The company recently reported earnings, 3 main things that struck out to me that called a buy sign.
1) Technical wise, the company recently traded at Weekly EMA200 line. Which theoritically speaking, according to Charlie Munger. We buy stocks at a EMA100 and below, if topline remains strong, it won't go wrong. This said many still try to time the bottom.
2) They perform better than all of their peers. Even after going through the EV hype craze during 2021 till 2025. Countless of subsidiesfrom the Chinese government Hesai has managed to remain market share of 45% in the Lidar space and more importantly managed to expand globally. Comparing to its HK RoboSense, Hesai managed to hit profitability this quarter but robosense did not (GPM: 42.1% vs 15-25%). We compare operating metrics Hesai wins by a large margin even compared to US peers (Luminar, Ouster, Innoviz), on debt/equity ratio and even on profiability and balance sheet strength (Hesai: positive FCFF, the rest negative).
3) Large macro driver - Autonomous driving requirements.
Currently talk of the town is autonomous driving expansion in China, and also within factories robotic humanoid. Beijing today has yet start L3 systems which allows people to be hands-off from driving, but this said companies see huge demand for L3 lidara sensors as SAE international set the criteria of lidars required. currently research buy EV100, NGO of EV sector executives, claim that 2/3 new cars in mainland china will have L2 autonomous driving capabilities or even higher. China has implemented L2 ADAS mandatory standrd in China.
source:
https://www.techinasia.com/news/chinas-hesai-launch-lidar-level-3-selfdriving
https://finance.yahoo.com/news/china-accelerates-progress-l2-mandatory-112500011.html
https://www.scmp.com/business/china-business/article/3332536/chinas-car-industry-gears-next-level-self-driving-tech-sensor-maker-hesai
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