Lei Jianping January 18
Hesai Technology (HESAI) has submitted a prospectus to be listed on NASDAQ under the stock code "HSAI".
According to market rumors, Hesai Technology plans to raise $150 million, with a valuation that could reach $3 billion.
Once listed, Hesai Technology will also become the first LiDAR stock in China to list in the United States, which will also have a weather vane significance for Chinese concept stocks to list in the United States, which means that more Chinese companies will initiate listings in the United States in the future.
More than 100,000 lidar units are delivered annually
Founded in Shanghai in 2014, Hesai Technology is a global leader in autonomous driving and advanced driver assistance (ADAS) lidar.
From 2017 to December 31, 2022, Hesai completed the delivery of more than 100,000 lidars. Among them, in 2022, the cumulative delivery of Hesai's lidar exceeded 80,000 units.
Hesai CEO Li Yifan once said that delivery is the only standard for testing lidar companies, and in the same month, Hesai officially became the world's first lidar manufacturer to deliver more than 10,000 per month. And on January 7, 2023, when Hesai announced that it had obtained SAIC Skyfan's fixed point, it also said that the current monthly delivery of AT128 has exceeded 20,000 units.
Starting from 2023, lidar has entered the era of delivery in the true sense from the PPT era, and any manufacturer that cannot be delivered will eventually be eliminated by the market.
According to the prospectus, Hesai's net revenue increased by 19.4% from 348.1 million in 2019 to 415.5 million in 2020. By 2021, Hesai's net revenue further increased to 720.8 million (US$101.3 million), an increase of 73.5%.
In 2019, 2020 and 2021, Hesai's gross profit margin was 70.3%, 57.5% and 53.0%, respectively. During the nine months ended September 30, 2021 to September 30, 2022, Hesai's net revenue increased from 459.4 million to 793.5 million (US$111.5 million), a growth rate of 72.7%. For the nine months ended September 30, 2021 and the nine months ended September 30, 2022, Hesai's gross margin was 53.3% and 44%, respectively.
The decline in gross profit margin was due to the shift in its main business from autonomous driving to front-mounted production vehicles.
Before 2021, Hesai mainly sold mechanical lidar, and its gross profit margins in 2019, 2020 and 2021 were 70.3%, 57.5% and 53% respectively. Although gross margins are high, deliveries are also low. When Hesai announced the 100,000 cumulative delivery milestone, 80,000 of them were delivered in 2022, and a total of 20,000 units were delivered from 2017 to 2021. Of the 80,000 units delivered in 2022, more than 60,000 are AT128s.
Hesai's 44% gross profit margin is still higher than all listed lidar companies, and in 2022 (January-September), the gross profit margin of overseas lidar companies except Ouster is positive 30%, and the profit margin of all other companies is negative, and one loses more than the other.
According to Hesai's previous forecast, it can reach annual delivery of one million units by 2025, and the front-loading mass production business will dominate. Moreover, AT128 has just begun to be delivered, and after reaching the level of mass delivery in the next two years, the cost will fall further.
Or the most promising profitable
Hesai has invested heavily in the research and development of lidar technology. In 2019, 2020 and 2021, Hesai's R&D expenses were RMB149.8 million, RMB229.7 million and RMB368.4 million (US$51.8 million), accounting for 43.0%, 55.3% and 51.1% of net revenue for the same period, respectively.
For the nine months ended September 30, 2021 to September 30, 2022, Hesai's R&D expenses were $210.6 million and $376.4 million (US$52.9 million), representing 45.8% and 47.4% of net revenue for the same period, respectively.
This stems from Hesai's continuous investment in its core technical barriers, namely the research and development of special chips for lidar.
Although Hesai is not yet profitable, its revenue has grown very fast for several consecutive years. Taking Hesai's revenue in the first 9 months of 2022 as an example, it exceeds the combined revenue of Velodyne, Ouster, Luminar, Innoviz, Aeva, Cepton, Aeye, and Quanergy. At present, among all the lidar companies in the world, Hesai Technology is the most promising and profitable manufacturer.
Behind Hesai's high revenue and high growth is supported by sufficient orders and large enough delivery volume.
In December 2022, Hesai announced that it had achieved the milestone of cumulative delivery exceeding 100,000, and delivered 80,000 lidar units in 2022 alone, winning the global annual "sales champion". From 2023 to 2024, the ideal Max platform (L9, L8, L7) will continue to maintain stable sales, and more models equipped with Hesai lidar and volume will begin to be delivered, such as Jidu ROBO-01, Changan new model, SAIC Feifan new model, etc.
Hesai officially announced that it has obtained 10 OEM fixed points, and the outside world expects that it is only a matter of time before it makes a profit.
A plant with a capacity of one million units will be built
The reason why Hesai can become the world's first automotive lidar manufacturer to exceed 10,000 and 20,000 in a month is that the core key comes from the company's self-built factory strategy.
Since its establishment, Hesai has insisted on independent production and non-foundry LiDAR companies, because no lidar company in history has achieved large-scale vehicle-level delivery. Everyone has no manufacturing experience, and the foundry has no experience, in Li Yifan's words, "If you really want to do a good job of lidar products from the heart, manufacturing must be part of research and development."
Hesai believes that only by incorporating manufacturing into the entire product development life cycle and paying enough attention to it can we truly achieve rapid iteration of products and high technical barriers, and finally form a closed loop of R&D-design-standard-testing. Giants in the automotive industry, such as Tesla, Bosch, CATL, often adopt the method of self-built production system, rather than using the OEM model like the consumer electronics industry.
According to reports, the production capacity of Hesai's self-built factory enables it to complete the whole process from lidar product design to final delivery, not only controlling each production link from the source, but also optimizing and improving the production process in time.
At present, Hesai's self-built factory in Jiading, Shanghai has passed ISO/TS 16949 certification, and the production facility has been put into operation in August 2018, together with the transition production line, it can support the annual production capacity of 35,000 units of non-AT series lidar products, plus the production capacity of about 20,000 AT series lidar per month, ensuring and meeting the demand for large-scale and high-quality delivery. Hesai's million-unit production capacity plant is about to be built.
In the past, due to the Didi incident, the listing of Chinese concept stocks in the United States was once blocked, which reduced the confidence of overseas investors in Chinese concept stocks. Recently, with the solution of the PCAOB problem, Atour successfully went public in the United States, China liberalized the epidemic, vigorously developed the economy, and Didi resumed listing, and the confidence of overseas investors in Chinese concept stocks has warmed up.
As a hard technology company in the autonomous driving industry chain, if the issuance is successful, it means that the confidence of foreign capital in Chinese enterprises has been further enhanced.
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Lei Di was founded by Lei Jianping, a senior media person, if reprinted, please indicate the source.