HSAI: Accelerating Global Lidar Adoption Will Drive Multiyear Overseas Volume Expansion

Analysts have modestly raised their price target on Hesai Group to approximately $30 per share from about $29.80, citing expectations for accelerating LiDAR adoption in China in the near term and globally by 2026 to 2027 as key drivers of long term volume and earnings growth.

Analyst Commentary

Street research has highlighted both significant upside potential and emerging execution risks for Hesai Group as LiDAR adoption accelerates in China and, over time, across global markets.

Bullish Takeaways

• Bullish analysts view the recent sequence of price target increases, including moves into the mid 30 dollar range, as confirmation that the market is still underestimating Hesai's long term earnings power.
• Forecasts for LiDAR adoption ramping first in China and then globally by 2026 to 2027 support expectations of multi year revenue compounding and operating leverage, which are embedded in higher valuation multiples.
• Volume projections of several million overseas advanced driver assistance systems LiDAR units by 2030, excluding the U.S., imply a diversified revenue base that could reduce concentration risk and sustain premium growth positioning.
• Initiation of coverage with positive ratings is seen as broadening institutional awareness, which could improve liquidity and narrow any valuation discount to faster growing auto technology peers.

Bearish Takeaways

• Bearish analysts caution that current price targets already factor in a smooth global ramp in LiDAR adoption, leaving limited room for execution missteps or delays in international programs before valuation multiples compress.
• There is concern that reliance on aggressive volume targets for overseas markets by 2030 introduces forecasting risk, particularly if regulatory, geopolitical, or competitive dynamics slow adoption outside China.
• Some see increasing expectations for operating leverage as a double edged sword, noting that any cost overruns in scaling production or supporting global customers could weigh on margins and earnings quality.
• The exclusion of the U.S. from certain long term volume projections is viewed as a potential constraint on upside, with uncertainty around future access to that market limiting the scope for further multiple expansion.

What's in the News

• Issued fourth quarter 2025 revenue guidance of RMB 1,000 million to RMB 1,200 million, implying approximately 39 percent to 67 percent year over year growth (Corporate Guidance).
• Raised full year 2025 GAAP net income guidance to RMB 350 million to RMB 450 million, signaling stronger than previously expected profitability (Corporate Guidance).
• Selected by Li Auto as the exclusive lidar supplier for all models in its next generation assisted driving platform, covering the L Series, i Series, and MEGA (Client Announcement).
• Announced production of its 1,000,000th lidar unit in 2025, becoming the first lidar company globally to exceed one million units in annual production (Operating Results).
• Scheduled a November 11, 2025 board meeting to review and approve unaudited results for the three and nine months ended September 30, 2025 (Board Meeting).

Valuation Changes

• Fair Value: Unchanged at approximately $29.83 per share, indicating a stable intrinsic value assessment.
• Discount Rate: Risen slightly from 8.85 percent to about 8.85 percent, reflecting a marginal uptick in perceived risk or required return.
• Revenue Growth: Effectively unchanged at roughly 38.6 percent, suggesting no material revision to top line expansion expectations.
• Net Profit Margin: Stable at around 19.9 percent, indicating consistent assumptions on long term profitability.
• Future P/E: Fallen slightly from about 27.66x to 27.58x, implying a modest reduction in the forward valuation multiple.