Episode Details

Hesai Group (HSAI) Q2 2026 — Hesai furnished Q2 2026 results on Form 6-K before the US open on Tuesday August 18, with the call at 8.00am ET, so Tuesday August 18 was the reaction session. The ADS closed at USD18.07 on August 17, OPENED at USD15.77 - a 12.8 pct gap down - bottomed at USD15.70 and closed at USD17.11, down 5.31 pct on the day but UP 8.53 pct open to close, on 3.83M shares against a 1.51M twenty-session average, or 2.53x normal. Hesai Group is the largest lidar maker in China, supplying advanced driver-assistance systems, robotaxis and robotics, and is dual-listed on Nasdaq and HKEX. Q2 2026 net revenues were RMB860.8M, up 21.9 pct, on 628,275 lidar units shipped, up 78.4 pct. The ADS gapped 12.8 pct down at the open and closed 8.53 pct above that open. THE CALL: HOLD (3/5, MEDIUM - THE TAPE FIXED THE WRONG MISTAKE) — base-case value ~$15.79 vs ~$17.11 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD15.79 against the USD17.11 close, -7.7 pct. Bear USD8.66 / base USD15.03 / bull USD24.45. A sum of the parts, because Hesai has just disclosed that it is two businesses pointing opposite ways. - THE ANGLE: the headline EPS of USD0.01 versus a USD0.0722 bar is NOT a comparison. On July 10 2026 Hesai split each ordinary share into eight and the depositary moved the ADS ratio to 1 ADS = 8 ordinary shares, per Form F-6 POS. The release quotes per ORDINARY SHARE; consensus is per ADS. - CORRECTED: net income of USD10.4M across 156.55M ADS is USD0.0664 GAAP basic, -7.9 pct versus the bar - roughly in line. Non-GAAP diluted is USD0.0917, a 27.1 pct BEAT. There was no 86 pct miss, which is why the gap fully reversed intraday. - WHAT NOBODY PRICED: consolidated income from operations was RMB2.2M on RMB860.8M of revenue, a 0.25 pct margin, down 90.4 pct. Hesai's FIRST segment split shows lidar earned RMB66.2M at an 8.1 pct margin while Strategic Growth Initiatives lost RMB64.0M on RMB44.9M of revenue. - THE PROFIT IS A BANK BALANCE: 96.9 pct of the RMB70.6M net income came from BELOW the operating line - RMB59.0M interest income plus RMB36.6M investment income on a RMB7.05bn cash reserve, less RMB23.2M of FX. Net cash of USD945M is 35 pct of the market value. - GUIDANCE: Q3 2026 net revenues of RMB1,100-1,150M, up 38-45 pct. Full-year Strategic Growth Initiatives revenue guidance RAISED from RMB100M to RMB200-300M, with roughly USD100M and breakeven targeted for 2027. Gross margin 40.1 pct against 42.5 pct. What to watch: UP: the Q3 guide of RMB1,100-1,150M, or 38-45 pct growth, arriving in full; the lidar segment operating margin expanding from 8.1 pct while shipments compound; a second quarter of Strategic Growth Initiatives revenue near the guided run rate. DOWN: average selling prices continuing to fall 31 pct a year; the growth arm's loss widening as its revenue guidance is delivered; any deterioration in the China-issuer audit and delisting position. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.