While intelligent driving technology is rapidly popularizing in the terminal market, lidar has also ushered in a rapid growth trend in the vehicle market, which is especially obvious in the financial report of Suteng Juchuang.
Recently, Suteng Juchuang, the "first lidar stock" in Hong Kong, released its first financial report after listing. According to the report, in 2023, Suteng Juchuang will achieve a total revenue of 1.12 billion yuan, a year-on-year increase of 111.2%, and a gross profit of about 94 million yuan, compared with a gross loss of 39 million yuan in the same period of 2022, and the gross profit margin will also turn positive from negative 7.4% to positive 8.4% in 2023, achieving a positive change in gross profit margin. Is the spring of Suteng Juchuang coming?
Source: Straight Flush
Revenue growth but not profitability
Specifically, Suteng Juchuang's main business is divided into three categories, namely products (used in robots and others and used in ADAS), solutions, services and others.
Source: Straight Flush Data Ape Collation
As can be seen from the above table, the proportion of revenue of Suteng Juchuang products has shown a year-on-year growth trend, increasing from 76.18% in 2020 to 86.02% in 2023. Among them, the revenue of ADAS products in 2023 will reach 777 million yuan, a year-on-year increase of 384.6%. Suteng Juchuang's product sales share continues to increase in total revenue, which shows that the demand and competitiveness of its products in the market are increasing year by year.
The proportion of Suteng Juchuang's solution revenue shows a fluctuating trend as a whole, but overall, it will decline from 2020 to 2023, from 22.18% to 9.83%. The proportion of revenue in services and other parts remained relatively stable in the fluctuation, and the overall proportion was relatively small. However, from 2021 to 2023 there was an increase, rising from 5.20% to 4.15%.
In general, Suteng Juchuang's main source of revenue is product sales, and its share and competitiveness in the market are increasing year by year. The solutions segment, although its share has declined, is still an important part of the company's business. At the same time, the growth of services and other segments also provided support for the company's diversified development, which helped to reduce operational risks and improve profitability.
From the perspective of revenue composition, Suteng Juchuang ADAS products will become the main revenue force in 2023, and the same will be true in terms of sales volume. In terms of sales volume, in 2023, the sales volume of Suteng Juchuang's lidar products for ADAS applications will be about 259,600 units, of which the sales volume of vehicle-mounted lidar will be about 243,000 units, a year-on-year increase of 558.5%.
According to the data of Gasgoo Automotive Research Institute, in the LiDAR market from January to February this year, Suteng Juchuang performed well in the market, ranking first with 74,000 installed capacity and 55.3% market share, followed by Huawei Technologies with 22,000 installed capacity and 16.5% market share, Tudatong ranked third with 19,000 installed capacity and 14.2% market share, and Hesai Technology ranked fourth with 17,000 installed capacity and 12.5% market share.
However, it is worth noting that while the sales volume and revenue are growing, Suteng Juchuang is still in a loss-making state.
Source: Straight Flush
According to the financial report, compared with the profitability of Suteng Juchuang in the first three years, the net profit in 2023 will continue to decline. Under normal circumstances, the reasons for the increase in revenue and not profit increase of enterprises mainly include two key factors: cost increase and price decline, and the decline in net profit of Suteng Juchuang may be related to these factors.
First of all, from the perspective of gross profit margin, the gross profit margin of LiDAR products for ADAS applications, which is the main source of revenue, has narrowed from -101.1% in 2022 to -5.9% in 2023. Continuous improvement in gross profit margin can often be achieved by ensuring a stable supply of raw materials and consumables, as well as reducing material costs through chip development, etc. In addition, gross profit margin can be further improved by expanding production scale and yield, reducing production loss, and optimizing production structure. However, the current wave of price cuts in the automotive industry has led to a decline in the cost of the industrial chain, which in turn has put pressure on the prices of lidar manufacturers.
According to the annual report, the average unit price of Suteng Juchuang's products for ADAS applications has dropped from about 4,300 yuan per unit in 2022 to 3,200 yuan per unit in 2023. This price drop may be in response to a highly competitive market environment, but it also has a direct impact on the profitability of the business.
Secondly, in terms of cost, in 2023, Suteng Juchuang's R&D expenditure will reach 635 million yuan, an increase of 107.6% from 306 million yuan in 2022. In 2023, R&D expenses (excluding option fees) amounted to approximately $430 million, R&D-related assets amounted to approximately $80 million, and total R&D investment amounted to approximately $510 million. It is worth noting that about 30% of these investments are used for AI research and development, including algorithms, computing power and data storage, and about 22% are used for chip research and development. As of the end of 2023, Suteng Juchuang has a total of 563 R&D personnel. Among them, about 100 personnel focus on chip research and development, and nearly 150 personnel focus on AI algorithm research and development.
However, even if Suteng Juchuang is still in a loss-making state, its R&D expenses are still essential, after all, advanced products are a powerful weapon in its competitive market.
Will the new product be able to take its performance to new heights?
On January 9, Suteng Juchuang announced the launch of a high-profile new product - M3 ultra-long-range lidar at the CES 2024 conference.
Data Ape sorted out the competing products in the same industry, and found that the advantage of M3 is that it is the world's first ultra-long-range lidar that uses 940nm laser technology to achieve 300m@10% reflectance ranging capability, and has ultra-high-definition three-dimensional imaging capabilities with 0.05 ° x 0.05 ° angular resolution. In addition, M3 is the first ultra-long-range lidar of Suteng Juchuang M platform, which is built with mature 2D scanning technology and 940nm laser transceiver solution, and is the first 940nm laser transceiver solution in the industry. This shows that the M3 has a certain degree of innovation and leadership in technology.
Comparison of product parameters of some lidar manufacturers
However, from the perspective of technical solutions, M3 uses a 940nm laser transceiver scheme, while other competing products use a 1550nm laser transceiver scheme. This means that the M3 may have a disadvantage in the choice of laser wavelength compared to these competitors, because different laser wavelengths have different application scenarios and advantages and disadvantages. For example, 1550nm lidars may perform better in certain environments because they are less attenuated in the atmosphere and can provide greater ranging capabilities.
Through horizontal comparison, we can see the respective advantages of different lidar products. Hesai's AT512 has advantages in terms of detection range and processing power, while Suteng Juchuang's M3 excels in small object detection and imaging capabilities. Seyond's Sparrow W has an advantage in terms of field of view and resolution, while Luminar Iris excels in ranging capabilities and angular resolution. As for whether Suteng Juchuang's new product can make it stand out from the competition, it is still unknown.
The application of lidar technology in unmanned driving, intelligent transportation, robotics, surveying and mapping and other fields continues to expand. As technology continues to advance, the performance of lidar is improving and the cost is decreasing, which makes its application in more fields possible. Governments around the world are increasingly supporting intelligent transportation and autonomous driving technologies, and have introduced a series of policies to promote the development of related technologies. At the same time, consumers' demand for intelligence, safety and convenience is also increasing, which provides a broad market space for the development of lidar technology.
According to data from Huajing Intelligence Network, the global lidar solution market will reach 12 billion yuan in 2022, with an average annual compound growth rate of 63% in the past five years. The size of China's lidar market is about 2.64 billion yuan, showing a rapid growth trend.
Rational demand or overhype?
Although lidar technology has great potential in theory, it still faces some challenges in large-scale commercial applications, such as cost, technology maturity, and regulatory constraints. If market expectations are too optimistic and practical application progress is slow, it may lead to excessive hype about lidar technology.
According to YOLE Group statistics, as of the third quarter of 2023, 36 Chinese car companies have announced the use of lidar, and it is expected that as many as 106 models equipped with lidar will be launched in China, accounting for nearly 90% of the total number of new models equipped with lidar expected to be released in the same period in the world. Among them, NIO's first sedan ET7, Xpeng P5, and the recently launched Xiaomi SU7 use lidar in the Pro and MAX versions.
It can be seen that whether it is Suteng Juchuang or Hesai, the two companies that have landed in the capital market have shown excellent results. In addition, the two listed lidar companies also have great expectations for this year's performance, among which Suteng Juchuang has set a target of 1 million units in 2024, and Hesai Technology has given an expectation that this year's shipments will increase significantly to 600,000-700,000 units and achieve profitability by 2025. The growth of the top players, as well as the aggressive goals, is a reflection of the attitude of the entire market environment towards automotive lidar, but is this really the case?
The problem of lidar getting on the car has been controversial from 2021 to now. In November last year, Huawei and Chery jointly launched the Zhijie S7 officially launched, this car is only equipped with one lidar, the previous Huawei intelligent driving solution used three lidars. Xpeng's latest model, the F57, is positioned higher than the P7 and is expected to cancel the LiDAR as well.
At present, the pure vision route represented by Tesla has been proved in stages, after the end-to-end large model is applied to autonomous driving, only relying on the visual perception scheme + algorithm can also achieve the purpose of low cost and high efficiency, and there are already pure vision solutions in China, such as Baidu and DJI.
On the one hand, in terms of sensors, the camera itself has an absolute advantage, but I heard that Musk resolutely cut off the millimeter-wave radar, and I don't see any Tie Hanhan who dares to kick the camera directly. Even if you're a staunch proponent of lidar, the camera needs to be placed in a prominent enough position in the perception solution.
On the other hand, in the increasingly volatile situation of the automotive industry, car companies are more inclined to cost-effective intelligent driving solutions, and the high-cost vehicle lidar has become the first component to be banned in the market.
There's no doubt about the importance of cameras, but isn't lidar pointless? It's hard to say, but at least not for now.
Image source: Academy of Information and Communications Technology
First, in terms of technology, behind the pure visual route, a powerful perception algorithm is needed as support, but except for a few head players, it is difficult for most car companies that started late in intelligent driving to accumulate strength overnight, and they still need lidar as an auxiliary (or even the main perception device) in the short term.
Second, at this stage, the controversy over lidar mainly focuses on cost, and if lidar provides redundancy for pure vision within the controllable range of cost, there is still a possibility.
Third, in terms of user education, lidar, as one of the indispensable perception components of intelligent driving, has been labeled by users on the safety of intelligent driving, and lidar can still be used as a selling point to enhance product competitiveness.
Therefore, we can see that although there is a lot of controversy about vehicle lidar, car companies still do not refuse to use it, but as for the longer future, the future is not very clear. Considering the above factors, the market's pursuit of lidar technology is supported by both rational demand and a certain degree of overhype. Rational demand mainly comes from the practical application of technology, policy support and the growth of market demand. The over-hype may stem from the gap between market expectations and actual applications, as well as the high focus on lidar.
AI+ robots have become the second growth curve of lidar manufacturers
2024 is an important year for the new energy product lines of traditional car companies to move from electrification to intelligence, and it is also an important year for the major leading new car manufacturers to "roll" the coverage rate of NOA in cities. Against this backdrop, more and more cars are equipped with lidar, which seems to have become a symbol of intelligent driving.
At the same time, what we can see is that at this stage, the R&D expenditure of various lidar companies is growing rapidly. Both the head and the latter have begun to enter a stage of rapid burning of money for an uncertain future.
Suteng Juchuang mentioned in its financial report that it will accelerate the exploration of the road of "AI + robot". The combination of AI+robotics and lidar does have the potential to become the second growth curve for lidar manufacturers.
First of all, the combination of vehicle-mounted lidar and AI robots has brought new development opportunities to the field of autonomous driving, and the domestic vehicle-mounted lidar industry has ushered in an explosive period. In addition, according to GGII data, the global mobile robot market size is expected to grow from about 29.2 billion yuan in 2022 to 187.4 billion yuan in 2027, showing huge growth potential. The application of high-precision LiDAR in 3D perception of robots has also promoted the innovation of new services.
The combination of AI+robotics and lidar can not only promote the application of lidar technology in the fields of autonomous driving and service robots, but also bring significant growth potential to lidar manufacturers, so it can be considered that AI+robotics can become the second growth curve of lidar manufacturers.
So, in the face of fierce competition in the industry and changing market demand, how should lidar manufacturers stay ahead of the curve?
1. An innovative business model that integrates AI and lidar
Lidar manufacturers can explore new business models that combine AI technology. For example, by providing customized solutions, LiDAR and AI algorithms are packaged to provide one-stop services for specific industries or application scenarios. This model can help vendors better understand customer needs, provide differentiated services, and increase customer stickiness.
2. Develop a cross-domain integration platform
LiDAR manufacturers can develop an integrated platform that combines LiDAR and AI technology to provide a unified operation interface and data processing capabilities for robots in different fields. Such a platform can lower the technical barrier for robot developers, accelerate the time to market, and promote cross-industry technology integration and innovation.
3. Promote open innovation and ecosystem building
Lidar manufacturers can build a healthy ecosystem with a variety of partners through open innovation. This includes partnering with start-ups, academic institutions, industry leaders, and others to develop new technologies, share data resources, and develop industry standards. In this way, lidar manufacturers can expand their influence while promoting the health of the entire industry.
4. Focus on user experience and service design
In the application of AI + robots, user experience is crucial. Lidar manufacturers can focus on service design to ensure that their products are not only technologically advanced, but also easy to use and provide a pleasant user experience. This may involve the design of the user interface, the optimization of customer service, and ongoing user experience feedback and improvements.
5. Explore data-driven value-added services
Lidar vendors can leverage the vast amount of data collected to develop data-driven, value-added services. For example, by analyzing the environmental data collected by LiDAR, it provides value-added services such as urban planning, traffic management, and environmental monitoring. This not only brings new revenue streams for manufacturers, but also enhances their professional image in related fields.
Overall, with the advancement of technology, the opponent of LiDAR will become stronger and stronger, but by expanding other application scenarios, LiDAR still has a lot to offer.