Hesai exceeded expectations in its full-year 2023 revenue, delivery volume, and comprehensive gross profit margin.
On March 12th, the leading laser radar company, Hesai Technology (HSAI:NASDAQ), released its unaudited financial data for the fourth quarter and full year of 2023.
The financial report indicates that in 2023, Hesai Technology achieved a total annual revenue of CNY 18.8 billion, representing a significant year-on-year growth of 56.1%. Specifically, the fourth-quarter revenue amounted to CNY 5.6 billion, reflecting a 37.1% year-on-year increase. In terms of product deliveries, Hesai Technology saw a substantial growth with a total of 222,116 units of laser radars delivered throughout 2023, marking a remarkable 176.1% year-on-year increase. Notably, in the fourth quarter alone, 87,736 units were delivered, signifying an 84.6% year-on-year growth.
Since 2020, Hesai has consistently achieved significant annual revenue growth, demonstrating substantial and sustained progress. With the continuous expansion of the company's scale, cost structure and operational efficiency have been effectively optimized and comprehensively enhanced. Hesai has successfully realized positive annual operating cash flow, making it the only company in the laser radar industry to achieve this milestone, showcasing exceptional commercial capabilities and operational efficiency.
Hesai Technology disclosed that in 2023, it had secured designated mass production partnerships with two top international automotive brands. Both of these renowned brands' new flagship all-electric vehicle models will be equipped with Hesai's ultra-high-definition long-range laser radars. Furthermore, its overseas Advanced Driver Assistance Systems (ADAS) business collaborations have expanded to encompass nine leading automotive manufacturers outside China, spanning North America, Europe, and Asia.
To a certain extent, overseas automakers exhibit weaker levels of intelligence compared to domestic brands, and their sales volumes are considerable. Local laser radar manufacturers are leveraging the rapid internationalization driven by new energy vehicles to effectively reduce production costs and improve operational performance.
A representative from Hesai Technology stated, "Since its establishment in 2014, Hesai has adhered to a globalized strategy. Over the past three years, nearly half of Hesai's revenue has been derived from overseas markets."
In the domestic market, Hesai Technology is accelerating its sales expansion, particularly with leading new forces and independent brand customers. For instance, the first model, MEGA, based on the all-electric platform recently launched by Li Auto, comes standard with Hesai's ultra-high-definition long-range laser radar AT128. Additionally, upgraded versions of Li Auto's L8 and L7 Pro models will also be equipped with Hesai's laser radar and have commenced deliveries in March. Furthermore, Hesai Technology has successively formed strategic partnerships with Great Wall Motors and Lixiang Automotive, with multiple new models expected to commence mass production this year.
The Chinese electric vehicle industry is currently experiencing a crucial turning point towards intelligent transformation, with Hesai positioned at the forefront of this swift revolution.
On one hand, the automotive industry is rapidly shifting towards L2/L3 intelligent driving systems, with an increasing number of automotive brands considering advanced intelligent driving functions such as urban NOA as core competitive strengths. On the other hand, consumer demands for the safety and comfort of intelligent driving features are gradually becoming more pronounced. As a necessary hardware for achieving advanced intelligent driving at present, laser radar is beginning to occupy a significant position in consumers' minds.
In line with this trend, laser radar is becoming standard equipment in more vehicle models and is starting to penetrate into mid-to-low-end vehicle models priced below CNY 200,000. On March 2nd, the new mid-sized SUV C10 under the Zero Run brand was officially launched, with its intelligent driving version also equipped with laser radar, introducing laser radar into the mass consumer market priced at around CNY 160,000.
However, as the space for in-vehicle laser radar continues to expand, there has been a recent escalation in price wars among automotive companies, with a strong demand for cost reduction of hardware. There are even rumors that a certain original equipment manufacturer (OEM) will independently develop laser radar, reducing costs to CNY 900 per unit.
"The selling price is the result of market dynamics. In the long run, the downward trend in the price of laser radar is inevitable. We expect the price of laser radar to continue decreasing annually, but it will not plummet to an extremely low level," stated a representative from Hesai Technology. The representative candidly admitted, "We anticipate that from the second half of 2024 to 2025, laser radar will officially enter the commodity stage, with leading manufacturers possibly reaching an annual delivery volume in the millions. At this stage, manufacturers will not only compete based on quality and performance but also on the company's operational status. Without a healthy financial position and sufficient research and development investment to support future technological leadership, companies will ultimately be eliminated."
As of the time of publication, Hesai Technology's stock was priced at USD 4.655 per share, with a total market value of USD 604 million.