Hesai Group Achieves Revenue, Gross Profit, and EBIT for the First Time in 26Q1; Goldman Sachs Maintains Buy Rating

Overview

Goldman Sachs released a commentary on Hesai Group's Q1 2026 results, noting the company achieved revenue, in-line gross profit, and EBIT for the first time. Revenue of RMB 681 million met expectations, while the EBIT loss narrowed significantly, beating estimates by 47%, primarily driven by LiDAR shipment growth and expense control. The Buy rating is maintained with a target price of HKD 273.

Core views

Performance: Q1 2026 revenue was RMB 681 million (+30% YoY), in line with Goldman Sachs and market expectations; EBIT loss was RMB 9 million, a significant improvement from the expected loss of RMB 16 million, mainly due to operating expenses being 3% below expectations. Specifically, selling expenses were RMB 42 million, down 18% YoY, while R&D expenses were RMB 205 million, up 12% YoY. Business Drivers: Total LiDAR shipments reached 426,000 units (+11% YoY), with ADAS business shipments exceeding expectations by 8% and robotics business shipments exceeding expectations by 21%. However, the blended average selling price (ASP) was RMB 16,000, down 6% YoY, partially offsetting the volume growth. The global robotaxi market share reached 61%, with significant contributions from new orders in areas such as lawn-mowing robots. Profitability Inflection: The company has entered the harvest phase of its new-generation ATX products, with a three-year product cycle starting in 2025 driving economies of scale and operating leverage. Expected earnings growth for 2026 exceeds 100%, making the current valuation of 30x 2026 P/E attractive.

Analysis framework

Goldman Sachs employed a volume-price decomposition framework to analyze the LiDAR business, assessing revenue growth quality from two dimensions: shipment volume (dual drivers of ADAS + Robotics) and ASP (cost decline trend). The sustainability of the company's profitability improvement was verified through changes in operating expense ratios (selling expenses -18%), and the profitability acceleration inflection point was judged by combining product cycle theory (ATX three-year cycle). At the valuation level, the PE multiple method was adopted, discounting expected 2030 EPS to 2026 to reflect long-term growth value.

Methodology notes

• Valuation MethodPE/PEG valuation

  Price-to-Earnings Ratio Valuation

  Discounting 20x expected 2030 P/E to 2026, combining with 100%+ earnings growth to assess the attractiveness of the current 30x 2026 P/E

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Revenue Driver Decomposition

  Decomposing revenue growth into two factors: shipment volume (+11%) and ASP (-6%) to quantitatively analyze business growth quality

• Competition & Strategy FrameworkProduct life cycle

  Product Cycle Stage Assessment

  Identifying that ATX products have entered the harvest phase (three-year cycle starting 2025), indicating economies of scale and accelerated profitability

• Industry/Sector Analysis Framework

  Market Share Analysis

  Validating the company's leadership position in the niche sector through data showing a 61% global robotaxi market share

Key data

• Q1 RevenueRMB 681 million+30% YoY, in line with expectations
• EBIT-RMB 9 millionBeat by 47%, loss narrowed significantly
• LiDAR Shipments426,000 units+11% YoY, Robotics business +21%
• Blended ASPRMB 16,000-6% YoY, partially offsetting volume growth
• Selling ExpensesRMB 42 million-18% YoY, significant expense control
• 12-Month Target PriceHKD 273Implies 54.8% upside potential

Impact & implications

The report suggests that Hesai Group has reached a profitability inflection point, with the new product cycle driving the release of economies of scale. The popularization of NOA features in Chinese new energy vehicles (starting 2025) and design wins from overseas OEMs (mass production in 2026/2027) constitute a dual growth engine. Expansion of the robotics business into new areas such as lawn mowers opens up incremental space. The current valuation reflects 100%+ earnings growth for 2026, offering configuration value.

Risks

• Slower adoption rate of LiDAR
• Intensified industry competition
• Customer pricing pressure
• Policy risks

What to watch

• Progress in L3 collaborations with domestic and international OEMs
• Commercialization progress of LiDAR for humanoid robots
• Trends in ASP and gross margin
• Strategic updates on the self-developed chip platform Picasso