SCHEDULE 13D: Hesai Group Founders Consolidate Control with New Concert Party Agreement, Director Sells Shares

Hesai Group's co-founder and CTO, Shaoqing Xiang, along with two other founders, have entered into a Deed of Concert Party Arrangement to consolidate voting control, while Xiang also reported recent sales of Class B ordinary shares.

Summary

• Shaoqing Xiang, a co-founder, Director, and Chief Technology Officer of Hesai Group, filed a Schedule 13D disclosing beneficial ownership.
• On April 24, 2025, Mr. Shaoqing Xiang, Dr. Yifan Li, and Dr. Kai Sun entered into a Deed of Concert Party Arrangement.
• Under this Deed, the parties agree to consult and unanimously exercise all voting rights and powers of control over Hesai Group's resolutions.
• As a result of the Deed, Shaoqing Xiang is deemed to have shared voting power over 27,163,892 shares, representing 20.5% of the Issuer's combined Class A and Class B ordinary shares as of March 31, 2025.
• This shared voting power includes 8,890,603 Class A shares held by Galbadia Limited (wholly owned by Mr. Xiang), 165,031 Class B shares beneficially owned by Mr. Xiang, and 18,108,258 Class A shares from Dr. Li's and Dr. Sun's entities.
• Galbadia Limited, wholly owned by Mr. Xiang, beneficially owns 8,890,603 Class A ordinary shares, representing 6.7% of the combined class.
• Mr. Shaoqing Xiang, through Galbadia Limited, sold a total of 842,503 Class B ordinary shares in the form of ADSs in the open market between March 13, 2025, and March 27, 2025, at weighted average prices ranging from US$18.3 to US$21.5 per ADS.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. The concert party agreement suggests enhanced stability and unified control among the founders, which can be viewed favorably for long-term strategic alignment. However, the recent share sales by a key founder introduce a slight negative aspect, balancing the overall sentiment.

Positives

• The Deed of Concert Party Arrangement consolidates voting control among the co-founders, potentially leading to more stable and unified strategic decision-making for Hesai Group.
• The agreement formalizes the historical relationship of acting in concert among the co-founders, providing clarity on governance.

Negatives

• Shaoqing Xiang, through Galbadia Limited, sold a significant number of Class B ordinary shares (842,503 ADSs) in the open market during March 2025, which could be perceived as a reduction in direct commitment or a move to monetize holdings.

Risks

• The concentration of voting power among a small group of founders, while potentially stabilizing, could also limit the influence of other shareholders in corporate governance matters.
• Potential for disagreements among the concert party members, although the Deed aims for unanimous consensus, could lead to internal conflicts affecting company direction.

Future Outlook

The Deed of Concert Party Arrangement is set to remain in force until all parties agree to terminate it by deed, or until any party ceases to beneficially hold any interests in the Company. The document does not provide forward-looking statements regarding the company's business operations or financial performance.

Industry Context

This filing primarily concerns the internal corporate governance and ownership structure of Hesai Group, rather than broader industry trends. The consolidation of control among founders is a company-specific event that may impact internal decision-making and stability within the lidar technology sector.

Corporate Governance

Related Party Transactions

• The Deed of Concert Party Arrangement is a related party transaction between three co-founders (Dr. Yifan Li, Dr. Kai Sun, and Mr. Shaoqing Xiang) who are also key personnel of Hesai Group. This agreement governs their collective voting power and control over the Issuer's affairs.

Stakeholder Impact

• Shareholders: The consolidation of voting power among the founders may lead to more stable governance but could also reduce the influence of other shareholders on corporate decisions.
• Management: The agreement ensures unified direction from the founding management team on key strategic and operational matters.
• Employees: A stable and unified leadership could provide clearer direction and stability for employees, though no direct impact is specified.

Next Steps

• The Deed of Concert Party Arrangement will remain in effect until terminated by mutual agreement or if a party ceases to hold interests in the Company.
• The parties to the Deed will continue to consult and exercise unanimous voting rights on Proposed Resolutions of the Issuer.

Key Dates

Keywords

Hesai Group, Schedule 13D, Beneficial Ownership, Concert Party Arrangement, Shaoqing Xiang, Corporate Governance, Share Sales, Voting Rights, Class A Shares, Class B Shares, SEC Filing