Daiwa Capital Markets: Optimistic about HORIZONROBOT-W in the mainland market, initiating a "Buy" rating
Daiwa Capital Markets initiated coverage on HORIZONROBOT-W with a "Buy" rating and a target price of HKD 7.45. It is expected that the compound annual growth rate of sales from 2025 to 2027 will be 57.5%, and it is anticipated to achieve breakeven in 2028. Horizon's ADAS chip solutions in the mainland China market are expected to capture 54% market share by 2027, benefiting from the localization of automotive chips and the penetration of the electric vehicle market
According to the Zhitong Finance APP, Daiwa Capital Markets has released a research report predicting that HORIZONROBOT-W (09660) will achieve a compound annual growth rate of 57.5% in sales from 2025 to 2027, and expects the company to reach breakeven by 2028. Daiwa has initiated coverage on the stock with a "Buy" rating, setting a target price of HKD 7.45 based on a 10.1 times enterprise value to sales ratio for 2027.
HORIZONROBOT has a unique capability in software and hardware integration in mainland China. Daiwa expects that the advanced driver-assistance systems (ADAS) chip solutions from HORIZONROBOT will capture 54% of the market share among Chinese automakers by 2027, as it fully leverages the localization advantages of automotive chips and penetrates more mass-market electric vehicles.
In response to potential U.S. chip restrictions, China aims to achieve a 25% self-sufficiency rate in domestic chips by 2025. Daiwa believes that HORIZONROBOT, with its solid customer base, understanding of local demand, and cost-effective solutions, will be a major beneficiary of the localization of automotive chips in China.
Additionally, as leading automakers like BYD (01211, 002594.SZ) push for mass-market electric vehicles priced over RMB 100,000 to be equipped with advanced intelligent driving, HORIZONROBOT's Journey solution has been deployed in over 1 million BYD vehicles and is expected to further penetrate the market priced between RMB 100,000 and 200,000, which accounts for 38.5% of the total electric vehicle volume in mainland China
