Hesai Group (HSAI) Secures Exclusive Li Auto Deal and Ups Guidance After Strong Earnings—Has the Bull Case Changed?

• Li Auto recently announced that Hesai Technology was selected as the exclusive lidar supplier for all next-generation models, including the "L" Series, "i" Series, and MEGA, alongside Hesai raising its full-year 2025 earnings guidance and reporting improved quarterly results with growing revenues and net income.
• This combination of a major supply deal and strong financials highlights Hesai Group's deepening industry partnerships and strengthening operational performance.
• We'll take a look at how the exclusive Li Auto supply agreement strengthens Hesai Group's investment narrative and future growth prospects.

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Hesai Group Investment Narrative Recap

Investing in Hesai Group often comes down to confidence in the global adoption of LiDAR in automotive and robotics markets, as well as the company’s ability to form and maintain strong relationships with leading OEMs. The exclusive agreement to supply Li Auto’s next-generation platforms is a significant near-term catalyst, directly addressing concerns around customer concentration, while margin pressure from competitive pricing remains the biggest risk, these recent developments meaningfully strengthen the short-term outlook, but do not eliminate margin headwinds.

Among the latest announcements, Hesai’s raised full-year 2025 earnings guidance stands out, as it reflects management’s view of improved profitability in conjunction with major client wins like Li Auto. This new guidance provides clearer visibility on near-term financial performance, more closely linking recent commercial success to forecast results than other updates in the past quarter.

However, investors should also consider the potential impact if pricing pressures persist, especially as the lidar market becomes more competitive, there’s more to this risk that...

Read the full narrative on Hesai Group (it's free!)

Hesai Group's outlook anticipates CN¥7.5 billion in revenue and CN¥1.3 billion in earnings by 2028. This scenario assumes annual revenue growth of 44.3% and an earnings increase of about CN¥1.2 billion from the current earnings of CN¥103.1 million.

Uncover how Hesai Group's forecasts yield a $29.90 fair value, a 94% upside to its current price.

Exploring Other Perspectives

Seventeen retail investors in the Simply Wall St Community see Hesai Group's fair value ranging from US$3.53 to US$55.50 per share. Alongside these diverse estimates, the risk of profit margin pressure from low-priced lidar units could influence outcomes, so explore more viewpoints on this critical issue.

Explore 17 other fair value estimates on Hesai Group - why the stock might be worth less than half the current price!

Build Your Own Hesai Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hesai Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Hesai Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hesai Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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