We maintain "Buy", and increase TP to HK$46.40. RoboSense (the “Company”), posted strong revenue growth in 2025Q2 in the Robotics segment, and moderate growth in the ADAS segment. Therefore, we adjust our 2025-2027 revenue forecasts to RMB2,446 mn (-6.8%) / RMB3,756 mn (+2.4%) / RMB5,227 mn (+5.2%), respectively. We expect adjusted net profit expected to turn positive in 4Q25. Our TP is based on a SOTP 2026F EV/S valuation of 2.0x for the ADAS segment and 10.0x for the robotics segment. This results in a 8.4x/ 5.5x/ 3.9x 2025-2027 EV/S Ratio. We rollover our valuation methodology to using 2026 multiples to more accurately capture the growth of the Company’s fast growing robotics segment.
　　The Company’s robotics segment revenue tripled YoY due to breakthroughs in the E1R and Airy products in multiple markets, including robot lawn mowers, food delivery and humanoid robotics. The Company’s partners in the robot lawn mower market include several global top 5 lawn mower manufacturers with order volume already in the seven digit unit range. In unmanned delivery, the Company has collaborated with Meituan, Neolix, White Rhino, COCO Robotics and two top tier delivery platforms in North America. In the field of humanoid robotics, the Company has collaborated with 20 leading humanoid robot companies, including Unitree and Dobot. Given the potential of this market, strong purchasing power of certain segments of robotics market and the quality of RoboSense’s partners, we believe this market will grow significantly moving forwards.
　　The Company’s ADAS segment revenue significantly recovered in the quarter, primarily due to fewer design win conversions to revenue in 2025Q1. However, ADAS revenue missed our expectation of RMB386 mn RMB, primarily due to mass production of the EMX LiDAR being in 2025Q3 rather than in 2025Q2 as we predicted. Total revenue for 2025Q2 was RMB271 mn, down 10.5% YoY but up 18.6% sequentially. ADAS revenue missed our expectation of RMB386 mn RMB, primarily due to mass production of the EMX LiDAR being in 2025Q3 rather than in 2025Q2 as we predicted. LiDAR product sales volume was 123.8k, up 4.6% YoY. ADAS LiDAR ASP was RMB2,193, down -14.4% YoY and -7.3% sequentially. Gross margin for the segment increased by 4.4 ppt sequentially to 19.4%. The ASP decline and the gross margin increase is due to product mix including newer MX and EMX products, which sell at a lower price but have higher margins due to lower production costs. The key innovation for reducing LiDAR prices is the integration of the core receiver system and echo-feature recognition function into one single SPAD-SOC chip, which simplifies the signal flow chain, lowers power consumption, enhances signals completeness and consistency, thus decreasing the cost of raw materials per LiDAR. We expect revenue to pick up significantly in the 2H25 due to deliveries of mass production and deliveries of EMX LiDAR.
　　Catalyst: earnings reports validating delivery of the Company’s robotics LiDAR volume.
　　Risks: Lower-than-expected robotics ASP and/or market share gain due to　enhanced competition within the industry.