A securities research report reaffirmed RoboSense (02498) "BUY" rating with a target price of HK$48.50 per share. The firm adjusted its financial forecasts, downgrading estimates for fiscal 2025 while upgrading expectations for fiscal 2026 and 2027, anticipating that robotics LiDAR applications will contribute more significantly and bring profitability to the group in fiscal 2026.
Sales of ADAS LiDAR are expected to remain weak this year, with the firm lowering its sales forecast to approximately 600,000 units. However, a strong rebound is anticipated next year with the launch of the EM series products. Additionally, driven by large-scale orders, robotics LiDAR sales are expected to grow significantly in the fourth quarter.
**Strong Revenue Growth in H1 2025**
RoboSense recorded revenue of RMB 780 million in the first half of 2025, representing a 7.7% year-on-year increase. The growth was primarily driven by robotics LiDAR sales, which surged 184.8% year-on-year. The group's gross margin further improved to 25.9%, reflecting continuous improvement from economies of scale and proprietary technology advancement.
**Q4 Holds Greater Market Potential**
ADAS LiDAR sales declined 18.8% year-on-year in the first half of 2025, with shipments falling to 220,500 units. This was mainly due to reduced orders from two major customers, with one adopting LiDAR products developed by strategic tier-one suppliers and another exiting LiDAR applications.
With the mass production of high-value EMX and L3/L4-compliant digital LiDAR EM4 at the end of Q3 2025, the group further consolidated its position in the digital LiDAR market. SOC integration technology helps streamline connections and reduce power consumption, making the EM series more competitive in the market, with Q4 sales performance expected to improve further.
Although the average selling price dropped to RMB 2,192.5 in Q2, with further pressure from increased EMX sales proportion, economies of scale and the adoption of self-developed SOC processing chips led to increases in quarterly shipments and gross margin. The firm expects the group's gross margin to potentially expand further to the 20%-25% range.
**Strong Growth Momentum in Robotics LiDAR Sales**
In the first half of 2025, RoboSense delivered 46,300 units of robotics LiDAR, representing approximately a six-fold year-on-year increase. This growth was primarily driven by strong demand in the robotic lawn mower market, with the E1R model showing outstanding performance.
The group has successfully secured a major order for approximately 1.2 million automotive-grade solid-state LiDAR units, establishing a solid foundation for future revenue growth. While there is some demand in logistics and industrial sectors, robotic lawn mower applications remain the primary current demand driver. The group has set aggressive targets for robotics LiDAR sales in fiscal 2025 and 2026.
Furthermore, the group is about to release an improved AC2, which integrates camera, LiDAR, and IMU data to better meet the increasingly complex application requirements of downstream industries.