HORIZONROBOT-W drops 5% as UBS cuts target to HKD10

HORIZONROBOT-W fell 5.19% to HKD5.66 after UBS cut its target price 24% to HKD10, citing weak auto demand in China.

UBS lowered its revenue forecasts for the autonomous driving chipmaker by 8% to 14% for fiscal years 2026 through 2028, the bank said in a note. The bank maintained its Buy rating while cutting the price target from HKD13.20 to HKD10, implying about 77% upside from the current price.

UBS also reduced its adjusted EPS estimates for fiscal 2026 through 2028 to negative RMB0.25, negative RMB0.12 and positive RMB0.04, respectively, reflecting lower revenue projections and higher research and development expense assumptions.

Despite the near-term headwinds, UBS expects the company's revenue compound annual growth rate for fiscal 2025 through 2028 to reach 61%, driven by growing market share in high-end autonomous driving chips and accelerating revenue from cockpit technology applications starting in 2027.

The stock touched an intraday low of HKD5.64, with turnover of 75 million shares valued at HKD434 million. Short-selling activity accounted for 37.89% of turnover, or HKD528.63 million, indicating elevated bearish positioning.

The company benefits from structural demand for advanced driver-assistance systems in China, where automakers are racing to deploy Level 2-plus and Level 3 autonomous features. Revenue from cockpit technology applications is expected to accelerate from 2027, providing a second growth engine beyond the core chip business.

The 24% target cut reflects near-term pressure from China's sluggish auto market, but the maintained Buy rating and 61% revenue CAGR forecast suggest UBS sees the current weakness as temporary. Investors will watch monthly China auto sales data and the company's next earnings report for signs of a demand recovery.

This article is for informational purposes only and does not constitute investment advice.