Hesai Group (HSAL/2525.HK): Kosmo AI Day takeaways: From demo to commercialization; Buy

We attended Hesai's Kosmo AI Day in Shanghai on Oct 14, where the company officially launched its Kosmo product and introduced several user cases and collaborative partners. Key takeaways: 1) Hesai aims to expand into the physical AI space through actuation modules and AI spatial data; 2) it officially launched the Kosmo platform, comprising both a spatial camera (Kosmo One) and an AI-powered editable space digitization cloud platform (Kosmo World); 3) it showcased several key user cases (including robotics, entertainment and retail verticals) with key strategic partners announced as well. We believe Hesai is making solid product development and commercial progress for its strategic growth initiatives. We forecast revenue contribution from the SGI segment in 2026E/2027E with operating profit break-even in 2027E, driven by collaborations with multiple key clients in each vertical (e.g. Galbot, Sharpa in robotics; RenderMan, DISTRICT Cinema in media/entertainment;