Core views:
The company released the 2023 annual report and the 2024 quarterly report. 24Q1 two-wheelers, all-terrain vehicles, and lawnmower robots were quickly released. In 24Q1, the company achieved revenue of 2.56 billion yuan (YoY +54.2%), net profit attributable to mother of 140 million yuan (YoY +675.3%), and net profit of non-return to mother of 142 million yuan (YoY +16874.4%). The acceleration in performance growth is mainly due to the low 23-year base, and the rapid deployment of two-wheelers, all-terrain vehicles, lawnmower robots, etc. According to the 24Q1 quarterly report, (1) electric two-wheelers achieved revenue of 1.19 billion yuan (YoY +119%) and sold 417,000 units (YoY +126%).
(2) All-terrain vehicle revenue of 220 million yuan (YoY +90%), sales volume of 50,000 units (YoY +94%).
(3) The lawnmower robot's revenue was 180 million yuan (YoY +267%), and the sales volume was 33,000 units.
No. 9 is a global leader in the field of intelligent short transportation. The company was founded in 2012, started with an electric scooter business, joined the Xiaomi ecosystem in 2014, and wholly acquired Segway, the original scooter, in 2015, and quickly became a global leader in intelligent short traffic. Currently, the company's business covers various fields such as electric scooters, scooters, intelligent delivery robots, electric motorcycles, electric bicycles, and all-terrain vehicles. In 2023, the company's revenue reached 10.22 billion yuan (+1.0% YoY), and net profit to mother reached 60 billion yuan (+32.5% YoY).
24Q1 The company's gross margin increased, compounded by a contraction in the cost ratio, and increased profitability. 24Q1's gross profit margin of 30.5% (YOY+2.3pct) is mainly driven by product structure optimization and increased gross margin for electric two-wheelers and all-terrain vehicles. In terms of the cost ratio, the 24Q1 company's expense ratio was 23.1% (YOY-4.2pct). The reduction in the cost ratio further promoted the increase in net interest rate. The 24Q1 company's net interest rate was 5.3% (YoY+4.2pct).
Profit forecast and investment advice: The company is a global leader in intelligent short transportation. Net profit returns to mother is expected to increase 47%, 23%, and 24% year-on-year in 2024-26. The latest closing price corresponds to PE33.5x in 2024. Referring to the growth rate of performance and the valuation level of comparable companies, the 2024 PE valuation was given 40 times, corresponding to a reasonable value of 49.20 yuan/CDR. It was covered for the first time, and a “gain” rating was given.
Risk warning: technology research and development risk, international business risk, exchange rate fluctuation risk.