Hesai Group

Hello, ladies and gentlemen. Thank you for standing by for Heisei's group first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Please note that today's conference call is being recorded. I would now like to turn the call over to our first speaker today, Wan-Ting Shi, the company's investor relations director. Please go ahead.

Thank you, Alfredo. Hello, everyone, and thank you for joining Closet Tech Group's first quarter 2023 earnings conference call. Our earnings release is now available on our IR website, investor.closettech.com, as well as our Newswire services. Today, you will hear from our CEO, Dr. Deva Lee, who will start the call with an overview of our recent updates. Next, our global CFO, Mr. Louis Tsai, will address our financial results before we open the call for questions. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Please also note that the company will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported on the GAAP in our earnings release and SEC filings. With that, I'm pleased to turn over the call to our CEO, Dr. David Lee. David, please go ahead.

Thank you, Yuanqing, and thank you everyone for joining our call today. Let's start with the big picture. We're pleased to deliver the strongest quarterly financial performance in our history. In the first quarter, our net revenues were up 73% year-over-year to a new record high, and our industry-leading growth margins increased quarter-over-quarter to 38%, up from 30% last quarter. Exchange-wise, including share-based compensation, R&D remains steady as our product lines and organizational structure are approaching maturity. As a result, And most excitingly, we achieved non-gap profitability and a positive operating cash flow in the first quarter, demonstrating our tremendous future profitability prospects. No validation is more encouraging than the recognition from our customers. Having delivered more than 135,000 LiDAR units to date, Hussite has become the most commercially successful LiDAR manufacturer in terms of shipment in both RoboTaxi and the ADAS market. We stand out from others for two reasons. First, our proven automotive-grade product quality builds upon our methodology of having in-house manufacturing as a crucial part of the R&D to enable rapid iteration of our product. And second, in addition to taking advantage of economics of scale, we have committed to continued innovation on our proprietary ASIC platform, allowing more affordable solutions via highly integrated components. Since 2017, We've gone through four generations of our proprietary ASIC development with contributions from more than 150 dedicated semiconductor staff. We're proud to be uniquely positioned to offer LiDAR solutions with the best combination of high performance, high quality, and affordability. Now I'd like to share some exciting first quarter business updates. We're thrilled to have the privilege of collaborating with 11 pioneering OEMs in the industry on multi-year ADAS contracts, including LiAuto, a leading Chinese EV maker, as well as another top-selling EV maker in China. We're also working with a leading consumer electronics maker in China on their planned EV debut, and two of the largest automakers in China, including Taiwan, and many other leading auto OEMs. In the first quarter, We continue to gain momentum in sending more contracts in the domestic market. We were selected by LiAuto for its new fully battery electric vehicle platform, and by Jidoo, a joint venture between Baidu and Geely Group for its new EV model. We also initiated a partnership with a new customer series, a leading EV maker in China, whose new car models will be shipped with our AT128 LiDAR. As the China EV market is growing exponentially, will be shipping to six OEMs by end of 2023 and 11 by end of 2024. But that has a global vision since its inception. With our proven ability to ship large volume of high-quality data sensors, we already advanced in eight RFI and RFQs with five leading global OEMs who are expecting a new round of sourcing decisions to materialize in the next coming 12 months. In the autonomous mobility market, we continue to lead as the best-in-class player. We recently signed the largest robo-taxi contract in our company's history. According to an independent third-party report, we are the primary LIDAR provider for 12 out of the world's top 15 autonomous driving companies with nearly 60% global market share. Next, we're dedicated to in-house manufacturing as we see this as the only way to meet automotive grade standards at this early stage of development in the ADAS market. During the first quarter, we completed the first successful production sample from our Hertz Center, a dedicated manufacturing center in Hangzhou, which takes automation to the next level. Featuring over 90% automation, Hertz produces one LiDAR every 45 seconds. With an optimized design, the AT series produced at Hertz would improve our ADAS growth margin as it reaches the economy of scale in manufacturing and utilization. Additionally, our Advanced R&D and Intelligent Manufacturing Center in Shanghai Maxwell is a true innovation center for new products to be designed, tested, calibrated under one roof before they are handed over to mass production. Its construction is scheduled to be completed in Q3 of this year. Leveraging the development of our latest ASIC Gen 4.0, we're able to continue releasing state-of-the-art products that meet the ever-increasing needs of both performance and design aesthetics while keeping them affordable. ED25, a groundbreaking in-cabinet LiDAR featuring an extremely thin profile of only 25mm in height with extended range and enhanced resolution, was recently released at the Shanghai Auto Show. ED25's revolutionary concept is attracting interest from OEMs globally who are demanding extremely miniaturized LIDARs behind windshields to achieve both an aesthetically pleasing exterior vehicle design and optimal air dynamics. To conquer the great challenges of putting LIDARs behind the windshields, we teamed up with the global automotive glass leader, Fuyao Group, to create a specialized windshield to enhance the laser transmittance efficiency by up to 3x. Finally, before I hand it over to Louis for a deeper look at the financial numbers, I wanted to congratulate the whole team from operations to product innovation on an exceptional quarter. With non-gap profitability and a positive operating cash flow in the first quarter, we showcased our potential for continued growth momentum. We remain confident in our ability to seize development opportunities in both data and AM markets, bringing a higher level of safety to the future of intelligence driving systems. Now, I'll turn over the call to Lewis to share more details on our financial performance and outlook.