Heisai's Q1 Net Profit Turns Positive, New Narrative is 'Physical AI Gold Shovel'

Hesai Technology's first-quarter revenue was 681 million yuan, with GAAP net profit of 18 million yuan and Non-GAAP net profit of 48 million yuan, all within the previously guided range.

But what really excites the market is not on the main sheet. The total shipment of LiDARs reached 472,000 units, exceeding market expectations. Among them, 118,000 units were shipped in the direction of robotics, significantly surpassing expectations. Behind this number, the demand for scenarios such as lawn mowers, Robovan, and smart transportation is accelerating.

Jefferies maintained its "gold shovels" positioning for Hesai as the "era of physical AI and 3D content" in its latest notes, maintaining a buy rating with a target price of $30, which implies about a 50% upside from the current stock price.

SGI: The Next Growth Curve Emerges

For the first time, management provided a clear revenue path for SGI (Strategic New Business) during the earnings call: starting to contribute revenue from Q2, with an expected full-year breakeven of 100 million yuan in 2026, and a target of jumping to 500 million yuan in 2027.

In 2026, the focus will be on robotic actuators, and the contribution of the Kosmo product will significantly increase in 2027. Management stated that SGI is expected to reach a "comparable scale" to the core LiDAR business in the long term and will gradually shift to a subscription-based ARR model - which means a fundamental upgrade in revenue quality.

Hesai officially announced the win of Mercedes-Benz's L3-level new model project, covering the European and Chinese markets, and not within the scope of previously existing projects - it is a purely incremental order. The Thailand factory is expected to start production and supply in early 2027, and capacity assurance has been laid out in advance.

Two Concerns: Continuous Downtrend of ASP and Mild Pressure on Gross Margin

The other side of the coin is equally clear. The average product price is about 1443 yuan, which continues to slide on a quarter-over-quarter basis, with Q2 guidance further dropping to the range of 1300-1400 yuan, mainly due to the increasing proportion of low ASP products such as robotics. The first-quarter gross margin was 39.1%, slightly down on a quarter-over-quarter basis, and the management's target for the full year is "about 40%, possibly slightly below 40%".

Jefferies analysis stated that the decline in gross margin is due to three factors: the increase in revenue proportion of ADAS products, seasonal fluctuations of high ASP products, and the high base effect of high-profit engineering income last year.

It is worth noting that Hesai's Picasso platform-based 6D full-color LiDAR has received KargoBot orders, with the ETX model expected to be mass-produced in the second half of 2026. This chip-level RGB+3D fusion technology can partially replace the function of cameras, with positive customer feedback, and is expected to be globally scaled up in 2027-2028.

China's Autonomous Driving Enters the "Chip and Cost" Race Stage

Bernstein's China autonomous driving industry research report released on the same day provided a more macro picture.

At the L2++ level, XPeng's VLA 2.0, Momenta, and Xiaomi's smart driving capabilities have significantly approached the level of human driving, with several companies planning to start L4 Robotaxi pilots in the second half of 2026. Competition in chip end is particularly fierce - Horizon is the only Chinese manufacturer that can compare with NVIDIA in the 500+ TOPS computing segment in 2026, with a differentiated cockpit and driving integrated SoC; Black Sesame's L2++ chips are beginning to be deployed; XPeng's Turing chip has shipped over 200,000 units, and Ideal and Weichai are also advancing in-house chip development.

The bottleneck for L4 Robotaxi has shifted from technology to cost and compliance. Pony.ai's goal for the unit cost in 2027 is below 230,000 yuan, and WeRide expects to reduce BOM to 150,000 yuan within five years. However, regulation remains the biggest variable - Baidu's previous incident once led to a suspension of license issuance.

In Bernstein's investment ratings, BYD, Xiaomi, and Geely are listed as "outperforming the market," and Horizon is rated "outperforming" in the semiconductor segment.