HSAI: Global Lidar Adoption Will Drive Multiyear Overseas Volume Expansion

Analysts slightly raised their price target on Hesai Group to $36.00 from $26.30, reflecting growing confidence in accelerating LiDAR adoption and in the company's expanding overseas volume potential.

Analyst Commentary

Recent Street research highlights growing institutional interest in Hesai Group as a leveraged play on global LiDAR penetration, particularly in advanced driver assistance systems and autonomous driving applications.

Bullish Takeaways

• Bullish analysts view the higher price target as validation that Hesai is well positioned to capture accelerating LiDAR adoption in China over the next few years, supporting a premium growth multiple.
• Expectations that global LiDAR adoption will ramp meaningfully in 2026 and 2027 underpin confidence in a multi year volume and revenue growth runway beyond the domestic China market.
• Forecasts that overseas ADAS LiDAR shipments could reach around 3 million units by 2030, excluding the U.S., suggest meaningful scale benefits, margin leverage, and improved earnings visibility.
• The initiation of coverage with an Outperform style rating signals that more of the Street is beginning to underwrite Hesai's execution track record and technology leadership in their long term valuation models.

Bearish Takeaways

• Bearish analysts remain cautious that the ramp in global adoption is back end loaded, making the story sensitive to delays in regulatory approvals, OEM rollouts, or technology standardization.
• High growth expectations embedded in the new price target increase execution risk, as any shortfall in overseas volumes or ASPs could drive multiple compression.
• Dependence on rapid expansion outside China introduces geopolitical, competitive, and pricing uncertainties that could weigh on margins and justify a valuation discount versus the most optimistic scenarios.
• The absence of material contribution from the U.S. market in current long term volume estimates highlights reliance on a narrower set of geographies, which could limit upside if competitive dynamics intensify.

What's in the News

• Issued fourth quarter 2025 revenue guidance of RMB 1,000 million to RMB 1,200 million, implying approximately 39% to 67% 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).
• Produced its 1,000,000th lidar unit in 2025, becoming the first lidar company worldwide to exceed one million units in annual production (operating results announcement).
• Expanded a production agreement with a leading U.S. robotaxi company to more than USD 40 million, remaining the sole supplier for both long range and short range lidars through 2026 (client announcement).

Valuation Changes

• Fair Value: edged down slightly from $29.90 to $29.83 per share, reflecting a marginally more conservative intrinsic value estimate.
• Discount Rate: decreased modestly from 8.99% to 8.85%, suggesting a small reduction in perceived risk or cost of capital.
• Revenue Growth: eased slightly from 38.65% to 38.56%, indicating a marginally lower long term growth outlook while remaining robust.
• Net Profit Margin: declined slightly from 20.01% to 19.90%, pointing to a modest reassessment of long term profitability assumptions.
• Future P/E: dipped marginally from 27.77x to 27.66x, signaling a slightly lower valuation multiple applied to forward earnings.