Exhibit 99.3

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Hesai Group, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

Hesai Group

禾賽科技^*

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(HKEX Stock Code: 2525)

(NASDAQ Stock Ticker: HSAI)

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO
THE REVISION OF ANNUAL CAP UNDER THE REVISED SUPPLY
OF PRODUCTS FRAMEWORK AGREEMENT

AND

NOTICE OF 2026 SECOND EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 6 to 21 of this circular. A letter from the Independent Board Committee is set out on page 22 of this circular. A letter from the Independent Financial Adviser is set out on pages 23 to 37 of this circular.

The EGM will be held at No. 28, Ciyun Road, Yangcheng Lake Peninsula, Weiting Town, Suzhou Industrial Park, Jiangsu Province, People’s Republic of China on Friday, August 28, 2026 at 1:30 p.m. (Beijing time). Notice of convening the EGM is enclosed and published on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (investor.hesaitech.com).

A form of proxy for use at the EGM is also enclosed and published on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (investor.hesaitech.com). Holders of record of the Company’s Shares on the Company’s register of members as of the close of business on the Share Record Date (Hong Kong time) are cordially invited to attend the EGM in person. Holders of the Company’s ADSs as of the close of business on the ADS Record Date (New York time) are cordially invited to submit your voting instructions to Deutsche Bank Trust Company Americas. Whether or not you propose to attend and vote at the said meeting, please complete, sign, date, and return the accompanying form of proxy to the Company’s share registrar in Hong Kong, Tricor Investor Services Limited (for holders of Shares) or your voting instructions to Deutsche Bank Trust Company Americas (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. For the avoidance of doubt, holders of treasury shares (if any) have no voting rights at the Company’s general meeting(s). Tricor Investor Services Limited must receive the form of proxy by no later than 48 hours before the time appointed for the EGM on Wednesday, August 26, 2026 at 1:30 p.m. (Hong Kong time) at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and Deutsche Bank Trust Company Americas must receive your voting instructions by the time and date specified in the ADS voting instruction card no later than 10:00 a.m., New York time, on Tuesday, August 18, 2026 to enable the votes attaching to the Class B Ordinary Shares represented by your ADSs to be cast at the EGM.

July 31, 2026

CONTENTS

Pages

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

Hesai Group

禾賽科技^*

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(HKEX Stock Code: 2525)

(NASDAQ Stock Ticker: HSAI)

July 31, 2026

To: the Shareholders of the Company

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE
REVISION OF ANNUAL CAP UNDER THE REVISED SUPPLY OF

PRODUCTS FRAMEWORK AGREEMENT
AND

NOTICE OF 2026 SECOND EXTRAORDINARY GENERAL MEETING

Reference is made to the announcements of the Company dated March 25, 2026, April 10, 2026 and July 31, 2026 in relation to the Existing Supply of Products Framework Agreement and Revised Supply of Products Framework Agreement entered into between Hesai and Sharpa and the revision of the Existing Annual Cap thereunder.

The Board anticipates that the Existing Annual Cap under the Existing Supply of Products Framework Agreement for the year ending December 31, 2026 will not be sufficient to meet the business needs of the Group and proposes to revise the Existing Annual Cap.

The purpose of this circular is to provide you with, among other things, (i) further details of the Revised Supply of Products Framework Agreement and the Revised Annual Cap; (ii) a letter from the Independent Board Committee to the Independent Shareholders in relation to the transactions contemplated under the Revised Supply of Products Framework Agreement (including the Revised Annual Cap); (iii) a letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the transactions contemplated under the Revised Supply of Products Framework Agreement (including the Revised Annual Cap); and (iv) a notice convening the EGM.

Reference is made to the announcements of the Company dated March 25, 2026, April 10, 2026 and July 31, 2026 in relation to the Existing Supply of Products Framework Agreement and Revised Supply of Products Framework Agreement entered into between Hesai and Sharpa.

Due to the continuous growth and expansion of the sales volume and scale of the products as well as corresponding manufacturing and support services in relation to the integration of robotic actuators supplied by the Group to Sharpa, the Board anticipates that the transactions under the Existing Supply of Products Framework Agreement will exceed the Existing Annual Cap, and proposes to enter into the Revised Supply of Products Framework Agreement to revise the Existing Annual Cap thereunder.

Principal Terms of The Revised Supply of Products Framework Agreement

On July 31, 2026 (after trading hours), the Company entered into the Revised Supply of Products Framework Agreement with Sharpa to revise the Existing Annual Cap under the Existing Supply of Products Framework Agreement.

The principal terms of the Revised Supply of Products Framework Agreement are set out below:

Subsequent to the entering into of the Existing Supply of Products Framework Agreement on March 25, 2026, newly published public financial data for comparable companies within the robotics and precision actuator sector (such as recent annual reports for the year ended December 31, 2025, published prospectuses of newly listed companies and new listing application proofs) became available. Based on the newly available dataset, an updated transfer pricing analysis conducted by an independent Big Four accounting firm engaged by the Company had established higher arm’s length margin benchmarks. The interquartile range of the three-year weighted average cost-plus margins of comparable companies from 2022 to 2024 was approximately 34% to 68%, with a median of the interquartile range of approximately 42.86%, while the updated interquartile range of the three-year weighted average cost-plus margins of comparable companies from 2023 to 2025 in the updated transfer pricing analysis report is approximately 49% to 83%, with the median of the interquartile range being approximately 72.99%, indicating a general upward trend in industry gross margins. The Company has accordingly updated its cost-plus rates to ensure alignment and compliance with these prevailing market standards, thereby ensuring that the Group’s pricing remains within the range of margins earned by independent companies performing similar functions. The Company has reviewed the selection criteria applied by the independent Big Four accounting firm in identifying the comparable companies for the updated transfer pricing analysis report (such as the geographic scope, R&D expenditure ratio and principal business activities of the comparable companies) and considers such selected companies to be comparable to the Company. Having assessed the qualifications, experience and independence of the Big Four accounting firm, the Board considers that the Big Four accounting firm possesses the relevant transfer pricing expertise and is independent from the Company.

The commercial rollout of Sharpa’s products has demonstrated stronger-than-expected commercial performance, reflecting the premium positioning and strong market acceptance of the end products. As the supplier of critical core components and the strategic manufacturing partner of Sharpa, the Company considers that it is commercially reasonable and in accordance with the arm’s length principle that the Group’s pricing reflects its proportional contribution to this enhanced value creation.

The Directors considered the above ranges to be fair and reasonable as (a) they were determined with reference to an updated independent transfer pricing analysis based on cost-plus margin rates of comparable companies providing similar products and/or services, and (b) the agreed margin rate to be adopted for each transaction under the Revised Supply of Products Framework Agreement will be determined through arm’s length negotiations within such benchmark ranges.

Save as disclosed above in the sections headed “Pricing Policy” and “Others” and the revision of the Existing Annual Cap, all other terms and conditions of the Revised Supply of Products Framework Agreement shall remain unchanged.

Historical Figures and Proposed Revised Annual Cap

Historical Amount

The historical transaction amount in respect of the transactions under the Existing Supply of Products Framework Agreement for the period from March 25, 2026 to June 30, 2026 was approximately RMB42 million.

Proposed Revised Annual Cap

The Existing Annual Cap and the Revised Annual Cap for the transactions under the Revised Supply of Products Framework Agreement are as follows:

Basis of The Revised Annual Cap

The above Revised Annual Cap for the Revised Supply of Products Framework Agreement was determined after taking into account the factors as set out below:

The estimated breakdowns of the Existing Annual Cap and the Revised Annual Cap are set out below:

The Board (including the independent non-executive Directors) is of the view that the Revised Annual Cap for the transactions contemplated under the Revised Supply of Products Framework Agreement is fair and reasonable and in the interests of the Company and the Shareholders as a whole, for the following reasons:

Reasons for and Benefits of The Revised Supply of Products Framework Agreement and The Revised Annual Cap

The Group is a global tech company and a leader in 3D perception. Leveraging full-stack proprietary ASIC capabilities and an integrated R&D-testing-manufacturing approach, it has established industry-leading positions across core physical AI domains, including ADAS-equipped passenger vehicles, autonomous mobility, spatial intelligence, embodied AI, as well as industrial, agricultural, and service robots. The transactions under the Revised Supply of Products Framework Agreement will broaden the Group’s product portfolio, enhance its market positioning in adjacent business areas and may, over time, diversify the Company’s revenue base and provide an additional source of growth over the medium to long term. The Group also expects to leverage its existing manufacturing, operational and supply chain capabilities in developing the new business, which may improve resource utilization and operational efficiency.

Since March 25, 2026, the Group has been supplying LiDAR products and robotic actuators as well as providing corresponding manufacturing and support services relating to the integration of robotic actuators into Sharpa’s dexterous hands and other embodied intelligence products to Sharpa. The Board anticipates that the Existing Annual Cap under the Existing Supply of Products Framework Agreement will be exceeded for the reasons set out below, and proposes to revise the Existing Annual Cap:

Subsequent to the entering into of the Existing Supply of Products Framework Agreement between Hesai and Sharpa on March 25, 2026, the commercialization of Sharpa’s dexterous hands products has accelerated at an unprecedented rate. Notably, Sharpa has successfully established strategic alliances and secured substantial commercial contracts with leading global technology enterprises. These developments in Sharpa’s business had only materialized after the initial projections for the Existing Supply of Products Framework Agreement were formulated, resulting in an unanticipated and material surge in customer orders for Sharpa. Consequently, Sharpa’s demand for the robotic actuators, LiDAR products, and related manufacturing and support services provided by the Group has increased significantly beyond the original estimates at the time of entering into the Existing Supply of Products Framework Agreement, necessitating a substantially higher transaction volume for the remainder of the financial year.

In addition to the increase in transaction volume under the Revised Supply of Products Framework Agreement, while the pricing policy for the LiDAR products of the Group remains the same, the Company has updated the cost-plus margin rates applicable to the provision of robotic actuators and manufacturing and support services to better reflect the current operational costs and prevailing market conditions.

In particular, the Group has continued to increase its research and development expenditures to ensure that its proprietary products incorporated into the embodied intelligence products, including dexterous hands, supplied to Sharpa maintain industry-leading technological and quality standards. The upward adjustments in the cost-plus margin are intended to offset these increased research and development costs and to ensure that the Group’s net profitability remains at a reasonable and sustainable level. Concurrently, the global robotics market has experienced robust and steady expansion, with increasing adoption of advanced robotic systems across a range of industries, further reinforcing the commercial rationale for the revised pricing terms. This upward adjustment in pricing terms also contributes proportionally to the higher projected transaction amount under the Revised Annual Cap.

In light of the aforementioned rapid business expansion of Sharpa and the updated cost-plus pricing margins, the Existing Annual Cap of RMB100 million is no longer sufficient to accommodate the estimated transaction volume under the Revised Supply of Products Framework Agreement. The Directors estimate that the maximum actual transaction amount will reach approximately RMB300 million for the year ending December 31, 2026. The Directors consider that the Revised Annual Cap will facilitate the uninterrupted supply of components of the Group to Sharpa to capture this market opportunity. Accordingly, the Board considers that the transactions contemplated under the Revised Supply of Products Framework Agreement are (i) in the ordinary and usual course of business, (ii) on normal commercial terms or better, and (iii) are in the interests of the Company and its Shareholders as a whole.

The Company will continue to carry out adequate supervision over the transaction amounts in respect of the Revised Annual Cap going forward, with a view to ensuring that necessary measures and appropriate actions will be promptly taken in order to comply with the applicable requirements under the Listing Rules.

Implications Under The Listing Rules

As at the Latest Practicable Date, the Co-Founders together indirectly held majority voting rights in Sharpa. Therefore, Sharpa is a connected person of the Company pursuant to Rule 14A.07(4) of the Listing Rules. Accordingly, the transactions contemplated under the Revised Supply of Products Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios calculated with reference to the Revised Annual Cap under the Revised Supply of Products Framework Agreement is higher than 5%, the transactions contemplated under the Revised Supply of Products Framework Agreement and the Revised Annual Cap are subject to the reporting, annual review, announcement, and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

An Independent Board Committee has been established by the Company to advise the Independent Shareholders on the transactions contemplated under the Revised Supply of Products Framework Agreement and the Revised Annual Cap.

An Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

Information Of The Group and The Parties

The Group

The Group is a global tech company and a leader in 3D perception. Leveraging full-stack proprietary ASIC capabilities and an integrated R&D-testing-manufacturing approach, the Group has established industry-leading positions across core physical AI domains, including ADAS-equipped passenger vehicles, autonomous mobility, spatial intelligence, embodied AI, as well as industrial, agricultural, and service robots. The Group has established offices in Shanghai, Palo Alto, and Stuttgart, and operates in-house factories in China and Thailand, with customers spanning more than 40 countries. As the AI-driven Fourth Industrial Revolution accelerates, the Group is committed to becoming a key enabler of physical AI — digitizing the real world and redefining how humans and robots perceive and act.

The Parties

Hesai is a company incorporated in the PRC with limited liability and a subsidiary of the Company. Hesai is a leader in 3D perception solutions. It has been primarily engaged in the R&D, manufacturing and sales of LiDARs. In the first quarter of 2026, Hesai previewed its Strategic Growth Initiative (SGI) businesses, including Kosmo, its physical AI data infrastructure, and robotic actuation modules.

Sharpa is a company incorporated in the PRC with limited liability and is primarily engaged in the research and development of AI robotics.

Internal Control Measures

The Company has adopted and will continue to follow the internal control measures and procedures below to ensure that the transactions contemplated under the Revised Supply of Products Framework Agreement are conducted in accordance with the terms thereunder, on normal commercial terms and on terms that are fair and reasonable, and the Revised Annual Cap will not be exceeded:

Board Approval

As at the Latest Practicable Date, each of the Co-Founders is indirectly interested in the shares of Sharpa and therefore has a material interest in the relevant transactions. As such, they abstained from voting on the relevant Board resolutions in respect of the Revised Supply of Products Framework Agreement and Revised Annual Cap.

Save as disclosed above, none of the Directors has a material interest in the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap), and none of them had abstained from voting on the relevant Board resolution.

Voting By Poll

Pursuant to the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. An announcement on the poll results will be published by the Company after the EGM in the manner prescribed under the Listing Rules.

The EGM will be held at No. 28, Ciyun Road, Yangcheng Lake Peninsula, Weiting Town, Suzhou Industrial Park, Jiangsu Province, People’s Republic of China on Friday, August 28, 2026 at 1:30 p.m. (Beijing time).

The notice of the EGM is set out on pages 46 to 47 of this circular and published on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (investor.hesaitech.com).

Holders of record of the Company’s Shares on the Company’s register of members as of the close of business on the Share Record Date (Hong Kong time) are cordially invited to attend the EGM in person. Holders of the Company’s ADSs as of the close of business on the ADS Record Date (New York time) are cordially invited to submit your voting instructions to Deutsche Bank Trust Company Americas. Whether or not you propose to attend and vote at the said meeting, please complete, sign, date, and return the accompanying form of proxy to the Company’s share registrar in Hong Kong, Tricor Investor Services Limited (for holders of Shares) or your voting instructions to Deutsche Bank Trust Company Americas (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. For the avoidance of doubt, holders of treasury shares (if any) have no voting rights at the Company’s general meeting(s). Tricor Investor Services Limited must receive the form of proxy by no later than 48 hours before the time appointed for the EGM on Wednesday, August 26, 2026 at 1:30 p.m. (Hong Kong time) at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and Deutsche Bank Trust Company Americas must receive your voting instructions by no later than 10:00 a.m., New York time, on Tuesday, August 18, 2026 to enable the votes attaching to the Class B Ordinary Shares represented by your ADSs to be cast at the EGM.

As at the Latest Practicable Date, the Co-Founders and their associates, in aggregate, held 215,990,888 Class A Ordinary Shares and 1,320,248 Class B Ordinary Shares. Pursuant to Rule 14A.36 of the Listing Rules, any Shareholder with a material interest in the relevant continuing connected transactions is required to abstain from voting on the relevant resolution(s) at the EGM. As the Co-Founders together indirectly hold majority voting rights in Sharpa as at the Latest Practicable Date, each of the Co-Founders and their associates, are required to abstain from voting on the resolution in respect of the continuing connected transactions contemplated under the Revised Supply of Products Framework Agreement with Sharpa and the Revised Annual Cap at the EGM.

Your attention is drawn to (i) the letter from the Independent Board Committee set out on page 22 of this circular which contains its recommendation to the Independent Shareholders regarding the resolution to approve the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap), (ii) the letter from the Independent Financial Adviser set out on pages 23 to 37 of this circular which contains its advice in relation to the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap) to the Independent Board Committee and the Independent Shareholders, and (iii) the additional information set out in Appendix I to this circular.

The Directors (including the independent non-executive Directors forming the Independent Board Committee), having taken into account the advice from the Independent Financial Adviser, consider that the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap thereunder) is fair and reasonable in so far as the Company and the Independent Shareholders are concerned. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the EGM.

The following is the text of the letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the Revised Supply of Products Framework Agreement and the Revised Annual Cap.

July 31, 2026

To: the Independent Shareholders

Dear Sir or Madam,

Hesai Group

禾賽科技^*

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(HKEX Stock Code: 2525)

(NASDAQ Stock Ticker: HSAI)

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE REVISION OF ANNUAL CAP UNDER THE REVISED SUPPLY OF PRODUCTS FRAMEWORK AGREEMENT

We refer to the circular of the Company dated July 31, 2026 (the “Circular”) of which this letter forms part. Unless the context specifies otherwise, capitalised terms used herein shall have the same meanings as defined in the Circular.

We have been appointed by the Board as the Independent Board Committee to consider and advise the Independent Shareholders as to whether the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap) are (a) fair and reasonable; (b) on normal commercial terms or better and in the ordinary and usual course of business of the Group; (c) in the interests of the Company and the Shareholders as a whole; and (d) whether to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap).

We wish to draw your attention to (i) the letter from the Independent Financial Adviser containing details of the advice from the Independent Financial Adviser, together with the principal factors and reasons it has taken into consideration, as set out on pages 23 to 37 of the Circular; and (ii) the letter from the Board as set out on pages 6 to 21 of the Circular.

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Revised Supply of Products Framework Agreement (including the transactions contemplated thereunder and the Revised Annual Cap).

Yours faithfully,

For and on behalf of the Independent Board Committee

Hesai Group

The following is the text of the Letter from Alliance Capital Partners Limited to the Independent Board Committee and the Independent Shareholders, prepared for the purpose of inclusion in this circular.

	Room 03, 7/F, Worldwide House
	19 Des Voeux Road Central
	Hong Kong

July 31, 2026

CONTINUING CONNECTED TRANSACTIONS

IN RELATION TO THE REVISION OF ANNUAL CAP

UNDER THE REVISED SUPPLY OF PRODUCTS FRAMEWORK AGREEMENT

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the Revised Supply of Products Framework Agreement and the related proposed Revised Annual Cap, details of which are set out in the letter from the board (the “Letter from the Board”) contained in the circular dated July 31, 2026 issued by the Company to the Shareholders (the “Circular”), of which this letter forms part. Unless otherwise defined, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

As set out in the Letter from the Board, it is anticipated that the Existing Annual Cap for the transactions contemplated under the Existing Supply of Products Framework Agreement for the year ending December 31, 2026 will not be sufficient to meet the business needs of the Group due to the continuous growth and expansion of the sales volume and scale of the products as well as corresponding manufacturing and support services, and accordingly it is proposed to revise the Existing Annual Cap.

As at the Latest Practicable Date, the Co-Founders together indirectly held majority voting rights in Sharpa. Therefore, Sharpa is a connected person of the Company pursuant to Rule 14A.07(4) of the Listing Rules. Accordingly, the transactions contemplated under the Revised Supply of Products Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios calculated with reference to the Revised Annual Cap under the Revised Supply of Products Framework Agreement are higher than 5%, the transactions contemplated under the Revised Supply of Products Framework Agreement and the Revised Annual Cap are subject to the reporting, annual review, announcement, and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

THE INDEPENDENT BOARD COMMITTEE

As at the Latest Practicable Date, the Independent Board Committee, comprising all of the independent non-executive Directors of the Company (namely Ms. Zhang Yi, Mr. Ren Jia and Dr. Wang Hui), has been established to advise the Independent Shareholders as to whether the Revised Supply of Products Framework Agreement, the transactions contemplated thereunder and the Revised Annual Cap are fair and reasonable, on normal commercial terms or better and in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole. In this regard, we, Alliance Capital Partners Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on this matter.

In the two years prior to this appointment, we did not have any other engagement with the Company or its associates. Apart from the normal advisory fee payable to us in connection with our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, there are no relationships or interests with the Company, the Group, Sharpa, or any of their respective associates, or any other parties that could reasonably be regarded as relevant to our independence, and we have not been involved in any discussion pertaining to the transactions contemplated under the Revised Supply of Products Framework Agreement. We consider that we are independent under Rule 13.84 of the Listing Rules.

BASIS OF OUR ADVICE

In formulating our recommendations, we have reviewed, amongst other things, the Revised Supply of Products Framework Agreement, the Existing Supply of Products Framework Agreement, the annual report of the Company for the year ended December 31, 2025 (the “Annual Report”) and the information contained in the Circular. We have relied on the statements, information and representations contained in the Circular and the information and representations provided to us by the Directors and senior management of the Company (collectively, the “Management”). We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the Management are true and accurate at the time they were made and will continue to be true and accurate as at the date of the despatch of the Circular.

The Management collectively and individually accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive and there are no other matters the omission of which would make any statement contained in the Circular misleading. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Management. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided to us so as to provide a reasonable basis for our opinion. We have not, however, carried out any independent verification of the information provided by the Management, nor have we conducted an independent investigation into the business and affairs or the prospects of the Company, the Group, Sharpa, or any of their respective associates. As set out in the Letter from the Board, we understand that the Management shall ensure the information referred to in the Circular continues to be true, accurate and complete as at the date of the EGM. The Company will notify the Shareholders of any material changes as soon as practicable, if any.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources which are the latest information publicly available to the best of our knowledge, the sole responsibility of Alliance Capital Partners Limited is to ensure that such information has been correctly extracted from the relevant sources.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion on the Revised Supply of Products Framework Agreement, the transactions contemplated thereunder and the Revised Annual Cap, we have taken into consideration the following principal factors and reasons:

As disclosed in the Letter from the Board, the Group is a global tech company and a leader in 3D perception. Leveraging full-stack proprietary ASIC capabilities and an integrated R&D-testing-manufacturing approach, the Group has established industry-leading positions across core physical AI domains, including ADAS-equipped passenger vehicles, autonomous mobility, spatial intelligence, embodied AI, as well as industrial, agricultural, and service robots. The Group has established offices in Shanghai, Palo Alto, and Stuttgart, and operates in-house factories in China and Thailand, with customers spanning more than 40 countries. As the AI-driven Fourth Industrial Revolution accelerates, the Group is committed to becoming a key enabler of physical AI – digitizing the real world and redefining how humans and robots perceive and act.

Hesai is a company incorporated in the PRC with limited liability and a subsidiary of the Company. Hesai is a leader in 3D perception solutions. It has been primarily engaged in the R&D, manufacturing and sales of LiDARs. In the first quarter of 2026, Hesai previewed its Strategic Growth Initiative (SGI) businesses, including Kosmo, its physical AI data infrastructure, and robotic actuation modules.

Set out below are certain key consolidated financial information of the Company, as extracted from the Annual Report:

The Group achieved an increase in net revenues of RMB950.4 million, or 45.8%, from RMB2,077.2 million for the year ended December 31, 2024 to RMB3,027.6 million for the year ended December 31, 2025. As disclosed in the Annual Report, this growth was mainly driven by the surge in revenue from LiDAR products by 52.7%. However, other product revenues, engineering design, development and validation service and solution revenue and other service revenues decreased by 50.3%, 64.0% and 21.2%, respectively.

For the year ended December 31, 2025, the revenue of the Group was mainly generated from sales of LiDAR products, contributing 98.2% of the Group’s total revenue. Revenue from LiDAR products surged by 52.7%, driven by robust demand both in China and globally. This growth was fueled by substantial shipment expansion, with units sold rising from approximately 501,900 in 2024 to approximately 1,620,400 in 2025. The volume surge offset a contraction in the average selling price, which decreased from approximately US$530 per unit to approximately US$260 per unit as the product mix shifted toward a higher concentration of lower-priced ADAS shipments.

Gross profit increased by 43.0%, from RMB884.6 million in 2024 to RMB1,265.1 million in 2025, mainly due to the strong performance in sales of LiDAR products. However, the gross profit margin slightly decreased from 42.6% in 2024 to 41.8% in 2025, primarily due to a decrease in revenues from high-margin non-recurring engineering services and a higher proportion of ADAS LiDAR sales, which typically carry a lower gross profit margin than Robotics LiDARs, partially offset by effective cost and scale optimisation on both product lines. The Group recorded a turnaround from a net loss of RMB102.4 million in 2024 to a net profit of RMB435.9 million in 2025 and such improvement was primarily attributable to the aforementioned revenue growth.

Sharpa is a company incorporated in the PRC with limited liability and is primarily engaged in the research and development of AI robotics.

Pursuant to the Revised Supply of Products Framework Agreement, Hesai has agreed to supply LiDAR products and robotic actuators to Sharpa as well as provide corresponding manufacturing and support services which relate to the integration of robotic actuators into Sharpa’s dexterous hands and other embodied intelligence products during the period from July 31, 2026, being the date of the Revised Supply of Products Framework Agreement to December 31, 2026. The pricing policy of the Revised Supply of Products Framework Agreement and our assessments are set out as follows:

The Group is a global tech company and a leader in 3D perception. Leveraging full-stack proprietary ASIC capabilities and an integrated R&D-testing-manufacturing approach, it has established industry-leading positions across core physical AI domains, including ADAS-equipped passenger vehicles, autonomous mobility, spatial intelligence, embodied AI, as well as industrial, agricultural, and service robots. The transactions contemplated under the Revised Supply of Products Framework Agreement will broaden the Group’s product portfolio, enhance its market positioning in adjacent business areas and may, over time, diversify the Company’s revenue base and provide an additional source of growth over the medium to long term. The Group also expects to leverage its existing manufacturing, operational and supply chain capabilities in developing the new business, which may improve resource utilization and operational efficiency.

Since March 25, 2026, the Group has been supplying LiDAR products and robotic actuators as well as providing corresponding manufacturing and support services relating to the integration of robotic actuators into Sharpa’s dexterous hands and other embodied intelligence products to Sharpa. The Board anticipates that the Existing Annual Cap under the Existing Supply of Products Framework Agreement will be exceeded for the reasons set out below, and proposes to revise the Existing Annual Cap:

Subsequent to the entering into of the Existing Supply of Products Framework Agreement between Hesai and Sharpa on March 25, 2026, the commercialization of Sharpa’s dexterous hand products has accelerated at an unprecedented rate. Notably, Sharpa has successfully established strategic alliances and secured substantial commercial contracts with leading global technology enterprises. These developments in Sharpa’s business had only materialized after the initial projections for the Existing Supply of Products Framework Agreement were formulated, resulting in an unanticipated and material surge in customer orders for Sharpa. Consequently, Sharpa’s demand for the robotic actuators, LiDAR products, and related manufacturing and support services provided by the Group has increased significantly beyond the original estimates at the time of entering into the Existing Supply of Products Framework Agreement, necessitating a substantially higher transaction volume for the remainder of the financial year.

In addition to the increase in transaction volume under the Revised Supply of Products Framework Agreement, while the pricing policy for the LiDAR products of the Group remains the same, the Company has updated the cost-plus margin rates applicable to the provision of robotic actuators and manufacturing and support services to better reflect the current operational costs and prevailing market conditions.

In particular, the Group has continued to increase its research and development expenditures to ensure that its proprietary products incorporated into the embodied intelligence products, including dexterous hands, supplied to Sharpa maintain industry-leading technological and quality standards. The upward adjustments in the cost-plus margin are intended to offset these increased research and development costs and to ensure that the Group’s net profitability remains at a reasonable and sustainable level. Concurrently, the global robotics market has experienced robust and steady expansion, with increasing adoption of advanced robotic systems across a range of industries, further reinforcing the commercial rationale for the revised pricing terms. This upward adjustment in pricing terms also contributes proportionally to the higher projected transaction amount under the Revised Annual Cap.

In light of the rapid business expansion of Sharpa and the updated cost-plus pricing margins, the Existing Annual Cap of RMB100 million is no longer sufficient to accommodate the estimated transaction volume under the Revised Supply of Products Framework Agreement. The Directors estimate that the maximum actual transaction amount will reach approximately RMB300 million for the year ending December 31, 2026. The Directors consider that the Revised Annual Cap will facilitate the uninterrupted supply of components of the Group to Sharpa to capture this market opportunity.

Having considered that (i) Hesai is principally engaged in the manufacturing and sales of LiDARs and R&D; (ii) our review of the projection of the transaction amounts based on the historical supply amount to Sharpa and market demand for the Group’s products; and (iii) the upward adjustments in pricing terms with reference to the transfer pricing analysis report prepared by the TP Consultant, the Directors consider and we concur that the transactions contemplated under the Revised Supply of Products Framework Agreement are (i) in the ordinary and usual course of business, (ii) on normal commercial terms or better, and (iii) in the interests of the Company and its Shareholders as a whole.

We have reviewed and discussed with the Management their projection for determining the annual cap for the transactions contemplated under the Revised Supply of Products Framework Agreement (i.e. the Revised Annual Cap) for the period from March 25, 2026 to December 31, 2026. The estimated breakdowns of the Existing Annual Cap and the Revised Annual Cap are set out below:

We understand from the Management that the Revised Annual Cap has been determined after taking into account the following:

We have discussed with the Management and reviewed the projected sales of the Products to Sharpa for the six months ending December 31, 2026 and noted that such projections have been determined based on:

In respect of the buffer of approximately 10%, we noted from other Hong Kong listed companies’ announcements/circulars regarding continuing connected transactions that the incorporation of buffer of approximately 10% in the proposed annual caps is not uncommon. Accordingly, we consider the applied buffer to be justifiable to facilitate smooth operations of the Group. Having considered that the Revised Annual Cap has been determined based on the historical and expected transaction amounts for the period from March 25, 2026 to December 31, 2026, and having taken into account (a) the accelerated commercialisation and the unforeseen surge in customer demand of the Group’s products and manufacturing and support services; and (b) the adjustments to the pricing terms, including the cost-plus margin applicable to robotic actuators and to the manufacturing and support services, which will both increase to approximately 70% to 80%, and based on the analysis described above, we are of the view that the Revised Annual Cap is fair and reasonable.

As disclosed in the Letter from the Board, the Company has adopted internal control procedures for its continuing connected transactions, including those under the Revised Supply of Products Framework Agreement. The relevant business, finance and legal teams will review each transaction document to ensure that the transactions are conducted on fair and reasonable terms and in accordance with the agreed pricing policy. For LiDAR products, the Company will compare the proposed terms with at least three recent sales to independent third parties; for robotic actuators and manufacturing and support services, the Company will review the relevant cost components and verify that the applicable margin is determined by reference to the benchmark set out in the transfer pricing analysis reports prepared by the TP Consultant. The Group will monitor transaction amounts and utilisation of the Revised Annual Cap on a monthly basis, with internal escalation procedures triggered when utilisation reaches 75% of the Revised Annual Cap. The internal audit department, the independent non-executive Directors and the external auditor of the Company will conduct annual reviews of the continuing connected transactions. In addition, each of the Co-Founders, being materially interested in the transactions, abstained from voting on the relevant Board resolutions. The Directors are therefore of the view that the Company’s internal control measures are effective and sufficient to safeguard the interests of the Company and the Shareholders as a whole.

In addition, the independent non-executive Directors will, pursuant to Rule 14A.55 of the Listing Rules, review, among other things, whether the transactions under the Revised Supply of Products Framework Agreement are conducted on normal commercial terms and the auditors of the Company will, for the purpose of Rule 14A.56 of the Listing Rules, review, among other things, whether the transactions under the Revised Supply of Products Framework Agreement are conducted in accordance with the terms therein.

Based on the above procedures, we are of the view that there are sufficient internal control procedures in place to ensure the continuing connected transactions are conducted on normal commercial terms and not prejudicial to the interests of the Company and the minority Shareholders.

RECOMMENDATIONS

Having considered the principal factors and reasons above, we are of the view that (i) the transactions contemplated under the Revised Supply of Products Framework Agreement will be conducted in the ordinary and usual course of business; (ii) the terms of the Revised Supply of Products Framework Agreement are on normal commercial terms; (iii) the Revised Annual Cap is fair and reasonable; and (iv) the Revised Supply of Products Framework Agreement is in the interests of the Company and the Shareholders as a whole so far as the Independent Shareholders are concerned.

Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolutions to approve the Revised Supply of Products Framework Agreement, and the Revised Annual Cap at the EGM.

Yours faithfully,

For and on behalf of

Alliance Capital Partners Limited
Alyssa Ng

Managing Director

Ms. Alyssa Ng is licensed person under the SFO to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities and has more than 10 years’ experience in participation of and advising in various initial public offerings and transactions involving companies listed in Hong Kong, including but not limited to the provision of independent financial advisory services regarding connected transactions.

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

As at the Latest Practicable Date and in accordance with the records of the Company maintained in accordance with the SFO and the Listing Rules, the interests and short positions of the Directors or chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which are: (i) required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, including interests and short positions which the Directors and the chief executive of the Company are taken and deemed to have under such provisions of the SFO; or (ii) required to be and are recorded in the register required to be kept under Section 352 of the SFO; or (iii) as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 to the Listing Rules (the “Model Code”) were as follows:

Long positions in the Shares, underlying Shares and debentures of the Company

Notes:

Save as disclosed above, as far as the Directors are aware and as at the Latest Practicable Date, none of the Directors and the chief executive of the Company and their respective associates had or was deemed to have any interests, in the long position or short position in the Shares, underlying Shares and debentures of the Company or any of its associated corporations which was required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions in which he/she was taken or deemed to have under such provisions of the SFO); (ii) which was required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (iii) which was required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

As at the Latest Practicable Date, the following persons (other than Dr. Yifan Li, Dr. Kai Sun and Mr. Shaoqing Xiang whose interests have been disclosed above in part (a)), had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO or as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO:

Notes:

Save as disclosed above, as far as the Directors are aware and as at the Latest Practicable Date, the Company has not been notified by any persons (other than a Director or chief executive of the Company) who had an interest or a short position in the Shares or the underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

As at the Latest Practicable Date, none of the Directors and their respective associates has engaged in any business that competes or is likely to compete, either directly or indirectly, with the business of the Group as required to be disclosed pursuant to the Listing Rules.

The Directors confirm that, as at the Latest Practicable Date, they are not aware of any material adverse change in the financial or trading position of the Group since December 31, 2025, being the date to which the latest published audited consolidated financial statements of the Company were made up.

As at the Latest Practicable Date, none of the Directors had entered, or proposed to enter into a service contract with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

As at the Latest Practicable Date, none of the Directors had any interest, directly or indirectly, in any assets which had been, since December 31, 2025, being the date on which the latest audited consolidated accounts of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired, disposed of by or leased to any member of the Group.

Save for the Revised Supply of Products Framework Agreement disclosed in this circular, none of the Directors was materially interested in any contract or arrangement subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.

The following are the qualifications of the expert who has been named in this circular and whose advice or opinion is contained in this circular:

Alliance Capital Partners Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which they respectively appear.

As at the Latest Practicable Date, Alliance Capital Partners Limited (a) did not have any direct or indirect interest in any assets which had been acquired, disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since December 31, 2025, being the date to which the latest audited financial statements of the Group were made up; and (b) was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

On April 7, 2023, the Company and certain of its officers, directors, authorized U.S. representative, and underwriters in its February 2023 initial public offering were named as defendants in a putative securities class action filed in the U.S. District Court for the Eastern District of New York, captioned Pacella v. Hesai Group, et al., (Case No. 1:23-cv-02634). The plaintiff in this case alleges that Company’s registration statement and prospectus, or the Offering Documents, filed in connection with its February 2023 initial public offering in the United States contained false or misleading statements in violation of Sections 11, 12(a)(2) and 15 of the U.S. Securities Act. In February 2024, the case was transferred to U.S. District Court for the Southern District of New York, under the case caption Pacella v. Hesai Group, et al., (Case No. 1:24-cv-00876). On November 3, 2025, the Court appointed lead plaintiff. On November 13, 2025, lead plaintiff filed an amended complaint. On December 29, 2025, the Defendants filed a motion to dismiss the amended complaint, and briefing on the motion to dismiss was completed on January 27, 2026. On February 18, 2026, the Court denied in part and granted in part the motion to dismiss. As the case is still in its preliminary stage, the Company cannot predict its timing, outcome, potential damages, or expenses that may be incurred.

On January 31, 2024, the Company was placed on the list of Entities Identified as Chinese Military Companies Operating in the United States under Section 1260H of the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021 by the United States Department of Defense (“DoD”). On May 13, 2024, the Company filed a complaint to challenge the listing, alleging that DoD exceeded its authority under Section 1260H, acted arbitrarily and capriciously under the Administrative Procedure Act, and violated the U.S. Constitution in both adding and failing to remove us from the Section 1260H List. After filing the lawsuit, the Company received DoD’s decision memorandum, which the Company believes fails to justify the accusation that it is associated with the Chinese military. In light of the ongoing harms caused by the listing, the Company asked the DoD to agree to an expedited summary judgment briefing schedule, and on July 3, 2024, the Company filed a motion for summary judgment. On October 15, 2024, DoD removed the Company from the Section 1260H List, but on the same day, added the Company back to the Section 1260H List based on a new rationale. The Company believes that the decision memorandum for the second listing still fails to justify the accusation that it is associated with the Chinese military. Therefore, the Company filed an amended complaint challenging the second listing on the ground that it violates the Administrative Procedure Act and the U.S. Constitution on November 15, 2024, and a motion for summary judgment on December 9, 2024. On March 20, 2025, the court held a hearing on our summary judgment motion in Washington, D.C. On July 11, 2025, the U.S. District Court for the District of Columbia issued a decision upholding the DoD’s designation of us as a “Chinese Military Company”. The Company believes that the DoD’s designation lacks both factual and legal bases. On July 13, 2025, the Company filed Notice of Appeal to the U.S. Court of Appeals, challenging the District Court’s decision. On March 19, 2026, the U.S. Court of Appeals held an oral argument in our appeal in Washington, D.C.

As at the Latest Practicable Date, the Company remained on the Section 1260H List and the Company is unable to predict the outcome of the appeal.

Save as disclosed above, as at the Latest Practicable Date, none of the members of the Group was engaged in litigation or claim of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

The Existing Supply of Products Framework Agreement and the Revised Supply of Products Framework Agreement will be available on the website of the Stock Exchange (www.hkexnews.hk) and the Company (investor.hesaitech.com) for a period of 14 days from the date of this circular.

Hesai Group

禾賽科技^*

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)

(HKEX Stock Code: 2525)

(NASDAQ Stock Ticker: HSAI)

Unless otherwise indicated, the capitalized terms used in this notice shall have the same meaning as those defined in the circular of Hesai Group (the “Company”) dated July 31, 2026 (the “Circular”).

NOTICE IS HEREBY GIVEN that the EGM of the Company will be held at No. 28, Ciyun Road, Yangcheng Lake Peninsula, Weiting Town, Suzhou Industrial Park, Jiangsu Province, People’s Republic of China on Friday, August 28, 2026 at 1:30 p.m. (Beijing time) for the following purposes:

ORDINARY RESOLUTION

The passing of the above resolution requires approval by a simple majority of the votes cast by the Independent Shareholders present and voting in person or by proxy at the EGM. The quorum of the EGM shall be one or more members holding in aggregate not less than 10 per cent (10%) of all votes attaching to all issued Shares, present in person or by proxy and entitled to vote at the EGM.

FORMS OF PROXY AND ADS VOTING CARDS

A holder of Shares as of the Share Record Date may appoint proxy(ies) to exercise his or her rights at the EGM. A holder of ADSs as of the ADS Record Date will need to instruct Deutsche Bank Trust Company Americas, the depositary of the ADSs, as to how to vote the Class B Ordinary Shares represented by the ADSs. Please refer to the form of proxy (for holders of Shares) or ADS voting card (for holders of ADSs), both of which are available on our website at investor.hesaitech.com.

Holders of record of the Company’s Shares on the Company’s register of members as of the Share Record Date are cordially invited to attend the EGM in person. Your vote is important. You are urged to complete, sign, date, and return the accompanying form of proxy to us (for holders of Shares) or your voting instructions to Deutsche Bank Trust Company Americas (for holders of the ADSs) as promptly as possible and before the prescribed deadline if you wish to exercise your voting rights. We must receive the form of proxy by no later than 48 hours before the time appointed for the EGM, on Wednesday, August 26, 2026 at 1:30 p.m. (Hong Kong time) at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong to ensure your representation at the EGM; and Deutsche Bank Trust Company Americas must receive your voting instructions by no later than 10:00 a.m., New York time, on Tuesday, August 18, 2026 to enable the votes attaching to the Class B Ordinary Shares represented by your ADSs to be cast at the EGM.

Hong Kong, July 31, 2026

As of the date of this notice, the Board comprises: (i) Dr. Yifan Li, Dr. Kai Sun, Mr. Shaoqing Xiang and Ms. Cailian Yang as the executive Directors; and (ii) Ms. Yi Zhang, Mr. Jia Ren and Dr. Hui Wang as the independent non-executive Directors.