Hesai Group

In February 2023, Hesai conducted its IPO, selling approximately 10 million American Depository Shares (“ADSs”) at $19.00 per ADS.

The next month, on March 16, 2023, Hesai issued a press release announcing its unaudited fourth quarter and full year 2022 financial results. Therein, the Company revealed that in the final quarter before its IPO, the Company experienced a decrease in its gross margin due to “the increased shipments of lower-margin ADAS LiDAR products during the early ramp-up stage with lower in-house plant capacity utilization rate.”

On this news, Hesai’s share price fell $1.55, or 10.2%, to close at $13.69 per share on March 16, 2023, thereby injuring investors.

The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Hesai Group’s gross margin decrease was caused by a lower in-house utilization rate; (2) Hesai Group’s gross margin was 30% for the fourth quarter—which was completed over a month before the date of the amended registration statement; and (3) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.