Brief performance review
On April 24, 2024, the company disclosed its quarterly report results. In Q1 of '24, it achieved revenue of 2.56 billion yuan, +54.2% year over year; realized net profit of 140 million yuan, +675.3% year over year; realized net profit of 140 million yuan without return to mother, +16874.4% year over year.
Management analysis
The new business two-wheelers, all-terrain vehicles, and lawnmower robots all achieved high growth, and the ToB channel steadily rebounded. 1) Two-wheelers: 2024Q1 revenue of 1.19 billion yuan/ +119%, sales volume of 420,000 units/ +126%, average price 2,854 yuan/ -3%. Two-wheelers continued to grow at a high rate supported by strong competitiveness of new products. 2) Retail scooters: 2024Q1 revenue of 303 million yuan/ +8%, sales volume 150,000 units/ +21%, average price 1997 yuan/ -11%, retail scooters resumed positive growth. 3) All-terrain vehicles: 2024Q1 revenue of 215 million yuan/ +90%, sales volume of 55,500 units/ +94%, average price of 39,184 yuan/ -2%. Sales increased in the quarter with new product support and new channel expansion orders. 4) Lawnmower robot: 2024Q1 revenue of 180 million yuan/ +217%, a record high revenue in a single quarter, with sales volume of 33,300 units/ +268%, average price of 5438 yuan/ -14%. 5) TOB side: 2024Q1 revenue of 422 million yuan/ +6.6%, achieving positive growth after a year of adjustment and recovery. We are optimistic that the company's revenue will accelerate and profit levels will rise as the basic retail scooter business resumes growth in 24 years and the volume of new two-wheelers/all-terrain vehicles/lawnmowers.
The scale effect was evident due to rapid revenue growth, and profit levels increased year-on-year. 24Q1's gross margin was 30.5% /+2.3 pct. The obvious increase in gross margin was mainly due to continued growth in sales of products such as all-terrain vehicles and electric two-wheelers, and the scale effect was evident. 24Q1's sales/management/finance/R&D expense ratio was 10.7%/7.1%/-1.0%/6.4%, compared to +0.4pct/-1.2pct/-1.2pct. The decline in sales, management, and R&D expenses was mainly due to scale effects; under the combined influence, the company's 24Q1 net interest rate was 5.3% /+4.2pct, and the profit level increased year-on-year.
Profit Forecasts, Valuations, and Ratings
The company is expected to achieve net profit of 7.3/10.0/1.32 billion yuan in 2024-2026, +21.4%/+38.2%/+31.9% year-on-year respectively; the PE corresponding to the company's current price is 31.3/22.7/17.2x, maintaining a “buy” rating.
Risk warning
The risk of exchange rate fluctuations, the growth of new products falling short of expectations, and the risk of major shareholders reducing their holdings.