With lower LiDAR shipment due to softer ADAS demand and lawn-mower orders, we forecast 3Q26 revenue of RMB1.05bn, trailing previous guidance of RMB 1.1-1.15bn. However, gross margin is poised to remain resilient QoQ at c.40% thanks to a richer product mix of higher-ASP robotics LiDAR. We forecast GAAP net profit of RMB80m–130m in 3Q26, with wide range primarily hinging on the recognition timing of approximately RMB50m in investment income. Within SGI segment, beyond the Kosmo and actuator modules, we anticipate new physical-AI product lines likely to be progressively incubated, seamlessly leveraging Hesai’s leading 3D-perception and sensor-engineering expertise. We cut our 2026-27E group revenue forecasts to RMB3.72bn/RMB4.86bn, and slash non-GAAP net profit forecasts to RMB470m/RMB829m. Based on SOTP valuation methodology, we revised down our TP to HK$22.5/US$23, applying a lower 20x 2027E P/E for core LiDAR business (vs. 25x previously) and an unchanged 10x 2027E P/S for SGI. We believe accelerating LiDAR penetration, overseas expansion, and physical AI-backed SGI operations will help the company buffer the headwinds from domestic auto demand backdrop. Maintain BUY.
Therefore, we maintain our BUY rating. From a thematic perspective, Hesai's SGI assets are uniquely positioned to address embodied AI’s demand for 3D environmental data, while its joint modules successfully extend its total addressable market (TAM) into robotic actuation. Together with collaborative synergy from its affiliate Sharpa, these strategic initiatives sharpen Hesai’s exposure to the humanoid robotics theme catalysts.