Hesai & the LiDAR Opportunity

Hesai Group Breaking Out ASAP! Robotaxis leader could be staging a comeback.

What is LiDAR? 🦇

“LiDAR, which stands for Light Detection and Ranging, is a remote sensing technology that uses laser light to measure distances and create highly accurate 3D maps and models of objects and environments.”

This got me thinking of bats and the physics they use to navigate as they fly in the dark. I later found that this is called echolocation.

In fact, bats don’t use light like LiDAR technology does — instead they emit high-frequency sound waves and as those waves bounce off objects, the bats use those sound waves to create a mental picture of the terrain in front of them. Cool no?!

Anyway, how can we make money off of this? 🦉🫡

Hesai was placed in a US DoD Blacklist of companies affiliated with the Chinese military — Hesai has been contesting the claim in US courts.

What’s the backstory? Let’s have a (special situations) look! Read on.

Hesai is a leader in LiDAR technology, supplying 3/4 of the US Robotaxi Industry.

In short, no LiDAR — no Robotaxis or self-drive cars. Autos (both cars and trucks) need LiDAR to navigate themselves and get to where they are going safely and without disruptions. Think of LiDAR as the eyes of self-driven autos!

Hesai shares crashed since the unfriendly treatment from the DoD, but since then the stock consolidated for almost a year and broke out in late 2024 after a beat in revenue expectations.

The chart looks strong with a solid uptrend since the late ‘24 breakout, and another breakout as we speak after it has been flagging for 4-5 weeks.

The Lawsuit

The company is contesting the blacklist vigorously, and could win the lawsuit in courts if the US DoD cannot create enough proof that the company has ties to the Chinese military.

A positive result in this would be a major positive catalyst.

Price Catalyst

Chinese light detection and ranging (lidar) manufacturer Hesai Group plans to cut its lidar sensor prices by 50% next year. The next-generation lidar, called ATX, will be available at below US$200, a reduction from the existing AT128 model.

The company has signalled that it will heavily discount its products, and help make the technology mainstream by doing so. This is a major catalyst as more automotive companies can embrace the tech for more of their models. LINK.

I will do some more digging on this opportunity and post my work in the Philochat as the stock is already ripping higher and time is of the essence.

Sincerely,

Philo 🦉

APPENDIX - BLUE ORCA SHORT REPORT

March 20th

I removed the paywall on the piece as I exited the trade after the accusations from the Blue Orca short report.

The trade however did work as I sold my shares less than a $1 below the target of $23.75 (refer to resistances in the chart above). I then re-bought $3 lower and sold yesterday for a small profit due to the short report.

I first bought HSAI shares at $17.27 — the return was a 30% in 3 weeks.

Today’s Philochat note on HSAI. I comment on the Blue Orca short report and why I decided to exit.