Hesai Earned 88.86 Million Net in Half a Year, So Why Is It Still at a Loss Once You Strip Out Wealth Management Income?

Hesai Technology posted a net profit of 88.865 million yuan in the first half of the year, up 234.9% year over year; revenue came in at 1.541 billion yuan, up 25.1%. Looking at just these two numbers, a lidar company appears to have crossed the profitability line.

But I flipped to the lines further down the income statement and ran the numbers again. Interest income for the first half was 115.8 million yuan, and investment gains were 36.566 million yuan. Together that's 152.4 million yuan, or 1.7 times the net profit. In other words, most of that 88.86 million yuan in book profit did not come from selling lidar.

First, look at shipment volume. In the first half, Hesai sold nearly 1.1 million units of lidar, up 100.8% year over year—essentially doubling. Of that, 839,300 units were automotive ADAS lidar and 260,700 were robotics lidar, accounting for nearly a quarter. But gross margin fell from 42.4% in the same period last year to 39.7%, down 2.7 percentage points. Net cash outflow from operating activities was 103 million yuan, narrower than last year but still not positive; cash reserves on the books stood at 7.051 billion yuan.

Data source: Hesai Technology 2026 interim report, Q2 earnings call, Hong Kong Stock Exchange announcements; some figures are editor calculations.

Revenue Is Up, Gross Margin Is Falling

Revenue was 1.541 billion yuan, up 25.1% year over year, including 861 million yuan in the second quarter, up 21.9% year over year. But while shipments nearly doubled in the first half, revenue rose only about a quarter. Hesai itself gave the reason in its financial report: the increase in deliveries was "partially offset by a decline in average selling price." In essence, it is trading price for scale.

Gross margin therefore slid from 42.4% to 39.7%. Still, the second quarter alone recovered to 40.1%, slightly better than the first-half overall figure. The company attributed this to "an increased revenue contribution from products with relatively lower margins." The more it ships, the lower the per-unit price; scale goes up, but unit profit gets thinner.

Even the leader cannot avoid the price war. Hesai holds a 55% share of China's automotive lidar market and had ranked first for 14 consecutive months as of March 2026. It won an L3 designation from Mercedes-Benz, entered a Japanese automaker's supply chain for the first time through GAC Toyota's bZ3X, and at the Beijing Auto Show, 56 models from 24 brands used its solutions. Its foundation is solid, but pricing pressure has come along with it.

Why It Ultimately Earned 88.86 Million Net

Net profit of 88.865 million yuan, up 234.9% year over year, marking five consecutive quarters of GAAP profitability. Looking at just this line, it is indeed impressive.

But this money did not all come from selling lidar. Interest plus investment income in the first half totaled 152.4 million yuan, more than net profit itself; strip that out, and the core business is at a loss.

Still, breaking it down by quarter, the core business is moving in a better direction. In the second quarter, the lidar core business generated 66 million yuan in operating profit, but the new SGI business still lost 64 million yuan in the quarter. Offset against each other, the operating level barely broke even, and only with investment income did net profit turn positive. So "still at a loss once you strip out wealth management income" refers to the entire first half; looking only at the second quarter, the loss gap was already narrowing.

Cash flow points in the same direction. Operating net outflow in the first half was 103 million yuan, much narrower than 265 million yuan in the same period last year, but still negative—the books show profit, while operations are draining cash. This has been the pattern for years: net outflow of 696 million yuan in 2022, barely positive in 2023 and 2024, and another outflow of 265 million yuan in the first half of 2025. Profit converting into cash has consistently been weak, suggesting Hesai's bargaining power in the industrial chain is still limited. Fortunately, it has 7.051 billion yuan in cash on the books, so there is no short-term pressure.

After Trading Price for Volume, Where Is the New Growth?

Work from Creator Alliance, reviewed and approved.