Jeff Chang

Jeff Chang from Citigroup congratulated Hesai Group on its strong results and asked CEO David Li about signs of improvement in LiDAR content per car for L3 autonomous driving and his views on L3 legislation in China and Europe. He also questioned CFO Andrew Fan about the optimism behind the Q4 guidance, which projects a 50% quarter-over-quarter revenue increase and a 100% quarter-over-quarter core earnings increase.

Answer

CFO Andrew Fan addressed L3 legislation, noting China's push for higher-level autonomous driving and the trend of leading OEMs deploying multi-LiDAR vehicles in 2025, which is expected to increase LiDAR content per vehicle to 3-6 units, valued at $500-$1,000. CEO David Li elaborated on the value creation of L3/L4, arguing that the potential 10x increase in vehicle utilization justifies higher sensor costs. Fan then explained the confidence in Q4 guidance, projecting over RMB 1 billion in revenue and an additional RMB 80 million pre-tax profit compared to Q3. He clarified that excluding a one-off RMB 150 million investment gain, the normalized nine-month earnings were RMB 130 million, and adding Q4's projected profit would exceed RMB 350 million for the full year, supporting the raised guidance.

Jeff Chang congratulated Hesai Group on its strong results and asked CEO David Li about signs of improvement in "Product X" and LiDAR content per car for L3 vehicles, along with his views on L3 legislation in China and Europe. He also asked CFO Andrew Fan for insights into the confidence behind the optimistic Q4 guidance, particularly the projected 50% QoQ revenue increase and 100% QoQ core earnings growth.

Answer

CFO Andrew Fan highlighted China's push for L3 autonomous driving, emphasizing the need for safety redundancy and factory-integrated LiDAR. He noted the market's rapid adoption of multi-LiDAR vehicles by leading OEMs in 2025 (e.g., Huawei's Ito M9, Avatr 12, Zeekr 9X, Nio ES8), driving LiDAR content per vehicle to RMB 500-1000 for L3. He confirmed a flagship L3 program win with ETX and multiple FTX units. CEO David Li elaborated on the value creation shift from L2 to L3/L4, where L4 (Robotaxi) could offer 10x utilization value, justifying higher sensor costs. Andrew Fan expressed confidence in Q4 guidance, projecting over RMB 1 billion in revenue and an additional RMB 80 million pre-tax net profit compared to Q3, which, when added to normalized YTD earnings (excluding a RMB 150 million one-off investment gain), supports the full-year net income guidance of over RMB 350 million.