The Zhitong Finance App learned that Xiniu Securities released a research report stating that the target price was raised to HK$32.16 per share in view of i) explosive growth in shipment volume, ii) continuous improvement in gross margin, iii) operational efficiency being optimized, and iv) the revaluation of China-related shares. In the third quarter of 2024, Sagiteng Juchuang achieved total revenue of RMB 0.41 billion, of which RMB 0.38 billion came from lidar sales. Quarterly gross margin increased further to 17.5%, rising for three consecutive quarters.

The lidar market is growing rapidly, and the penetration rate of applications in ADAS and robots continues to rise. Acquiring customers and strengthening customer stickiness is currently the main task of market participants. In addition, the trip is likely to see more contributions from autonomous driving and overseas customers in 2026, and see related targeted projects next year. Furthermore, the Group successfully showcased the research results of 8-degree of freedom dexterous workers at the China International Hi-Tech Fair, strengthening its position as a robotics platform company.

The main views of Xiniu Securities are as follows:

The growth in sales volume of lidar used in ADAS is predictable:

Sagiteng Juchuang's lidar sales volume reached 131,400 units in the third quarter, and sales volume of lidar used in ADAS increased by 87.1% year-on-year. MX products aim to penetrate the 0.15 million-0.2 million yuan automobile market, including BYD's SEAL and Han, GAC AION's AIONV and AIONRT, Geely Galaxy, and Jikrypton. The product has received targeted cooperation from 7 automakers.

MX products will drive the Group's future sales volume and gradually replace M1P products. It is estimated that the sales volume of this product will account for nearly 30% to 40% of the Group's total sales volume in 2025. At the same time, the Group has also made ideal progress in the field of advanced autonomous driving. The Group has obtained SOP fixed-point cooperation with leading L4+ autonomous driving companies such as My Little Pony Zhixing, which is an important step for the Group in the autonomous driving travel business. The rapid expansion of the autonomous mobility market will bring huge market space to the Group, and the bank will begin to see relevant revenue contributions in the fourth quarter of next year.

Sales of lidar for robotics will explode:

Sagitengjuchuang achieved sales volume of around 7,200 lidars used in robots in the third quarter, and the Helios and bPearl series remain the main source of revenue. Overseas demand remains strong and is expected to further stimulate sales volume in 2025. The bank expects sales volume to grow 2 to 3 times year-on-year in 2025, or even reach the level of 100,000.

Continuously improving gross profit margin:

The Group's gross margin increased further to 17.5% in the third quarter, with excellent performance. Among them, the gross margins of lidar used in ADAS and robotics reached 14.1% and 34.6%, respectively. The increase in gross margin benefited from i) the continued expansion of the scale effect and ii) the reduction in procurement costs, which were better than anticipated. Thanks to i) the increase in the penetration rate of MX products and E platforms, ii) the increase in revenue from the autonomous driving mobility business, and iii) the expansion of scale effects, the bank believes that the Group's gross profit level will continue to improve in the future.