Hesai Group, a maker of sensor technologies for self-driving cars, saw its Hong Kong-listed shares fall more than 8% after reporting a swing to profitability in the first quarter, as a price target cut from Citi weighed on the stock.
"Hesai's core operating profit for 1Q was well above forecast," a Citi analyst said in a report, but noted that the company's blended average selling price (ASP) faded 9% quarter-on-quarter, falling below the bank's expectations.
The Shanghai-based company reported first-quarter revenue of RMB 681 million, a 29.6% increase from the same period last year and 3% above consensus estimates. Hesai swung to a net profit of RMB 18.315 million, or RMB 0.12 per share. However, its gross margin declined by 2.6 percentage points year-over-year to 39.1%.
Shares of HESAI-W (02525.HK) opened down 8.2% in Hong Kong, while its U.S.-listed shares (HSAI.US) fell 9% overnight. The sharp decline despite the profit swing highlights investor concerns over pricing pressure and a potential slowdown in the electric vehicle industry, which Citi cited as a reason for lowering its forecasts.
Citi maintained its Buy rating on Hesai but trimmed its target price on the stock to HKD 223.3 from HKD 257.5, adopting a more conservative outlook for second-quarter shipments. The focus for investors will now be on whether Hesai can protect its margins amid falling selling prices and softer demand in the broader EV supply chain.
This article is for informational purposes only and does not constitute investment advice.
