On January 5, 2024, Suteng Juchuang, a global leader in lidar and perception solutions, officially landed on the Hong Kong Stock Exchange and successfully won the crown of "the first LiDAR stock in Hong Kong", and at the same time, it also became the "first stock in Hong Kong IPO in 2024" and "the first stock in global lidar market capitalization".
In recent years, with the rapid penetration of intelligent driving, the core sensor lidar industry has ushered in rapid development. Founded in Nanshan, Shenzhen, Suteng Juchuang, as a leading enterprise in the global lidar field, benefits from the rapid expansion of the industry, and the company's operating performance has also entered a leap period, with the company's sales volume reaching 256,000 units in 2023, topping the sales crown.
Up to now, the company's market value has reached HK$19.3 billion, making it the world's most valuable listed lidar company, even exceeding the sum of the market capitalization of the other two listed lidar companies.
Figure: Comparison of market capitalization of global LiDAR listed companies
Data source: Snowball, 36 Krypton finishing
It is worth mentioning that the cornerstone investor of the company is Nanshan Strategic Emerging Industry Investment, on the one hand, the introduction of cornerstone investors can stabilize the company's stock price performance in the secondary market in the later stage, which will help to continue to boost investor confidence, and on the other hand, it also fully reflects the strong support of the Nanshan District government of Shenzhen for the intelligent automobile industry chain.
So, standing under the tuyere, how much imagination space is there in the lidar industry? What is the potential of Suteng Juchuang, which has successfully landed in the secondary market, and can the company continue to maintain its leading position in the world with the east wind of ADAS?
ADAS injected the virus, and Suteng Juchuang won the crown of "No. 1 fixed-point model".
01 ADAS助力速腾聚创摘得销量与增速双冠
RoboSense was founded in 2014 and is headquartered in Nanshan District, Shenzhen. The company is mainly engaged in the R&D and production of lidar and perception solutions.
As a global leader in lidar and perception solutions, the company's operating income has achieved rapid expansion in recent years, showing strong growth capabilities. According to the prospectus information, from 2020 to 2023Q3, the company's main business income recorded 171 million yuan, 331 million yuan, 530 million yuan and 590 million yuan respectively, with a year-on-year growth rate of 93.7%, 60.2% and 62.0%.
Chart: Suteng Juchuang revenue performance
Data source: company prospectus, 36 krypton
In terms of business structure, the company's business mainly includes lidar hardware products, perception solutions, services and others, with products focusing on passenger car ADAS, unmanned driving, robotics and other non-automotive industries. By looking back at the business performance, we found that the high revenue growth is mainly due to the steady growth of the robot business, and the company's passenger car ADAS business has ushered in amazing growth in the past two years. From 2021 to 2023Q2, the revenue growth rate of this part of the business will be as high as 549.2%, 300.0% and 254.8%. At the same time, the rapid growth of software services has also contributed to the company's revenue expansion.
So, why can Suteng Juchuang have such a breakthrough in the field of ADAS?
From the perspective of the industry environment, with the rise of smart electric vehicles, especially the improvement of ADAS capabilities and quality in China's smart car market, consumers have stimulated their preference for high-end intelligent driving models, thereby boosting the demand for lidar configuration by OEMs and accelerating the industry from the introduction period to the growth period. As a leading enterprise, Suteng Ju has fully enjoyed the β dividends brought by the expansion of the industry.
According to Frost & Sullivan data, the penetration rate of ADAS in China is expected to reach 87.9% by 2030, and considering the comprehensive configuration needs of main radar and solid-state blind radar, it is expected that China's ADAS lidar market will expand at an average annual compound growth rate of 103% from 2021 to 2030, and the market size is expected to reach 32.5 billion US dollars.
Chart: Changes in the global LiDAR market size in the ADAS segment
Data source: Tianfeng Securities, 36 Krypton
In the context of the accelerated expansion of the industry, Suteng Juchuang has firmly grasped the opportunities of the times, has been widely recognized by mainstream car companies, and has opened a gap with competitors.
In terms of customer scale, according to the prospectus, according to the information of CIC Consulting, as of December 18, 2023, the company has established cooperative relations with more than 250 automobile OEMs and Tier 1 suppliers around the world, and has successfully obtained fixed-point orders for 62 models from 21 automobile OEMs and Tier-1 suppliers, including 24 model SOPs, becoming the LiDAR enterprise with the largest number of automotive OEMs and Tier 1 suppliers in the world, the largest number of designated models and the most SOP models.
From the perspective of customer lineup, the customer lineup of Suteng Juchuang cooperation is very luxurious, covering nine of the top ten car companies in China in terms of sales in 2022, including not only traditional large car groups such as BYD, Geely, SAIC, Chery, GAC, and BAIC, but also new power brands such as Xiaopeng and Wenjie.
It is based on the huge and luxurious customer base that Suteng Juchuang has steadily locked in the general trend of the outbreak of China's intelligent driving industry and laid the foundation for the high growth of ADAS business revenue. Especially in 2023, the volume of intelligent driving models of new energy vehicle companies such as Xiaopeng, Wenjie, SAIC Zhiji, and BYD has become the direct reason for the high increase in orders and sales of Suteng Juchuang.
Figure: Suteng Juchuang laser radar on the car of the autonomous model
Data source: 36 Krypton
In terms of specific data, from 2020 to 2023, the company's annual delivery of ADAS lidar will expand from 300 units to 240,000 units, with a CAGR of 828%. Especially since the second quarter of 2023, the company's vehicle lidar delivery volume has increased exponentially, with 21,850 units delivered in the second quarter, 53,160 units delivered in the third quarter, and 147,500 units delivered in the fourth quarter, with a quarter-on-quarter growth rate of 143% and 178% respectively, of which the monthly sales volume in December was about 71,000 units.
Figure: Suteng Juchuang LiDAR sales growth trend
Data source: company prospectus and announcement, 36 krypton
Figure: Suteng Juchuang ADAS LiDAR sales in each quarter of 2023
Data source: company prospectus and announcement, 36 krypton
Previously, S&P Standard & Poor's predicted at the 2023 Global Autonomous Driving Summit that the total sales of Suteng Juchuang in 2023 are expected to be around 22-250,000 units, with a year-on-year growth rate of 700-800%. Judging from the actual situation, such a prediction is still a little conservative, and Suteng Juchuang has become a well-deserved lidar sales champion in 2023 with a sales volume of 256,000.
Looking forward to 2024, according to the statistical forecast of professional lidar media, the total delivery of lidar in the confirmed listed models in 2024 is expected to be 827,000 units, and the expected delivery volume of potential listed models will exceed 200,000 units, that is to say, the total delivery of ADAS lidar in 2024 is expected to exceed 1 million units, which is still more than 300% upside compared with 2023.
02 Scale effect drives profit growth
From the perspective of profitability, from 2020 to 2023Q3, the company's gross profit margin was 44.1%, 42.4%, -7.4% and 6.0% respectively, on the whole, before 2021, the company's overall gross profit margin was stable at about 40%, and there was a brief decline in 2022, but in recent quarters it has shown a continuous improvement trend, with 2023H1 recovering to 3.9%, nine-month gross profit further recovering to 6.0%, and Q3 single-quarter gross profit margin recovering to 8.7%.
Chart: Suteng Juchuang's gross profit margin performance
Data source: company prospectus, 36 krypton
The reason for the temporary decline in the company's profitability in 2022 is mainly due to the fact that, on the one hand, the ADAS lidar has not yet started to be produced and cannot amortize the surging costs, and at the same time, the continuous decline in the average unit price (ASP) of ADAS products in recent years has also increased the difficulty of operating this part of the business;
However, starting in 2023, with the rapid increase in the volume of ADAS products and the easing of cost pressure caused by chip prices, the company's profitability has begun to continue to recover. As mentioned above, since the beginning of this year, the company's ADAS order volume has ushered in exponential expansion, with a cumulative sales volume of 256,000 units in 2023, far exceeding the sum of the previous three years.
Following the development trend of the manufacturing industry, when a product enters the stage of volume increase and price reduction, it means that the relevant industry officially enters the growth period from the introduction period, and with the continuous expansion of sales in the future, the scale effect of the head enterprise will gradually become prominent, and the profitability is expected to improve significantly. According to the prospectus, in October 2023, the capacity utilization rate of the Honghualing plant, which mainly supplies automotive lidar, has increased from 13.8% at the beginning of the year to 67.1%.
At the same time, since the end of 2022, the price of semiconductor chips has gradually returned to normal, and the company's average semiconductor chip procurement cost has dropped from about 2,100 yuan in 2022 to 740 yuan in the first half of 2023, and it is expected that the low stabilization of chip costs in the future is expected to drive the proportion of its raw material and consumables costs from 82% to 56%.
On the whole, the rapid volume of ADAS lidar products not only effectively resolves the uncertainty brought by the decline of product ASP to revenue, but also continues to thicken the company's future profitability with the improvement of scale effect; Against this backdrop, we expect that the company's profitability will continue to recover and its operating efficiency will be significantly improved in the future. In 2024, there is a high probability that it will get rid of the current loss and achieve a positive net profit.
03 Leading product technology and differentiated product layout to build core competitiveness
In the previous analysis, we mentioned that the scale of Suteng Juchuang's luxury in-vehicle customers is the direct reason for its ADAS revenue increase. From another point of view, this undoubtedly also represents the recognition of mainstream car companies for Suteng Juchuang.
We believe that this is mainly based on the company's rich and leading technical reserves, as well as the forward-looking and differentiated product layout built on it.
First of all, in terms of product technology, the core of the mass landing of the passenger car ADAS market lies in the balance between cost and performance. The current technical differences are mainly in the wavelength and scanning unit.
In terms of scanning, although MEMS, rotating mirrors, galvanometers, OPA, prisms, etc., seem to have a variety of technical routes, but if you turn to the perspective of scanning form, there are actually only two kinds of scanning: one-dimensional scanning and two-dimensional scanning. Compared with 1D scanning, 2D scanning uses fewer components, so it is more costly, but it is more difficult to develop. Considering the general trend of ADAS lidar cost reduction, products based on 2D scanning technology will have more competitive advantages in the future.
According to the official information of Suteng Juchuang, the M platform among its three major lidar platforms (E platform, M platform, and R platform) driven by chips is an automotive-grade lidar platform based on 2D scanning technology. The platform has been developed since 2016, and in 2017, it took the lead in launching the first automotive-grade LiDAR product, M1, and achieved mass production in June 2021.
In terms of wavelength, the mainstream 905nm near-infrared laser products in the market are relatively mature, with stable performance and low cost, but the ranging is limited to 250m@10% reflectivity. However, 1550 nm and other far-wave infrared lidar can increase the detection distance to more than 250 meters @10% reflectivity, but it has the disadvantages of difficult process and high cost.
But Suteng Juchuang may have broken this limitation. According to the latest official news, at CES 2024, the company will release the ultra-long-range lidar of the M platform, which does not use the 1550nm wavelength scheme, but the product performance will far exceed the traditional 1550nm ultra-long-range lidar products.
In addition, in recent years, the accelerated penetration of ADAS has increased the demand for functions such as automatic parking and highway navigation, but there are common blind spots in these scenarios, and if you want to achieve 360° global blind spot perception, you need to complement the semi-solid-state forward lidar and the close-range detection solid-state blind radar.
In terms of blind spot and short-distance detection products, Suteng Juchuang is also in the leading position in the industry. Its E-platform based on Flash technology is mainly for the research and development of solid-state blind radar, and the first product, E1, has been released in 2022.
Figure: Suteng Juchuang LiDAR platform
Data source: company prospectus, 36 krypton
On the whole, based on the core 2D scanning technology and chip-driven three major lidar platforms, Suteng Juchuang not only has leading technology and product capabilities in the mainstream of the market's forward-facing semi-solid products, but also has a forward-looking layout for ultra-long-distance detection products and short-distance blind filling products for future trends, and the product progress is at the forefront of the industry. It is this kind of product reliability and technical foresight that makes it recognized by the majority of OEMs.
Secondly, the differentiated product layout of the combination of software and hardware is another core competitiveness of Suteng Juchuang.
For car companies, the question of "what to use" is not the problem, but "how to use it well", and the key to the latter is the development of lidar perception algorithms and fusion perception solutions. The start-up team of Suteng Juchuang is from the background of lidar perception algorithms, and its core perception software has been developed and commercialized since the beginning of its business, with deep accumulation of technology and scenario use cases, and the solution products based on perception software account for more than 23% of Suteng Juchuang's revenue in 2022.
Figure: The product layout of Suteng Juchuang combining software and hardware
Data source: company prospectus, 36 krypton
At present, for the automotive field, the company can provide converged perception solutions for automotive ADAS based on AI software (HyperVision 2.0). At the same time, the Reference solution has also been launched to help the industry do a good job in the pre-installation development and verification of ADAS/AD perception systems. At the level of vehicle-road collaboration, Suteng Juchuang's V2X solution can achieve accurate spatio-temporal synchronization by fusing lidar point clouds of multiple base stations, forming a complete location information composition at a specific time in a specific area, and also realizing traffic flow statistics in the region.
Filed to:HyperVision
Data source: the company's official website, 36 Krypton
On the whole, Suteng Juchuang's perception software technology and diversified solution products can empower customers to accelerate the development and implementation of lidar applications in an all-round way, and form a deep and close cooperation relationship with customers.
Zhijia has entered a golden age, and Suteng has become the strongest beneficiary
In recent years, with the maturity of electrification technology, the first half of the competition of new energy vehicles in mainland China based on electrification has basically come to an end, and since the second half of 2023, the second half of the competition with intelligence as the core has officially begun.
On the consumer side, after the range anxiety has been resolved, a more intelligent user experience is becoming an important consideration for consumers to buy a car; on the car company side, in 2023, mainstream car companies are increasing the research and development of intelligent driving-related product technologies, in order to accelerate the launch of intelligent driving and seize the strategic highland of a new round of competition; on the market side, the sales of intelligent driving models increased rapidly during the year, and the price of intelligent driving models also dropped from 400,000 to 200,000 yuan, accelerating the penetration rate.
According to the S-curve of industrial development, when the penetration rate crosses the key point of 10%, the industry will enter a period of rapid expansion, and relevant participants will also usher in Davis's double-click. Taking electrification as an example, after the penetration rate of new energy vehicles in mainland China crossed the threshold of 10% in May 2021, the industry entered a period of exponential expansion, reaching 25.8% by the end of 2022 and further rising to 35.8% by the end of 2023. At the current growth rate, the original target of achieving a penetration rate of 50% in 2035 may be completed ahead of schedule in 2025-2026.
Figure: The "S" curve of smartphone penetration
Data source: Xingxingcha, 36 Krypton collation
Benefiting from the wave of electrification, a group of core suppliers represented by CATL have also ushered in a bright era. From 2019 to 2022, CATL's revenue expanded from 45.79 billion yuan to 328.59 billion yuan, with a CAGR of more than 90%, and at the same time, the company's market value also expanded from 78.6 billion yuan in the early stage of listing to 7,182 yuan in 2023, with a cumulative appreciation of more than 8 times.
Looking forward to the future, we believe that with the advent of the era of intelligent competition, benefiting from the accelerated penetration of intelligent driving, enterprises related to the industrial chain will also usher in rapid development. Among them, lidar, as the core hardware necessary for high-end intelligent driving, is expected to become the first track to benefit.
As a leading enterprise in the field of global lidar and perception solutions, Suteng Juchuang is expected to fully enjoy the resource focus brought by the 28 rule during the rapid expansion period of the industry, quickly open the gap with non-leading enterprises, strengthen the core competitive advantage, and win its own sea of stars.
The accelerated landing of the robot is expected to become the next flashpoint of Suteng Juchuang
The rapid rise of artificial intelligence has set off a new round of industrial revolution.
Humanoid robots, as the ultimate form of AI, are also ushering in rapid development. During the year, both the launch of Tesla's humanoid robot Optimus and the successful launch of UBTECH mean that embodied intelligence with humanoid robots as the carrier is expected to catalyze the next generation of AI applications.
As we all know, vision technology is an important way for robots to obtain environmental information, among which, the use of robots equipped with lidar solutions greatly improves the accuracy and safety of the rest of the environmental interaction, and effectively reduces labor costs.
At present, robots are mainly used in closed and semi-public environments, and lidar provides robots with positioning and navigation environment recognition capabilities, as well as the ability to recognize and avoid obstacles, and move intelligently. With the continuous maturity of robot technology, robots are expected to be more used in open environments in the future (smart cars have been realized), which will put forward higher requirements for the environment recognition ability of robots. With the increasing demand, it will undoubtedly drive the penetration rate of core vision sensors such as lidar in the robot market. According to the CIC report, the market size of robotic lidar solutions is expected to grow significantly from RMB 8.2 billion in 2022 to RMB 216.2 billion in 2030, with a CAGR of 50.6%.
Figure: Robot LiDAR Industry Growth Forecast Chart
Data source: CIC Consulting, 36Kr collation
Since its establishment, Suteng Juchuang has been continuously cultivating in the field of robot lidar, and currently serves nearly 2,000 first-line customers at home and abroad in robotics and other non-automotive fields, and most of them have long-term and stable cooperative relations, with a CAGR of 38.8% in the company's robot business from 2020 to 2022. Looking forward to the future, with the continuous acceleration of the commercialization progress of the robot market, with excellent software and hardware technology and customer advantages, Suteng Juchuang is expected to translate the technical advantages of the combination of lidar software and hardware accumulated in the ADAS field to the robot market, obtain a broader incremental space, and continue to improve its own capability boundary.
In the era of AI, Suteng Juchuang has a lot to offer
Looking back on the history of the development of human science and technology industry, from the steam age of industry 1.0 to the electric age of 2.0, and then to the information age of 3.0, a number of great enterprises will be born with each new round of scientific and technological revolution. Whether it is Bosch and Siemens in the era of electrification or Cisco and Intel in the information age, these giants have not only created huge wealth for society and promoted the gears of the progress of the times, but also brought countless highlight moments to themselves with the rapid change of the times.
At present, standing at the starting point of the fourth industrial revolution, we believe that compared with the information age, what has changed more is business models and connection methods, and the AI era will bring earth-shaking changes to human society at the level of production, manufacturing, and creation. It is precisely because of the ability of AI to change human society from the bottom that the value it creates will far exceed that of previous eras, and this undoubtedly brings huge potential growth space to participating companies in the AI era.
In the era of AI, smart cars, humanoid robots, quadruped robots, intelligent transportation systems, and unmanned driving ...... In this context, as the most important perception device, lidar and perception solutions are expected to be widely used in these fields, and the unlimited market space undoubtedly brings huge imagination space to related enterprises.
In the next ten years, we will be fortunate to witness the outbreak of a number of outstanding Chinese companies in the era of intelligence, becoming the greatest wealth maker of this era, and focusing on continuously expanding the boundaries of machine perception may be one of these rising superstars.