Laser Market Is Expected to Catch the "fast Train" of Intelligent Vehicle Development

However, with the increasingly wide application of photoelectric technology in the new generation of intelligent vehicles, the laser market is expected to catch the "express" of the development of intelligent vehicles. The optical shaped spot shows unique advantages in many applications. When applied to lidar, it can reduce the use of mechanical moving parts, so as to greatly improve the system reliability and vehicle specification stability.

Among them, the upstream component manufacturers can provide laser components required for auxiliary driving (ADAS), driver monitoring system (DMS) and augmented reality head up display system (AR HUD). Therefore, there are relatively more opportunities for upstream enterprises in the laser industry chain to cross-border automotive applications.

Torch technology is one of the manufacturers of cross-border lidar. In the previous article [IPO values] behind the entry of Ju Guang Technology into TSMC's supply chain: prominent risk of goodwill impairment in the acquisition of overseas company limo, it was mentioned that Ju Guang technology began to expand into lidar business by acquiring overseas company limo and relying on the success of optical field homogenizer in the application field of semiconductor equipment.

Although it has made good achievements in the semiconductor field, it has still suffered losses for three consecutive years. At the same time, can it succeed in choosing to continue to increase the layout of automotive applications?

Relying on overseas customers to expand lidar business

It is reported that photoelectric technology plays a vital role in the new generation of intelligent vehicles.

Automotive lidar based on laser and optical technology is gradually applied to the field of assisted driving and unmanned driving technology; The intelligent cabin driver monitoring system (DMS) based on near infrared VCSEL laser light source will gradually replace the traditional LED light source to provide AI early warning system with richer and accurate cabin driver behavior information to make more accurate judgment; The augmented reality head up display system (AR HUD) based on laser display can project auxiliary driving information and navigation information on the front windshield in real time.

Lidar is an important sensor of driverless vehicle technology. It is disclosed that Juguang technology is expanding the core competence of vehicle regulation level for innovative automobile application scenarios such as intelligent driving lidar and intelligent cabin driver monitoring system.

At present, torch technology is expanding the R & D, production and sales of photon application modules and systems (including lidar emission modules and uv-l optical systems) in the middle reaches of the laser industry. Its automotive application business mainly includes lidar area light source, lidar line light source, lidar light source optical components, etc.

During the reporting period, the automotive application business (LIDAR) is an emerging business developed by torch technology in recent years, and has gradually become the strategic development direction of torch technology business. Before 2018, Juguang technology mainly provides semiconductor laser components to automotive lidar customers. In 2019, its lidar achieved a breakthrough in revenue, from 2.19 million yuan in 2018 to 22.72 million yuan in 2019, an increase of 10 times.

For the substantial growth of this performance, Ju Guang Technology said that the main reason is that the cooperation project with Continental Germany was officially fixed in 2019, from selling semiconductor laser components to providing lidar transmitting modules to customers, so that the revenue of laser mine business increased greatly in that year.

However, even so, from January to September of 2017 to 2020, the net profit deducted by Juguang technology was -29.1239 million yuan, - 492 million yuan, - 80.7789 million yuan and 18.058 million yuan. The net profit deducted in the first three years continued to be negative, with a cumulative loss of 84.9905 million yuan, which did not turn into profit until 2020.

Can torch technology last until dawn the night before the outbreak of lidar?

Against the background of significant loss of current performance, torch technology still has a large layout in the lidar market. According to the prospectus, Juguang technology plans to use 167 million yuan of the raised funds for the lidar launch module industrialization project.

From its actual situation, the laser radar business of Ju Guang technology is still in the stage of R & D investment and application expansion. Although it has achieved a certain income, it has not yet achieved a large and stable profit. At present, it is still in the process of constantly exploring the unknown, and the commercialization and marketization have certain uncertainty.

If they fail to make a correct judgment on the R & D direction or fail to harvest the expected application effect in the downstream market, they will face the risk of failure of R & D and raised investment projects. Under the current situation of lidar market, it is doubtful whether Juguang technology can wait for the outbreak of lidar market or obtain a considerable share.

According to the prospectus, by the end of September 2020, Juguang technology had reached cooperation intentions or established cooperation projects with a number of enterprises in North America, Europe and other regions, including velodyne lidar, luminar and Argo AI, which are listed on NASDAQ lidar in the United States.

Among them, the peak power solid-state lidar surface light source, which has been developed since 2016, has signed a batch supply contract with Continental Germany and has entered the stage of batch production.

From the top five customers, Continental ranked the third largest customer in 2019 and the first three quarters of 2020, contributing 7.10% and 9.26% of operating revenue respectively. From the book point of view, even if there are orders from major lidar customers, it has failed to make up for its loss in performance.

From the perspective of industry development, relying on large overseas customers to expand lidar business may become a major uncertainty in its future performance, which will reduce investors' valuation.

Lidar is about to enter the mature stage, and the next competition is the product cost and scale advantages. Industry insiders believe that "lidar is on the eve of commercial application, and intensified competition is a necessary process for the development of the industry. At that time, many enterprises will not see the dawn of the outbreak of the industry due to inappropriate development route, changes in customer relations and other reasons."

At present, velodyne, luminar, quanergy, Bosch, mainland China, Valeo, Huawei, Dajiang and other manufacturers have gathered on the lidar track. Industry insiders believe that the technical route is not the most important for which lidar manufacturer can stand out in the future competition, and the key is whether it can be loaded for mass production and application.

From the perspective of automobile enterprises, product cost is the key consideration index. On the premise of meeting the requirements, the lower the product cost, the more opportunities to "get on the bus". In recent years, Huawei and Suteng juchuang have adopted the solid-state lidar route, impacting the market at a lower price. Huawei released medium and long-range lidar products and solutions at the end of 2020. This lidar has a detection range of 150 meters, 96 threads and a price of hundreds of dollars.

Under the advantage of low cost, BAIC Jihu HBT model is currently selected to cooperate with Huawei. This model will be equipped with three Huawei 96 line vehicle specification level high-performance lidars and will be listed within the year. In addition, Chang'an Automobile also announced that it would work with Huawei to build a high-end smart car brand, which would be equipped with five lidars.

In contrast, for overseas lidar manufacturers such as velodyne, luminar and mainland Germany, the unit price of products is often tens of thousands of dollars, and the loading and mass production has also become the "ceiling" for the listing and valuation of these enterprises. Taking velodyne as an example, its share price performance after listing is not ideal. As of January 19, the market value is only $3.872 billion.

In the view of industry insiders, if overseas lidar manufacturers fail to realize mass production and loading, it will also directly affect the shipment of components related to Juguang technology; Relying on these overseas customers, whether torch technology can go smoothly in the field of lidar in the future will also face the market test.