Company profile
The company is a global leader in intelligent short transportation. It acquired Segway, the originator of global balance scooters, in 2015. After years of technology accumulation, it has outstanding R&D advantages. It has now formed a wide range of products including electric scooters, electric scooters, electric two-wheelers, all-terrain vehicles, lawn mowing robots, and service robots. In 2023, the company's revenue was 10.22 billion yuan/ +1.0%; attributable to mother 60 million yuan/ +32.5%; deducted from mother 410 million yuan/ +8.5%.
Investment logic
I am optimistic that the company's own brand & new business will increase revenue and profit will enter the upward channel.
Looking at the sub-model, Xiaomi's distribution/to B business is gradually bottoming out, and its own brand business is growing rapidly. The company's own brands achieved revenue of 8.19 billion yuan in 23 years, +31.4% year-on-year. The proportion of customized product distribution channels/to-B channels where revenue decelerated fell to 4.3%/15.6% respectively, which is expected to have limited drag on subsequent results.
By product, ① Two-wheelers: After the mandatory replacement period of the new national standard in some provinces and cities was pushed back, industry demand continued to grow in 24-25 years. Small and medium-sized brands have developed good leading brands. The company's two-wheelers are positioned as high-end and intelligent products, and the growth momentum is good. As stores are encrypted and scale increases, the gross margin of two-wheelers is expected to continue to increase. Revenue is expected to increase by 50% + in 24 years with channel development and new product launches. In addition, there is still room for improvement in the number of channels and profitability of leading companies in the target industry in the long term. Also, new e-bikes were released in 25 years. ② All-terrain vehicles: Newly entered the US market in 23Q3 (previously mainly in Europe), and the new hybrid flagship SSV and UTV were launched and sold in '24. The product advantage is outstanding, and revenue is expected to achieve rapid growth and profit in '24. ③ Lawnmower robot: At the beginning of '24, the company launched a more cost-effective second-generation product. It is expected that with the improvement of product strength and the establishment of new markets, revenue will double in 24 and reverse losses. ④ Commercial robots: It is still in the early stages of development, and future revenue is expected to continue to grow. In addition, the company cooperates with Nvidia to develop and sell autonomous mobile robots, which is expected to increase the company's valuation. ⑤ Retail scooters & scooters: As the company's basic market business, the retail business is expected to maintain steady growth in the future, supported by strong product competitiveness and Segway brand strength. We expect the profit logic to dominate in the future due to the company's size effect.
Profit forecasts, valuations, and ratings
The company's revenue for 2024-2026 is expected to be 132.6/159.7/19.01 billion yuan, respectively, +29.7%/+20.4%/+19.0% year-on-year; net profit to mother is 7.3/10.0/1.32 billion yuan, respectively, +21.4%/+31.9% year-on-year; revenue per depository certificate is 10.2/14.0/18.5 yuan, corresponding PE is 29.9/21.6/16.4x, respectively. Considering the company's growth under diversified business development and the rapid release of performance, 1.05 xPEG was given for 24 years, with a target price of 32.70 yuan, and a “buy” rating.
Risk warning
Competition in the industry intensified, new developments fell short of expectations, the RMB exchange rate fluctuated, and there was a risk that major shareholders would reduce their holdings.