Pepe Invests
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Hesai may be undervalued as the first LiDAR company ever to post a full-year GAAP profit. Revenue rose 46% to RMB 3.03B (about $433M), with $679M in cash and investments and no debt. It has design wins with all top 10 Chinese automakers, is the primary LiDAR partner for NVIDIA Hyperion 10 and holds a 6M+ unit order backlog. At $22.66 a share and a $2.95B market cap, it trades below the $32.26 average target of seven analysts. x.comÂ
Hesai is a Chinese company, so the market will apply roughly a 90% discount to it upfront. x.comÂ
China-heavy emerging-market funds carry a lasting governance risk: autocratic leadership has little alignment with foreign shareholders. Chinese shares may offer tactical trades, but a permanent rerating is hard until the CCP is gone. x.com x.com x.comÂ
Hesai is a wonderful company at a great price and is now the top company in lidar. The position is meant to be held for as long as that thesis stays intact. x.comÂ
Chinese stocks are uninvestable for long-term investors because the value created goes to the Communist Party, not shareholders. The Chinese index is down 16% since 1991 while the S&P 500 rose 1,570% and the Nasdaq 3,440%, and Alibaba has gained just 27.8% in 12 years since its IPO. When companies grow too strong, the party hits them with megafines, sidelines founders like Jack Ma or blocks game releases as at Tencent, and foreign investors own only VIE contracts, not shares. x.com x.com x.com … Show more
Richtech Robotics has broken trust, which matters more than its restatement. It said its FY2024 and FY2025 financials and four quarterly 10-Qs cannot be relied upon, mainly over warrant and SEPA accounting it calls primarily non-cash. But its December 10-Q said a material weakness was remediated, this filing says it was not, another is coming, and other adjustments could be material. Heavy panic selling looks likely despite the muted reaction. x.comÂ
Hesai is a supplier to Nvidia's humanoid robot reference platform. It provides LiDAR and actuators to Unitree and Sharpa, the two companies Nvidia chose for Isaac GR00T, including actuators for Sharpa's reference dexterous hand under a cost-plus contract through its new SGI division. The China discount on the stock is getting ridiculous. The proposed SAFE LiDAR Act, which would phase out Chinese LiDAR across the US economy, is a risk, though unlikely to pass. x.com x.com x.comÂ
Zhipu (Knowledge Atlas) is already valued at nutty levels. At HK$2,094, buying it on $1B of ARR is like paying $6T for Anthropic on $50B of ARR. Its GLM models are genuinely impressive, but that valuation comes before factoring in the headaches of owning Chinese stocks. x.comÂ
Super Micro Computer's fraudulent backdrop is now catching up with it, as it faces fraud charges for smuggling Nvidia GPUs to China. A forensic accounting review flagged it in May 2024 and Bloomberg warned in February 2021, so the best play was not to own it. Nvidia, for which Super Micro is the third-largest customer, may be next, given round-tripping and other accounting dangers. x.com x.comÂ
Super Micro Computer is the worst company added to the S&P 500 this decade, and its governance looks like a scam. Per @ns123abc, co-founder Wally Liaw, who holds about $464 million of the stock, was arrested and charged with smuggling about $2.5 billion of Nvidia GPU servers to China through a Southeast Asian shell company, including building dummy servers to fool compliance auditors. Super Micro fell 12% after hours. x.comÂ