Soochow Securities has issued a research report indicating that the market will re-evaluate investment opportunities in intelligent technologies in Q4. The firm believes that Hong Kong stocks will outperform A-shares, and that software will be prioritized over hardware, with a focus on B-end rather than C-end. Among the A-H shares currently available for investment, the preferred combination includes XPENG-W (09868), Horizon Robotics-W (09660), and CaoCao Mobility (02643).
The report notes that since the onset of the AI market in 2023, each subsequent wave of AI enthusiasm has led to a broader focus on intelligent technologies. The essence of intelligent systems is the significant application of AI in the physical world, and the firm believes that we should expect exceeding applications in the next 3-5 years! From the perspective of intelligent agents, AI-powered vehicles have already achieved L4 capability (using Robotaxi/vans as an example).
Moreover, Q4 will see continuous catalysts for intelligent technology: the release of Tesla's V14 version is enhancing the operational capabilities of Robotaxis, XPENG may provide details on its 2026 Robotaxi mass production plan during October's Tech Day, and Pony.ai plans to deploy about 500 new seventh-generation unmanned vehicles in Q4, with a hopeful return to positive gross profit. Furthermore, WeRide continues to accelerate its international expansion, and Horizon Robotics' HSD will officially launch in November.
The firm expects that in 2026, key players will accelerate their entry into L4, making it a significant year for Robotaxis. The parallels between this year’s Q4 and last lie in the spread of AI; however, the differences are noteworthy: last year’s Q4 emphasized the resonance between automotive logic and AI logic, while this year’s Q4 focuses more on the derivation of AI logic. At the core of this shift is that after a year of development in intelligent technologies, all players have elevated their capabilities, especially the first-tier players who are progressing towards L4, thus strengthening their ability to deliver within the industry. Moreover, unlike last year which emphasized hardware opportunities and C-end sales, this year may see a greater focus on software opportunities and breakthroughs in the B-end.