Goldman Sachs lowers Hesai's target price to 265 yuan, reiterates "Buy" rating

Goldman Sachs published a research report indicating that Hesai (02525.HK) exceeded expectations in its third-quarter performance; however, the company generally maintained its guidance for this year and next. The company mentioned that next year's revenue is expected to record double-digit growth. The bank believes that the range of guidance is too broad, and if the final growth rate falls at the lower end of the double digits (10% to 20%), it may disappoint the market.

The bank noted that competition for Hesai is becoming increasingly fierce and lowered its non-GAAP earnings per share forecast for next year by 8%. Additionally, the bank expects that next year, Xiaomi, Leapmotor, Li Auto, and BYD will account for 29%, 26%, 21%, and 12% of Hesai's sales of advanced driver-assistance systems (ADAS) LiDAR. The bank continues to expect that the average selling price of Hesai's main ATX products will decline by 10% year-on-year.

The bank anticipates that Hesai's sales will grow by 90% next year, with a revenue growth rate of 43%. Coupled with stable gross margins and ongoing operational leverage, this will drive net profit growth of 80%. The bank raised its non-GAAP net income forecast for the company this year by 16%, but lowered its forecasts for 2026 to 2030 by 4% to 9% to reflect the impact of increased competition leading to a decline in average prices. The bank maintains a "Buy" rating for the company and lowered the target price by 6%, with target prices for H shares and US stocks (HSAI.US) set at HKD 265 and USD 34, respectively