LiDAR Manufacturer Hesai Group Commences Trading on Hong Kong Exchange, Shares Advance

Hesai Group Shares Advance on Hong Kong Debut Amid Strong Demand for LiDAR Technology

Hesai Group (HKG:2525), a leading Chinese LiDAR solutions provider, successfully debuted on the Hong Kong Stock Exchange (HKEX) on September 16, 2025, marking a significant milestone as the world's first LiDAR company to achieve a dual primary listing in both the U.S. and Hong Kong capital markets. The company's shares opened at HKD 244.0 and closed the first day of trading with a 7% advance, reflecting strong investor confidence.

Initial Public Offering Details and Market Reception

The initial public offering saw Hesai Group raise net proceeds of approximately HKD 4.01 billion, from a gross raise of HKD 4.2 billion (US$533 million), by offering 19,550,000 Class B shares priced at HKD 212.80 each. The Hong Kong public offering was 168.65 times oversubscribed, while the international offering saw a 14.09 times oversubscription, underscoring robust institutional and retail investor demand. This substantial capital influx positions the company for accelerated growth and expansion in the rapidly evolving autonomous vehicle sector.

Performance Drivers and Technological Edge

The positive market reaction to Hesai's listing is rooted in its strong operational performance and technological advancements. In the first half of 2025, Hesai Group delivered 547,913 LiDAR units, representing a 276% year-over-year surge. Deliveries in the ADAS (Advanced Driver-Assistance Systems) segment alone reached 449,651 units, a 238% increase from the previous year, already surpassing its full-year 2024 volume.

This growth is largely attributed to Hesai's proprietary technology, including its self-developed ASIC chips and fourth-generation digital single-photon platform. These innovations have enabled a dramatic reduction in LiDAR costs, with the ATX series now priced at around $200 per unit in volume shipments. This represents a 50% reduction from the prior generation and a more than 95% reduction from early industry prices, making ADAS technology more accessible for mass-market electric vehicles. The company has secured over 120 series production programs from 24 automakers for 2025–2027, including key partnerships with Li Auto, Changan, Geely, Great Wall Motor, Chery, Zeekr, Leapmotor, SAIC Audi, SAIC-GM, and a Toyota joint venture.

Financial Strength and Market Leadership

Hesai Group has demonstrated strong financial health, achieving full-year profitability, as well as positive operating and free cash flow in 2024, becoming the first and only publicly listed LiDAR company globally to do so. In Q2 2025, the company reported revenues of RMB 706.4 million (US$98.6 million), a 53.9% year-over-year increase, and a net profit of RMB 44.1 million (US$6.2 million), a significant turnaround from a loss in the prior year. The company's gross margin stood at 42.5% in Q2 2025.

The company holds commanding market positions, ranking No. 1 in overall automotive LiDAR market share, No. 1 in ADAS LiDAR market share, and No. 1 in Level 4 autonomous driving LiDAR market share globally. In the robotics sector, Hesai is the preferred LiDAR provider for nine of the top ten global Robotaxi companies.

Broader Implications and Analyst Outlook

Hesai's strategic dual listing on the HKEX serves multiple purposes. It provides the company with substantial capital for expansion, reinforces its leadership in the global LiDAR market, and increases liquidity and visibility for international investors. Crucially, the move also helps Hesai diversify its financial and geopolitical risk, reducing exposure to potential U.S. regulatory scrutiny under the Holding Foreign Companies Accountable Act (HFCAA), a trend observed among several Chinese technology firms.

The dramatic cost reduction achieved by Hesai has profound implications for the broader automotive industry, accelerating the adoption of LiDAR technology in electric vehicles and enhancing road safety. Reports suggest that vehicles equipped with Hesai LiDAR have reduced general road accidents by 20% and fatal highway accidents by 90%. While Tesla has opted for camera-only systems, Hesai's success highlights a contrasting approach in the race for autonomous driving.

Analyst sentiment remains positive, with Goldman Sachs raising its price target on Hesai Group (NASDAQ: HSAI) to $36.00 from $26.30 in September 2025, maintaining a "Buy" rating and citing expanding LiDAR adoption.

Future Outlook

Hesai Group plans to allocate the proceeds from its Hong Kong listing towards strategic initiatives, with approximately half dedicated to research and development for next-generation products, including ASIC chip development and the upcoming ETX ultra-long-range sensor. About 35% will go into expanding manufacturing capacity, with plans to quadruple output to 2 million units annually to meet anticipated demand from both ADAS and Robotaxi sectors. The company expects full-year 2025 revenue to reach 3-3.5 billion yuan, projecting a 44%-49% year-over-year increase, with non-GAAP net profit estimated between 350-500 million yuan. This aggressive investment in technology and capacity underscores Hesai's ambition to solidify LiDAR as a standard safety feature in Chinese vehicles by 2026.