Hesai Group

Hello, ladies and gentlemen. Thank you for standing by and welcome to the Hair Sales Group fourth quarter and full year 2024 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 will now turn the call over to our first speaker today, Yanting Shi, the company's head of capital markets. Please go ahead.

Thank you, operator. Hello, everyone. Thank you for joining He Sai Group's fourth quarter in a four-year 2024 earnings conference call. Our earnings release is now available on our IR website at investor.hesaitech.com, as well as via Newswire Services. Today, you will hear from our CEO, Dr. David Lee, who will provide an overview of our recent updates. Next, our CFO, Mr. Andrew Fan, will address our financial results before we open the call for questions. Before we continue, I refer you to the safe harbor statement in our earnings press release, which applies to this call, as well as big forward-looking statements. Please also note that the company will discuss non-GAAP measures today, which are most thoroughly explained and reconciled to the most compatible GAAP measures 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, Yuanjing, and thank you, everyone, for joining our call today. Let's start with a look back at the exciting journey we've had throughout 2024. 2024 was a transformational and a breakout year for Hosea, with lighter shipments and net revenues hitting record highs. Driven by accelerating LiDAR adoption in the ADAS and robotic sectors, we solidified our industry leadership and shipped over 500,000 LiDAR units in 2024, achieving an impressive growth rate of more than doubling each year for four consecutive years. Facing the rising tide of LiDAR soaring demand and leveraging our unmatched vertical integration capabilities and economics of scale, we delivered the strongest financial performance in the global LiDAR industry with the highest net revenues and blended growth margins. Most notably, we made history as the world's first LiDAR company to achieve full-year non-gap net profits or while further strengthening our unmatched financial leadership with solid positive operating and net cash flows, making us the only company of our kind in the industry. Building on this momentum, we would love to share our three accepted goals for 2025. First, We are projecting 1.2 to 1.5 million LIDAR shipments, with nearly 200,000 of those being high margin robotic LIDAR units. Second, we aim to achieve net revenues of 3 to 3.5 billion RMB. And third, we expect to achieve gap profitability of 200 to 350 million RMB. This marks a significant leap from non-gap break-even in 2024, solidifying our trajectory towards long-term success. Now, let's zoom out and look at the bigger picture. China is leading the charge in electrification, with EV making up nearly 50% of the passenger vehicle market in 2024. As EVs become the new norm, the battlefield is shifting to ADAS and vehicle intelligence. critical areas where OEMs are seriously racing to set themselves apart. According to Goldman Sachs, ADAS is poised for explosive growth, with market penetration expected to skyrocket from just 8% in 2023 to a staggering 70% by 2030 in China. This trajectory mirrors adoption curves of smartphones from 2008 to 2015 and EVs from 2019 to 2026. signaling a transformative decade ahead. The long-term macro trends are directly reflected in the bold actions of OEMs in China. In 2025, our key customers, such as BYD, Chang'an, and Leaf Motor, are ramping up their strategic upgrades, driving the push to make intelligent driving mainstream. ADAS is more affordable and accessible than ever. Even more revolutionary is their universal intelligent driving strategy, which integrates cutting-edge ADAS across the new vehicle lineups, also shattering price barriers. With lighter-equipped models now entering the 100,000 RMD range, advanced driving technology is within reach for a wider audience. We're thrilled to witness the democratization of intelligent driving technology and excited for what's ahead. And ADAS becomes ubiquitous, so does the demand for enhanced perception and safety, driving the rapid rise of LiDAR adoption. Fueled by the growing acceleration of ADAS and autonomous driving, along with mass market adoption, LiDAR integration in EVs in China is set to surge from just 8% in 2023 to 20% in 2025, and then to an impressive 56% by 2030, according to Goldman Sachs estimates. The future of driving is here, and LiDAR is at the forefront of this revolution. The surge in LiDAR adoption is a testament to our long-held belief in LiDAR's three core values, making cars safer, smarter, and more desirable than ever. First and foremost, LiDAR is becoming as essential as seatbelts, propelling LiDAR into the mainstream. Camera-only systems have been linked to crashes with stationary emergency vehicles and unexpected road hazards, as reported by the Wall Street Journal in 2024. In contrast, LiDAR outperformed cameras by cutting through glare and darkness while accurately detecting irregular small objects and other polar cases with outmatched 3D clarity and perceptions. Research shows that integrating LiDAR into a vehicle can reduce severe accidents by up to 20% and improve overall crash avoidance by up to 9%. As reported by LiAuto last quarter, their active safety features have prevented over 3 billion potential accidents, including 516 severe accidents. In the race toward higher levels of autonomous driving, while safety is paramount, LIDARs aren't just a knife to have. They are a game changer, actively protecting you and your loved ones on the road. Second, LIDARs do more than just keeping you safe. They supercharge advanced driving features like urban NOA, chassis turning, and automated parking. In urban NOA, nearly 100% of the models use LIDAR for precise perception, enabling smooth lane changes and obstacle avoidance in complex environments. For shafty tuning, LIDAR scans the road in real time, detecting conditions up to 150 meters ahead, including speed bumps and potholes. It then adjusts the suspension for better battery efficiency and ride comfort. In automated parking, LIDAR accurately maps the space and detects obstacles, offering robust performance in low-light conditions and ensuring precise space parking, even in the tightest spots And our client recently said, true high-level intelligent driving starts with LiDAR. Finally, LiDARs are more than just a technical advancement. They are a statement of style and sophistication. Cars with LiDARs are seen as premium, cutting-edge, and safer. That's why Chinese carmakers are positioning LiDARs in front and center, showcasing as a badge of innovation. A perfect example is Great Motors' Wei Lanshan, one of China's largest shippers, which launched in August of 2024 with our AT128 LiDARs as a standard. The result? A sales explosion. By December 2024, monthly sales surpassed 8,000 units, three times the sales of the previous model that didn't feature LiDAR. These core benefits are driving LiDAR into the spotlight, earning recognition from both OEMs and consumers alike. We are committed to lowering the barrier to LiDAR adoption and driving technological equality. ATS LiDAR, our category-defining product, delivers unbeatable cost-performance priced at just $200. Equipping vehicle models starting as low as 100k RMB It offers OEMs a budget-friendly LiDAR solution designed to drive widespread adoption. With box production kicking off in Q1 2025, the ATX LiDAR has already secured design wins with 11 OEMs fueling the democratization of vehicle intelligence. This is opening doors, bringing new clients, and converting others from rival suppliers. We are particularly proud of our client partnerships with Sherry, which is one of China's top three automakers and a major automotive group that includes Voya premium EV brand. Voya flagship electric MPV is a market powerhouse, shipping over 10,000 units per month. Production for these fighting winds kick off in the second half of 2025 and expected to accelerate in 2026. In addition, our order book continues to diversify and expand as we forge new relationships and strengthening existing ones. In February, BYD, the world's largest EV maker, announced that all its models will feature next-generation ADAS, God's Eye, making it accessible to everyone. LiDAR will power two variants of this system, which is key from urban to highway NOA. We've deepened our collaboration with BYD and will supply LiDAR for more than 10 of its models set for mass production in 2025. But this is just the beginning. Our momentum is unstoppable. We've also secured exclusive ATX LiDAR design wings with Great Wall Motors and Chang'an, two of the top 10 Chinese automakers, covering multiple top-performing brands, including bestsellers like Qi Yuan and Wei. slated for mass production in 2025. This marks a major leap for us, accelerating LiDAR adoption in mass market vehicles and vastly expanding our total addressable market. Building on our stellar domestic ADAT performance, we are thrilled to announce yet another major milestone as we expand further onto global stage. We are beyond excited to be awarded a new, groundbreaking, exclusive design win with a top European AOEM, further deepening our collaboration. This multi-year program will last into the next decade across both ICE and EV platforms, marking it the largest global program for the automotive LIDAR industry. This long-term partnership is a resounding endorsement of our unmatched performance and quality. Meeting the rigorous standards of a global market leader, our quality has become our name card, a powerful symbol of excellence and vote of confidence in our visionary future. As we continue to push the boundaries of innovation, our unwavering commitment to delivering unparalleled quality and exceptional products propels us towards an even more exciting future. Our momentum is real. As of today, we have already secured design wings for 120 vehicle models across 22 OEMs worldwide, including the remarkable 9 out of the top 10 largest automakers by market cap in China. It's just a win. That's a statement. A statement of industry leadership, trust, and the sheer power of our cutting-edge technology. In 2025, With demand surging, we're launching new production lines in Q1, which will begin production in Q3. By end of the year, our annualized production capacity is expected to reach 2 million units. We are not just building LiR. We're reshaping the future of mobility. We are bringing intelligence and safety to everyone and everywhere. This isn't just innovation. It's a movement, and we're leading it. Meanwhile, enormous opportunities await us beyond the ADA sector. We're taking our mechanical LiDAR solutions to the next level, expanding into the broader robotics market. Our newly launched JT Mini LiDAR is already redefining robotics navigation with this innovative hyper-hemispherical field of view ultralight compact design. It's ideal for a diverse range of robotics applications, humanoid robots, delivery robots, cleaning robots, AGVs, port and yard automation, stationary applications, and many more possibilities we're exploring. We've also capitalized on the booming robotics market with the JT LiDAR. And we have thrilled to announce a partnership with a leading smart home robotics company, for MOVA Robotics lawmowers forecasting to deliver a six-digit order in 2025. This order book is expected to grow at client expense into new models launching in 2026 and beyond. Additionally, JT has also secured orders from the Autonomous Agriculture Vehicle Solution Partner to the world's largest manufacturer of compact construction equipment. This further signals JT as the go-to choice for the booming robotics market. We're only beginning to unlock its full potential. Building on the strong momentum of our JT series, we have also made significant strides in broader robotics applications. In Q4 2024 alone, beyond JT, we shipped approximately 7,000 robotic LIDAR units to L4 customers powering thousands of autonomous vehicles. Our robotic LiDAR is fueling the robot taxi boom, transforming industrial automation and pushing the boundaries of autonomy. We are the exclusive long-range LiDAR supplier for all of China's top five robot taxi companies, including Baidu's ApolloGo. We're also the sole supplier for a leading global robot taxi player, which clocked nearly a million autonomous miles in 2024 and is set for significant speed expansion in 2025, all powered by our PANDAR and QT series. Beyond mobility, our XT series LiDAR is driving advanced 3D vision for unitries, robots, and automating in-plan driving systems at the BMW factories. These partnerships unite industry leaders in autonomous driving and sensing technology, paving the way for the future of robotics. Finally, I would like to extend my gratitude to our incredible team for an outstanding year. While we've made huge strides, we know this is just the beginning of an exhilarating journey. we are on a mission to redefine the future of mobility and revolutionize robotics with our cutting edge technology. As we continue to push boundaries, I'm confident that our innovations will not only reshape how people and goods move, but also unlock opportunities of growth, efficiency, and sustainability. I will now turn the call over to Andrew to share more details on our financial performance and outlook. Andrew, please go ahead.