Goldman Sachs maintains Buy on Horizon Robotics, target price cut to HK$13.14

Overview

Goldman Sachs released a company research report on Horizon Robotics, maintaining a Buy rating but lowering the 12-month target price from HK$15.30 to HK$13.14. The core of the report lies in HSD platform upgrades, the progress of Journey 6 series chips across different vehicle models and customers, and the shift in product mix toward the higher-ASP J6 platform. Despite near-term pressure in the passenger vehicle market, the report still believes product mix upgrades can help drive blended ASP and margins.

Core views

First, HSD v1.6 has been launched and V2.0 is planned for 3Q26, which is expected to improve safety, parking, and driving experience while supporting higher J6P adoption. Second, J6M/J6E/J6B have progressed in SAIC MG 4X, GAC Toyota Bozhi3X, SAIC ID.UNYX 06/07 and other vehicle models or programs, showing that the Journey 6 platform addresses varying OEM needs. Third, earnings forecasts were revised down due to lower expected revenue from the J3/J5 platform, while the 2026-30E R&D spending ratio was raised by 3 to 18 percentage points. Fourth, valuation was lowered but the Buy rating was maintained, reflecting that the medium- to long-term product upgrade thesis remains intact.

Analysis framework

The report uses company product launches, vehicle model rollouts, management information, and earnings forecast revisions as the main analytical thread, combined with a discounted EV/EBITDA valuation framework to derive the target price. Valuation starts from a 2030E EV/EBITDA multiple, then discounts it back to 2027E using an 11.5% cost of equity, and ties it to the correlation between peer EBITDA growth and traded EV/EBITDA multiples.

Methodology notes

• Valuation methodsDiscounted EV/EBITDA

  The target price is based on a discounted 2030E EV/EBITDA multiple and discounted back to 2027E.

  The report uses a 23.1x discounted 2030E EV/EBITDA multiple, derived from the correlation between peer EBITDA growth and traded EV/EBITDA multiples, and applies an 11.5% cost of equity for discounting.

• Forecast revisionEarnings forecast revision

  2026-30E earnings forecasts were revised down.

  This mainly reflects lower expected revenue from the J3/J5 platform, while the 2026-30E operating expense ratio was raised to reflect higher R&D investment driven by new product development.

• Research frameworkGS Factor Profile

  Uses growth, financial returns, valuation multiples, and composite indicators to compare stocks on a relative basis.

  The disclosure section explains that this framework uses standardized rankings and percentiles to compare key attributes of the company relative to the market and peers.

• Research toolQuantum

  Goldman Sachs proprietary database.

  The disclosure section states that Quantum is used to view financial statement history, forecasts, and ratios, and supports in-depth single-company analysis as well as cross-industry and cross-market comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 09660.HK

  Research target; Horizon Robotics Hong Kong-listed stock

  Strengths

  HSD platform upgrades, high computing power of J6P, Journey 6 series covering different price bands and functional needs, and Starry SoC extending into integrated driving and cockpit scenarios.

  Weaknesses

  Revenue expectations for the J3/J5 platform have been cut, 2026/27E still show losses, and rising R&D investment is weighing on near-term earnings.

  Comparison

  The report’s valuation references the correlation between peer EBITDA growth and traded EV/EBITDA multiples, and lowers the target multiple from the previous 28.0x to 23.1x.

  Risks

  Intensifying competition, pricing pressure in the automotive supply chain, slower-than-expected AD product mix upgrade, slower-than-expected customer expansion, and supply chain risks arising from geopolitical tensions.

• Journey 6 series chips

  Core company product upgrade theme

  Strengths

  J6P, J6M, J6E, J6B, and J6H target different OEMs and autonomous driving function levels, supporting scenarios ranging from highway NOA to urban NOA.

  Weaknesses

  Volume ramp-up still depends on the pace of vehicle model launches and end-market passenger vehicle demand.

  Comparison

  Compared with J3/J5, the J6 platform carries higher ASP and stronger expectations for product mix upgrade.

  Risks

  If product rollout or customer mass-production timing is slower than expected, revenue and margin improvement may be delayed.

Key data

• RatingBuyThe report explicitly maintains Buy.
• 12-month target priceHK$13.14The previous target price was HK$15.30.
• Price at disclosureHK$5.52The company-specific regulatory disclosure lists the price for Horizon Robotics.
• 2026/27E earnings forecastsNet loss Rmb4.5bn / Net loss Rmb80mPreviously 2026E net loss of Rmb3.7bn and 2027E net profit of Rmb2.0bn.
• 2028-30E earnings forecast revisionsCut by 27% / 15% / 15%Mainly due to lower J3/J5 revenue and higher R&D investment.
• Target valuation multiple2030E discounted EV/EBITDA 23.1xPreviously 2029E discounted EV/EBITDA 28.0x.
• Cost of equity11.5%Includes a 6.5% equity risk premium, 3.0% risk-free rate, and 1.3 beta.
• Implied EV/Sales2027E 13.3x / 2028E 7.5xPreviously 14.0x / 8.1x.
• J6P computing power560 TOPSThe report believes the enhanced HSD platform will support higher J6P adoption.

Impact & implications

The investment implication is that near-term earnings and the target price are under pressure, but the medium- to long-term thesis still revolves around the higher-ASP J6 platform, intelligent driving solution upgrades, and rollout across more vehicle models. If HSD V2.0 launches as planned and drives volume ramp-up for J6P and the broader J6 series, product mix improvement may offset pressure from passenger vehicle demand and price competition; otherwise, if customer expansion, product upgrades, or supply chain stability fall short of expectations, valuation and earnings recovery will face pressure.

Risks

• Competition intensity or pricing pressure in the automotive supply chain may be higher than expected, especially against a backdrop of weak demand.
• The product mix upgrade toward AD may be slower than expected.
• Customer base expansion may be slower than expected.
• Geopolitical tensions may lead to rising supply chain risks.
• High R&D investment may continue to weigh on short- to medium-term earnings.

What to watch

• Whether HSD V2.0 will be launched as planned in 3Q26.
• Changes in J6P adoption within high-computing-power intelligent driving platforms.
• Shipment pace of J6M/J6E/J6B in vehicle models from SAIC, GAC Toyota, and others.
• R&D and commercialization progress of J6H for urban NOA functions.
• Whether downward revisions to J3/J5 revenue continue to weigh on overall revenue.
• The impact of a higher R&D expense ratio on the pace of narrowing losses.
• Vehicle penetration and commercial contribution of Starry SoC and KaKaClaw AI agent.