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

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Now I would like to take you through the 2024 full year results financial highlights. Our total revenue increased significantly by 47.2% from RMB 1,120.1 million in 2023 to RMB 1,648.9 million in 2024. The increase was primarily due to the increase in sales of product in 2024. Our revenue from the sales of product increased significantly by 59.2% from RMB 963.5 million in 2023 to RMB 1,533.7 million in 2024, primarily due to the increase in sales of product for ADAS applications such as our automotive-grade solid-state LiDAR. In 2024, our revenue generated from sales of our LiDAR products for ADAS application increased significantly to RMB 1,335.3 million from RMB 777.1 million in 2023, representing a significant year-on-year growth of 71.8%. The total number of our LiDAR products sold increased from approximately 259,600 units in 2023 to approximately 544,200 units in 2024. The numbers of LiDAR products sold for ADAS application significantly increased from approximately 243,000 units in 2023 to approximately 519,800 units in 2024. The revenue growth of LiDAR products for ADAS application driven by the increase in sales volume of products was partially offset by the decrease in the average unit price of products for ADAS application to approximately RMB 2,600 per unit in 2024 from approximately RMB 3,200 per unit in 2023. The decrease in the average unit price of product for ADAS application was mainly because we have lowered the average selling price of our product offered to our customers when the sales volume has been increased and the raw material procurement costs have been reduced. Our revenue generated from sales of products for robotics and others increased from RMB 186.5 million in 2023 to RMB 198.5 million in 2024, representing a year-on-year increase of 6.4%. The total number of LiDAR products sold for robotics and others increased to approximately 24,400 units in 2024 from approximately 16,600 units in 2023, while the average unit price of product decreased to approximately RMB 8,100 per unit in 2024 from approximately RMB 11,200 per unit in 2023, primarily because the sales of lower-priced Helios and Bpearl series increased whilst the sales of higher-priced Ruby series decreased in 2024. Our revenue from the sales of solution decreased slightly by 11% from RMB 110.1 million in 2023 to RMB 98 million in 2024. Despite the number of delivered solution projects increased to 331 projects in 2024 from 220 projects in 2023, the average selling price per project decreased to approximately RMB 296,000 in 2024 from approximately RMB 500,300 in 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-P series solution projects, which are robotaxi solution for robotic application and early testing stage of ADAS applications that integrate our LiDAR hardware products and AI perception software to enable higher level autonomous driving, has increased. Our revenue from the provision of services and others decreased significantly by 63.1% from RMB 46.5 million in 2023 to RMB 17.2 million in 2024, primarily due to the number of completed technology service projects has been decreased in 2024. Our cost of sales increased by 33% from RMB 1,026.5 million in 2023 to RMB 1,365.3 million in 2024, primarily driven by increase in sales of product in 2024. Our gross profit increased significantly by 202.8% from RMB 93.6 million in 2023 to RMB 283.6 million in 2024. Our overall gross margin was largely affected by the changes in the sales contribution from different product categories. The increase in overall gross margin from 8.4% in 2023 to 17.2% in 2024 was mainly attributable to the increased gross margin improvement of our LiDAR products for ADAS application. In particular, for our LiDAR products for ADAS application, we recorded a gross loss of RMB 45.8 million in 2023 and a gross profit of RMB 179.2 million in 2024. The gross margin for this product category improved significantly from a gross profit -- gross loss margin of 5.9% in 2023 to gross profit margin of 13.4% in 2024. The gross margin improvement was mainly attributable to the decrease in raw material procurement costs and the economy of scales, as the scale of our production volume for LiDAR products for ADAS application in 2014 was significantly higher than the production volume in 2023. For sales of LiDAR products for robotics and others, we recorded a gross profit of RMB 82.6 million and RMB 68.5 million in 2023 and 2024, respectively. The gross profit margin for this product category decreased from 44.3% in 2023 to 34.5% in 2024. This was primarily due to increase in sales of Helios and Bpearl series, which have a gross margin lower than debt of Ruby series, caused the overall gross margin of products for robotics and others to decrease in 2024. For our provision of LiDAR perception solution, we recorded a gross profit of RMB 61 million and RMB 52.7 million in 2023 and 2024, respectively. The gross profit margin for this product category decreased slightly from 55.4% in 2023 to 53.8% in 2024. This was primarily due to the decrease in our reference solution project, which are normally charged at higher gross margins, whilst the numbers of lower gross margin standard RS-Fusion-P series solution projects has increased in 2024. For our provision of services, we recorded a gross loss of RMB 4.1 million and RMB 16.8 million in 2023 and 2024, respectively. The gross margin for this product category decreased from a gross loss margin of 8.8% in 2023 to 97.6% in 2024. This was primarily due to the increase in the costs related to several one-off technology development projects in 2024. Our R&D expenses decreased slightly by 3.1% from RMB 635.1 million in 2023 to RMB 615.4 million in 2024. The decrease was primarily due to a decrease in share-based compensation of RMB 146.1 million, partially offset by number one, the higher employee benefit expenses, which were mainly attributable to the increase in the number of R&D personnel to 637 in 2024 from 563 in 2023, and improved remuneration packages 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 algorithm and development of proprietary chips, which enjoyed better remuneration packages. Our R&D expenses, excluding share-based compensation as a percentage of revenue reduced to 33.6% in 2024 from 38.2% in 2023. Our sales and marketing expenses increased by 28.2% from RMB 86 million in 2023 to RMB 110.3 million in 2024. The increase was primarily due to, number one, the higher employee benefit expenses, which were mainly attributable to the increase in the number of sales and marketing -- sales and marketing personnel and bonus payment caused the salary expenses to increase by RMB 10.4 million, and the increase in share-based compensation of RMB 4.7 million. And number two, the increase in business development and promotional activities as the number of customers and relevant business activities have been increased. Our sales and marketing expenses, excluding share-based compensation as a percentage of revenue reduced from 7.3% in 2023 to 6.1% in 2024. Our G&A expenses decreased by 52.6% from RMB 345.9 million in 2023 to RMB 164 in 2024. The decrease was primarily due to, number one, the decrease in share-based compensation of RMB 152.2 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 9.1% in 2024 from 11.8% in 2023. Net impairment losses on financial assets increased by 414.4% from RMB 2.3 million in 2023 to RMB 11.8 million in 2024. The increase was primarily due to increase in long outstanding trade receivables from customers, who have a higher -- who have a relatively higher credit risk. Our other income increased by 15.6% from RMB 45.4 million in 2023 to RMB 52.5 million in 2024. The increase was primarily due to the increase in government grants. Our other losses, which were primarily net foreign exchange losses, increased by 82.8% from RMB 10.3 million in 2023 to RMB 18.8 million in 2024. The foreign exchange losses we incurred in 2023 and 2024 were related to RMB-denominated intra-group borrowings by RoboSense Hong Kong to Shenzhen Suteng. The functional currency of RoboSense Hong Kong was U.S. dollars. The greater appreciation of U.S. dollars to RMB exchange rate caused the net foreign exchange losses to increase in 2024. Net finance income increased by 27.7% from RMB 78.1 million in 2023 to RMB 99.7 million in 2024. The increase was primarily due to the increase in interest income from cash and cash equivalents. Fair value changes in financial instruments issued to investors decreased by 99.9% from RMB 3,471.1 million in 2023 to RMB 2.8 million in 2024, it was primarily due to the automatic conversion of all the preferred shares into ordinary shares upon listing on January 5, 2024. Upon listing, all the preferred shares were automatically converted into ordinary shares and were reclassified from liabilities to equity accordingly. As a result of the foregoing, our net loss decreased by 88.9% from RMB 4,331 million for the year ended December 31, 2023, to RMB 481.8 million for the year ended December 31, 2024. All right. This concludes my financial highlights section. Operator, we are ready for questions. Thank you.

[Foreign Language] [Operator Instructions] [Foreign Language] Thank you.