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

[Foreign Language].

Thank you, operator. Hello, everyone, and welcome to Robosense Earnings Conference Call for the interim results of 2025. The company's earnings results were released earlier today and are available on our IR website, www.ir.robosense.ai, the website of Hong Kong Stock Exchange, www.hongkongexchangenews.hongkong as well as on Newswell services. Today, you will hear from Mr. Mark Qiu, our CEO; and Mr. Kelvin Lau, our CFO, who will take you through the company's operational and financial results for the first half of 2025. After their prepared remarks, Mark and Kevin will be available to answer your questions. Before we continue, please note that the discussion today may contain certain forward-looking statements, which involve known and unknown risks, uncertainties and other factors which are beyond our control and may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In light of the risks and uncertainty, the inclusion of forward-looking statements in this discussion should not be regarded as representations by the Board of Directors or Robosense that plans and the objectives will be achieved and the shareholders and investors of the company should not place undue reliance on such statements. Robosense does not assume any obligations to update any forward-looking statements, except as required under applicable law. Also, please note that some of the information to be discussed, including non-IFRS financial measures are not required by or represent in accordance with IFRS. The IFRS financial measure and information reconciling this non-IFRS financial measure to Robosense's financial results prepared in accordance with IFRS are included in Robosense's interim results announcement, which has been posted on the company's IR website at www.ir.robosense.ai and the website of Hong Kong Stock Exchange, www.hongkongexchangenews.hongkong. Finally, as a reminder, this conference call is being recorded. In addition, a webcast of this conference call is available on Robosense's Investor Relations website. I will now turn the call over to Mr. Mark Qiu, the CEO of Robosense.

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Thank you, Mark. Now I would like to take you through the 2025 interim results financial highlights. Our total revenue was RMB 783.2 million for the 6 months ended June 30, 2025, representing an increase of 7.7% from RMB 727.1 million for the same period of 2024. The year-on-year increase was mainly attributable to the increase in sales of products during the first half of 2025. Our revenue from the sales of products was RMB 721 million for the first half of 2025, representing an increase of 5% from RMB 686.5 million for the same period of 2024, primarily due to the increase in sales of products for robotics and others. The total number of our LiDAR products sold increased to approximately 266,800 units in the first half of 2025 from approximately 243,400 units in the same period of 2024. For the first half of 2025, our revenue generated from the sales of our LiDAR products for ADAS applications decreased to RMB 500.3 million from RMB 609 million for the same period of 2024, representing a year-on-year reduction of 17.9%. The number of LiDAR products sold for ADAS applications decreased to approximately 220,500 units in the first half of 2025 from approximately 234,500 units in the same period of 2024, primarily attributable to the increase -- to the decrease in sales of LiDAR products to two of our major OEM customers. One of them has adopted to install LiDAR products developed by its strategic Tier 1 supplier in its vehicles, and the other one has ceased to install LiDAR products in its vehicles. Such decreases have been partially compensated by the increase in sales of LiDAR products to another two major OEM customers in China. The average unit price of products for ADAS applications decreased to approximately RMB 2,300 per unit in the first half of 2025 from approximately RMB 2,600 per unit in the same period of 2024. The decrease in the average unit price of products for ADAS applications was mainly because the sales of lower priced MX LiDAR products have been increased in the first half of 2025. Our revenue generated from sales of products for robotics and others was RMB 220.7 million in the first half of 2025, representing an increase of 184.8% from RMB 77.5 million for the same period of 2024. The total number of our LiDAR products sold for robotics and others increased to approximately 46,300 units in the first half of 2025 from approximately 8,900 units in the same period of 2024, primarily attributable to the demand from robotic customers for our new E1R and Airy LiDAR products as well as mechanical LiDAR products such as Helios and Bpearl series has increased in the first half of 2025. The average unit price of product decreased from approximately RMB 8,700 per unit for the first half of 2024 to approximately RMB 4,800 per unit in the same period of 2025, primarily because the unit price of E1R and Airy products were lower than the unit price of those mechanical LiDAR products such as Ruby, Helios and Bpearl series. Our revenue from the sales of solutions was RMB 51.2 million for the first half of 2025, representing an increase of 43.5% from RMB 35.7 million for the same period of 2024. Despite the number of delivered solution projects decreased from 193 projects in the first half of 2024 to 74 projects in the same period of 2025, the average price per project increased from approximately RMB 184,800 in the first half of 2024 to approximately RMB 691,500 in the same period of 2025, primarily attributable to the increase in demand from customers for more customized perception related solutions in the first half of 2025. Our cost of sales was RMB 580.1 million for the six months ended June 30, 2025, representing a decrease of 7.7% from RMB 628.5 million for the same period of 2024. The year-on-year decrease was mainly attributable to the decrease in procurement costs for raw materials. We recorded a gross profit of RMB 203.1 million for the first half of 2025, representing an increase of approximately 106.1% from RMB 98.6 million for the same period of 2024. Accordingly, the gross profit margin improved significantly to 25.9% in the first half of 2025 from 13.6% for the same period of 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 was mainly attributable to the significant gross margin improvement of both our LiDAR products for ADAS applications and LiDAR products for robotic and others. For our LiDAR products for ADAS applications, we recorded a gross profit of RMB 87.2 million for the first half of 2025 as compared to a gross profit of RMB 68.2 million for the same period of 2024, representing an increase of 27.9%. The gross margin for this category -- for this product category improved significantly to gross profit margin of 17.4% for the first half of 2025 from a gross profit margin of 11.2% for the same period of 2024. The gross margin improvement was primarily attributable to the decrease in the raw material procurement costs and the adoption of our in-house developed SOC processing chips, which have lower costs as compared to the FPGA chips acquired from third-party suppliers, in our MX LiDAR products. For our sales of LiDAR products for robotics and others, we recorded a gross profit of RMB 99.3 million for the first half of 2025 as compared to a gross profit of RMB 20.3 million for the same period of 2024, representing an increase of 390.4%. The gross profit margin for this category -- for this product category increased to 45% for the first half of 2025 from 26.1% for the same period of 2024. This was primarily attributable to the reduction of raw material procurement costs and production overheads resulting from the increase in scale of production. For our provision of LiDAR perception solutions, we recorded a gross profit of RMB 27.2 million for the first half of 2025 as compared to a gross profit of RMB 18.3 million for the same period of 2024, representing an increase of 48.3%. The gross profit margin for this product category increased to 53.1% for the first half of 2025 from 51.4% for the same period of 2024. Our R&D expenses were RMB 308.7 million for the first half of 2025, representing a decrease of 1.5% from RMB 313.4 million for the same period of 2024. The year-on-year decrease was mainly attributable to #1, the decrease in share-based compensation of RMB 24.5 million, partially offset by #2, the increase in employee remuneration expenses of RMB 20.8 million, mainly because the number of our R&D personnel increased to 687 in the first half of 2025 from 601 in the first half of 2024. Our R&D expenses excluding share-based compensation as a percentage of revenue maintained at 36.3% in both first half of 2025 and 2024. Our sales and marketing expenses were RMB 56.9 million in the -- for the first half of 2025, representing a slightly decrease of 0.2% from RMB 57 million for the same period of 2024. The year-on-year decrease was mainly attributable to #1, the decrease in professional service fee and advertising and promotional cost of RMB 3 million and #2, the decrease in share-based compensation of RMB 0.3 million, partially offset by #3, the increase in other employee benefit expenses of RMB 3.5 million due to the remuneration packages offered to our employees have been improved. Our sales and marketing expenses excluding share-based compensation as a percentage of revenue reduced to 6.7% for the first half of 2025 from 7.2% for the same period of 2024. Our G&A expenses were RMB 78.3 million for the first half of 2025, representing a decrease of 4.8% from RMB 82.2 million for the same period of 2024. The year-on-year decrease was mainly attributable to #1, the decrease in audit remuneration and professional service fee of RMB 6.8 million, partially offset by #2, the increase in employee benefit expenses of RMB 5.5 million due to the remuneration packages offered to our employees have been improved. Our G&A expenses excluding share-based compensation and listing expenses as a percentage of revenue reduced to 9.3% for the first half of 2025 from 10.1% for the same period of 2024. Net impairment reversal on financial assets increased to RMB 4.1 million for the first half of 2025 from RMB 1 million for the same period of 2024. The increase was primarily due to the decrease in provision for impairment on trade and notes receivables. Our other income increased by 14% to RMB 39.8 million for the first half of 2025 from RMB 34.9 million for the same period of 2024, which was mainly attributable to the increase in government grants in the first half of 2025. Our other losses decreased by 94.5% to RMB 0.2 million for the first half of 2025 from RMB 3.9 million for the same period of 2024. The decrease was primarily due to the fair value gains on financial assets and liabilities at fair value through profit or loss in the first half of 2025. Okay, finance income net decreased by 7.3% to RMB 50.1 million for the first half of 2025 from RMB 54 million for the same period of 2024. The decrease was primarily due to the decrease in interest income from cash and cash equivalents. Our net loss was RMB 148.6 million for the first half of 2025, representing a decrease of 44.5% from RMB 267.5 million for the same period of 2024. All right, this concludes my financial highlights section. Operator, we are ready for questions.

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