Horizon Robotics - H sees sentiment recovery on deepening collaboration with a key customer; J.P. Morgan maintains Overweight.

Overview

This is a J.P. Morgan Asia technology tracker report primarily covering Horizon Robotics - H, while also incorporating Asian investor feedback on Japan’s electronic components industry. The report believes that deepening collaboration between Horizon and a key customer has driven a sentiment recovery, offsetting previous market concerns that BYD’s in-house chip development could erode its market share.

Core views

The core view is that Horizon’s customer collaboration model is flexible and sustainable, with its full-stack smart driving capabilities covering software, chips, and toolchains. Although weak downstream demand remains a short-term pressure, J.P. Morgan still expects the company’s revenue to grow 41% year on year in 2026 and 68%/76% in 2027/2028, driven by strengthened collaboration with key customers, market share expansion, and product mix optimization.

Analysis framework

The report assesses the company based on individual-stock catalysts, customer relationships, the business model for smart driving solutions, revenue growth forecasts, and investor meeting feedback. The industry section is based on feedback from discussions with investors in Hong Kong and Singapore from June 22 to 26, examining divergent market views on valuation re-rating driven by MLCCs, passive components, and AI server demand.

Methodology notes

• equity_researchrating and target price review

  Rating and target price maintenance

  The assessment of whether to maintain the Overweight rating and target price is based on share price performance, customer collaboration progress, revenue forecasts, and updates to the target price horizon.

• industry_feedbackinvestor marketing feedback

  Investor meeting feedback

  The distribution of questions raised in investor meetings in Hong Kong and Singapore is used to identify industry themes, valuation debates, and potential short-selling views attracting market attention.

Asset mapping & comparison

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

• Horizon Robotics - H

  Directly covered company

  Strengths

  Full-stack smart driving solutions capabilities; flexible customer collaboration model; deepening collaboration with a key customer; expected high revenue growth.

  Weaknesses

  Weak downstream demand poses a short-term pressure; the market had previously been concerned that customers’ in-house chip development could lead to share loss.

  Comparison

  The share price rose 15% on Monday, outperforming the Hang Seng Index’s approximately 3% gain.

  Risks

  Key customer collaboration progresses below expectations, a slowdown in smart driving demand, insufficient product mix optimization, and market share expansion falling short of expectations.

• Murata Manufacturing, TDK, Taiyo Yuden, Nichicon, Nippon Chemi-Con

  MLCC and passive component companies receiving significant investor attention

  Strengths

  Could benefit from structural demand improvement driven by AI server demand.

  Weaknesses

  Valuations of some stocks are already significantly above historical levels.

  Comparison

  Investors are divided over whether high valuations represent a new normal driven by AI server demand.

  Risks

  AI server demand falling short of expectations, valuation mean reversion, and short-term short-selling pressure.

Key data

• Horizon’s Monday share price performance+15%The report states that the gain outperformed the Hang Seng Index’s approximately +3% gain over the same period.
• 2026 revenue growth expectation+41% yoyDespite acknowledging weak downstream demand, the report maintains a relatively high growth expectation.
• 2027 revenue growth expectation+68%Growth drivers include strengthened collaboration with key customers, market share expansion, and product mix optimization.
• 2028 revenue growth expectation+76%The report expects the high-growth trajectory to continue through 2028.
• Target priceHKD10.6The target price horizon has been extended to June 2027.
• Investor meeting dates2026-06-22 to 2026-06-26The meetings took place in Hong Kong and Singapore.

Impact & implications

For Horizon, deepening collaboration with a key customer is the core support for short-term sentiment recovery and medium-term revenue growth expectations. For the Asia technology sector, AI server demand is pushing valuations of some electronic component stocks significantly above historical levels, but investors are sharply divided over whether this represents a new normal or excessive valuation.

Risks

• Weak downstream demand could weigh on the realization of Horizon’s revenue growth.
• If collaboration with the key customer fails to deepen further, concerns about market share loss could resurface.
• In-house chip development by customers such as BYD could alter the supply-chain collaboration landscape.
• With electronic component sector valuations above historical levels, a failure of AI server demand to support growth could result in valuation declines.

What to watch

• Subsequent orders, project implementation, and revenue recognition from Horizon’s collaboration with the key customer.
• Whether the 41% revenue growth expectation for 2026 is achieved.
• Whether the 68%/76% revenue growth path for 2027/2028 is validated by customer, market share, and product mix data.
• The extent to which AI server demand continues to drive the MLCC and passive component industries.
• Whether differences among Asian investors over high electronic component valuations translate into crowded trading or short-selling pressure.