Horizon's April Autonomous Driving SoC Shipments YoY +33%, China Market Share Rises to 11.2%

Overview

Deutsche Bank's latest tracking report on Horizon Robotics (9660.HK) analyzes China's April 2026 autonomous driving chip shipment data. Maintains Buy rating with HK$9.40 target. Key conclusion: Horizon shows strong growth momentum in autonomous driving SoCs (ranked #2 in China) but faces pressure in front camera chips and strategic risks from automakers' in-house chip development.

Core views

Autonomous driving SoC business shines: April 2026 shipments reached 81,986 units (YoY +33%, MoM +14%), ranking #2 in China behind Nvidia (49.8% share). Jan-Apr cumulative shipments: 232,704 units (YoY +26%), with market share rising 1.8pp to 11.2%. Growth significantly outperforms industry average (+5% YoY for China's total 603k April SoC shipments). Front camera chip business under pressure: April ADAS front camera chip shipments fell 40% YoY to 58,738 units, ranking #3 behind Mobileye (42.9%) and Renesas (28.3%). Jan-Apr cumulative shipments dropped 39% YoY to 248,589 units, with market share down 2.7pp to 11.1%. China's total front camera chip market contracted 34% YoY to 473k units. BYD's in-house chips create short-term disruption: Recent stock weakness partially attributed to BYD's May 28 launch of 'Xuanji A3' autonomous chips. BYD is Horizon's 2025 #2 client (after CARIZON JV with VW), contributing 14.58% revenue. Automaker in-house chip development is an industry trend (NIO's Shenji NX9031, XPeng's Turing AI chip, Li Auto's M100 chip) for better integration and ADAS competitive advantage.

Analysis framework

Deutsche Bank tracks high-frequency shipment data using NETimes' China monthly chip statistics. Calculates ADAS penetration by dividing SoC shipments by China's April retail sales (1.34m vehicles), deriving 45.1% penetration. Estimates L2+/L3 penetration at 40.6% based on 4.5pp gap from Jan-Mar averages. Valuation uses DCF (not multiples) given Horizon's early-growth stage. Five-year forecast period (FCF projected to 2030) with 5.5% WACC, key assumptions: 3.4% debt cost, 3.5% risk-free rate, 5.0% equity risk premium, 1.0 Beta, 15% tax rate, 41.7% equity ratio, 0.5% terminal growth. Projects profitability by 2028 with annual solutions shipments reaching 11.4m units.

Methodology notes

• Valuation methodsDCF Discounted Cash Flow

  DCF Discounted Cash Flow

  More suitable for early-growth companies where traditional multiples fail to reflect future profit potential. DCF projects future free cash flows discounted to present.

• Industry Analysis FrameworksVolume-Price Breakdown

  Volume-Price Breakdown

  Calculates ADAS penetration by dividing chip shipments by vehicle sales, providing high-frequency industry trend tracking.

• Competition & Strategy FrameworksMoat / competitive advantage

  Moat/Competitive Advantage

  Automakers' vertical integration may erode third-party chip suppliers' customer stickiness and pricing power.

• Company Fundamentals & Financial FrameworksEarnings Quality Analysis

  Earnings Quality Analysis

  Differentiates margin contributions between Licensing & Services (65%) and Product Solutions (projected to rise from 16.7% in 2024 to 47% in 2027).

Asset mapping & comparison

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

• Horizon (9660.HK)

  Coverage target, #2 in China autonomous driving SoC, #3 in front camera chips

  Strengths

  Autonomous driving SoC shipments YoY +33% outperforms industry; Licensing & Services contributes ~65% margins

  Weaknesses

  Front camera chip shipments YoY -40%; over-reliance on BYD (14.58% revenue)

  Comparison

  Autonomous SoC: trails Nvidia (49.8%), leads Huawei (9.6%) & Qualcomm (7.3%); Front camera: trails Mobileye (42.9%) & Renesas (28.3%)

  Risks

  Automaker in-house chip trend, auto industry price war margin pressure, Horizon SuperDrive adoption risks

• BYD

  Horizon's 2025 #2 client; launched competing 'Xuanji A3' chips May 28

  Comparison

  Similar in-house chip strategies as NIO (Shenji NX9031), XPeng (Turing AI), Li Auto (M100)

Key data

• April Autonomous Driving SoC Shipments81,986 unitsYoY +33%, MoM +14%, 13.6% China market share
• Jan-Apr Autonomous Driving SoC Cumulative Shipments232,704 unitsYoY +26%, 11.2% market share (+1.8pp)
• April Front Camera Chip Shipments58,738 unitsYoY -40%, 12.4% China market share (#3)
• Jan-Apr Front Camera Chip Cumulative Shipments248,589 unitsYoY -39%, 11.1% market share (-2.7pp)
• China April Autonomous Driving SoC Penetration45.1%YoY +10.2pp, MoM +1.6pp
• Estimated L2+/L3 Penetration40.6%YoY +19.4pp, MoM +3.5pp
• BYD Revenue Contribution14.58%2025 #2 client
• DCF Key ParametersWACC 5.5%Forecast to 2030, projects 2028 profitability

Impact & implications

Horizon maintains strong competitiveness in autonomous driving SoCs but faces dual pressures in front camera chips from industry contraction and competition. BYD's in-house chips pose mid-long term strategic risks. Product Solutions margin contribution projected to rise from 16.7% (2024) to 47% (2027), reflecting higher-value business transition.

Risks

• Aggressive auto industry price wars pressuring margins beyond expectations
• Weaker-than-expected adoption of Horizon SuperDrive solutions
• Core clients like BYD advancing in-house chips may reduce external supplier reliance

What to watch

• China autonomous driving SoC monthly shipments & market share changes
• Automaker in-house chip progress & substitution pace
• L2+/L3 advanced ADAS penetration acceleration
• Product Solutions margin contribution growth