Robosense Technology Co., Ltd (2498) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Third Quarter of 2024 RoboSense Technology Company Limited Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I would now like to turn the conference over to [ Ms. Joy Chen ], the Investor Relationship Director. Thank you. Please go ahead.

Thank you, operator. [Foreign Language].

[Foreign Language] .

Okay. Thank you, Mark. Okay. Okay. Thank you, Mark. Now I would like to take you through the third quarter of 2024 financial highlights. Our total revenue was RMB 407.9 million for the third quarter of 2024, representing an increase of 54.7% from RMB 263.6 million for the same period of 2023. The year-on-year increase was mainly attributable to the increase in sales of products in the third quarter of 2024. Our revenue for the sales of products was RMB 384.8 million for the third quarter of 2024, representing an increase of 63.7% from RMB 235 million for the same period of 2023. The year-on-year increase was mainly attributable to the increase in sales of products for ADAS applications such as our automotive-grade solid-state LiDAR. In the third quarter of 2024, our revenue generated from sales of our LiDAR products for ADAS applications increased to RMB 329.5 million from RMB 176.2 million in the same period of 2023, representing a significant year-on-year growth of 87.1%. The total number of our LiDAR products showed an increase to approximately 138,600 units in the third quarter of 2024 from approximately 59,000 units in the same period of 2023. The number of LiDAR products showed up for ADAS applications increased significantly to approximately 131,400 units in the third quarter of 2024 from approximately 53,200 units in the same period of 2023. The revenue growth of LiDAR products for ADAS applications driven by the increase in sales volume of products was partially offset by the decrease in the average unit price of products for ADAS applications to approximately RMB 2,500 per unit in the third quarter of 2024 from approximately RMB 3,300 per unit in the same period of 2023. The decrease in the average unit price of products for ADAS application was mainly because we have lowered the average selling price of our products over to our customers when the sales volume has increased and the raw material procurement costs have been reduced. Revenue generated from sales of products for robotics and others decreased from RMB 58.9 million in the third quarter of 2023 to RMB 55.3 million in the same period of 2024, representing a year-on-year decrease of 6.1%. The total number of LiDAR products showed up for robotics and others increased to approximately 7,200 units in the third quarter of 2024 from approximately 5,800 units in the same period of 2023. While the average unit price of product decreased to approximately RMB 7,700 per unit in the third quarter of 2024 from approximately RMB 10,100 per unit in the same period of 2023, primarily because the sales of lower-priced Helios and Bpearl Series increased, while the sales of higher-priced Ruby Series receivables decreased in the third quarter of 2024. Revenue from the sales of solutions was RMB 22.1 million for the third quarter of 2024, representing a decrease of 11.3% from RMB 24.9 million for the same period of 2023. Despite the number of [ delivered ] solution projects increased to 119 projects in the third quarter of 2024 from 82 projects in the same period of 2023, the average selling price per product decreased to approximately RMB 185,500 in the third quarter from approximately RMB 303,400 in same period of 2023, primarily attributable to the decrease in our reference solution projects, which are normally charged at a higher average selling price, while the number of lower-priced standard RS-Fusion Series solution projects, which are [ V2X ] solution for robotic applications and early testing stage of our ADAS applications that integrate our LiDAR hardware products and AI perception solution -- software to enable higher level autonomous driving has increased. Our cost of sales was RMB 336.7 million for the third quarter of 2024, representing an increase of 39.9% from RMB 224.6 million for the same period of 2023. Year-on-year increase was mainly attributable to the increase in sales of products for ADAS applications. We recorded a gross profit of RMB 71.2 million for the third quarter of 2024, representing an increase of approximately from 210.2% from RMB 23 million for the same period of 2023. Accordingly, the gross margin improved significantly to 17.5% for the third quarter of 2024 from 8.7% for the same period of 2023. Our overall gross margin was largely affected by the changes in the sales contribution from different product categories. The increase in overall gross margin was mainly attributable to the significant gross margin improvement of our LiDAR products for ADAS application. In particular, for our LiDAR products for ADAS application, we recorded a gross profit of RMB 46.5 million for the third quarter of 2024 as compared to a gross loss of RMB 13.5 million in the same period of 2023. The gross margin for this product category improved significantly to gross profit margin of 14.1% in the third quarter of 2024 from a gross loss margin of 7.7% in the same period of 2023. Gross margin improvement was primarily attributable to the decrease in raw material procurement costs and the economy of scale, as the scale of our production volume for LiDAR products for ADAS application in the third quarter of 2024 was significantly higher than the production volume in the same period of 2023. For sales of LiDAR products, both Robotic and ADAS, we recorded a gross profit of RMB 19.1 million and RMB 21.6 million in the third quarter of 2024 and 2023, respectively. The gross profit margin for this product category decreased to 34.6% in the third quarter of 2024 from 36.6% in the same period of 2023. The increase in sales of Helios and Bpearl Series, which have gross margin lower than that of Ruby Series caused the overall gross margin of product for Robotics and others to decrease in the first quarter of 2024. For our fruition of LiDAR perception solutions, we recorded a gross profit of RMB 13.2 million and RMB 17.6 million in the third quarter of 2024 and 2023, respectively. The gross margin for this product category decreased to 59.6% in the third quarter of 2024 from 70.8% in the same period of 2023. This was primarily attributable to the decrease in our reference solution projects, which are normally charged at higher gross margins, whilst the number of lower gross margin standard RS-Fusion Series solution projects has increased in the third quarter of 2024. Our research and development expenses were RMB 151.7 million for the third quarter of 2024, representing an increase of 30.3% from RMB 116.4% for the same period of 2023. The year-on-year increase was mainly attributable to, number one, the high employee benefit expenses, which were mainly attributable to the increase in the number of R&D personnel to 635 in the third quarter of 2024 from 559 in the same period of 2023, and improved the remuneration package for our R&D personnel; and number two, the increased R&D equipment, resulting in higher depreciation and amortization expenses. We recruited additional R&D personnel specialized in AI acquisition and development of proprietary chips, which enjoyed better remuneration package. Our R&D expenses excluding share-based compensation as a percentage of revenue reduced to 24.9% in the third quarter of 2024 from 37.5% in the same period of 2023. Our sales and marketing expenses were RMB 26.4 million for the third quarter of 2024, representing an increase of 24% from RMB 21.3 million for the same period of 2023. The year-on-year increase was mainly attributable to, number one, the higher employee benefit expenses, which were mainly attributable to the increase in share-based compensation of RMB 2.6 million; and number two, the increase in business and -- business development and proportional activities as a number of customers and development business activity have been increased. Our sales and marketing expenses, excluding share-based compensation as a percentage of revenue reduced to 5.9% in the third quarter of 2024 from 8.1% in the same period of 2023. G&A expenses were RMB 36.4 million for the third quarter of 2024, representing a decrease of 53.5% from RMB 78.3 million for the same period of 2023. The year-on-year decrease was mainly attributable to, number one, the decrease in share-based compensation of RMB 32.2 million; and number two, the decrease in listing expenses. Our G&A expenses, excluding share-based compensation and listing expenses as a percentage of revenue reduced to 8.5% in the third quarter of 2024 from 12.6% in the same period of 2028 -- 2023. Our net loss was RMB 83.2 million for the third quarter of 2024, representing a decrease of 77% from a net loss of RMB 361.1 million for the same period of 2023. All right. This concludes my financial highlights section. Operator, we are ready for questions.

[Operator Instructions] We have the first question from the line of Chery Liu from JPMorgan.

[Foreign Language].

[Foreign Language].

[Foreign Language] .

[Foreign Language] .

The next question is from the line of Yiming Wang with China Renaissance.

[Foreign Language] .

[Foreign Language].

The next question is from the line of [ Jun-Chang Li ] with [indiscernible].

[Foreign Language] .

[Foreign Language].

[Foreign Language].

[Foreign Language].

The next question comes from the line of [ Jack Liu ] with First Shanghai Securities.

[Foreign Language] .

[Foreign Language] .

The next question is from the line of [ Shivan Lee ] with China International Capital Corporation.

[Foreign Language].

[Foreign Language] .

The next question is from the line of [ Yang Tong ] with CICC.

[Foreign Language].

[Foreign Language] .

The next question is from the line of [indiscernible] with China International Finance Securities.

[Foreign Language].

[Foreign Language].

[Foreign Language]

[Foreign Language] .

Thank you. We don't have any further questions at this moment. Presenters, you may please continue.

Thank you, operator. [Foreign Language]. Operator, please continue.

Thank you. Ladies and gentlemen, that does conclude our call for today. Thank you for participating. You may all disconnect.