue is expected to reach RMB 1.482 billion in 2028, and Robovan revenue is expected to grow from RMB 14 million in 2026 to RMB 2.868 billion in 2028. The growth of these two business segments together marks Momenta's strategic transition toward the commercialization of high-growth autonomous driving mobility services. It is expected that by 2030, RoboX business revenue is expected to reach RMB 23.5 billion.