Notice summary

Incidents. The company released its 24Q3 quarterly report. 24Q3 achieved revenue of 3.92 billion, +36.1%/-12.2%, net profit to mother of 0.373 billion, +49.0%/-13.6% YoY, net profit of 0.363 billion before net income excluding non-return to mother, and +46.6%/-12.6% YoY.

Downstream demand is driving steady revenue growth, and profits continue to exceed expectations. The company released its 24Q3 quarterly report. 24Q3 achieved revenue of 3.92 billion, +36.1%/-12.2%, net profit of 0.373 billion, +49.0%/-13.6% year-on-month, net profit of 0.363 billion yuan after year, +46.6%/-12.6% year-on-month, gross profit margin of 31.57%, and +0.75pct month-on-month. Downstream demand drove steady revenue growth and continued profit exceeding expectations.

International competitions continue to be famous, consolidating the leading position in the two-wheeler industry. The company actively participated in top international events, driving brand building with racing. It officially competed in the world's top motorcycle race in 2022, becoming the first Chinese manufacturer to land in the MOTOGP Moto3250cc competition. It won the first race in Qatar in the first half of 2024, winning the first championship trophy belonging to a Chinese manufacturer in the 75-year history of MotoGP's top motorcycle series. In the first half of 2024, the news of MOTOGP Moto3 spring wind power was repeated over and over again; creating a characteristic locomotive sport represented by Chunfeng culture. All-terrain vehicles have been ranked first in the export value of domestic brands for many years. In the first half of 2024, all-terrain vehicle exports accounted for 71.75% of domestic exports of similar products; the US market share continued to increase, and the European market share ranked first; motorcycles focused on 250CC and above medium- and large-displacement models, and >250CC straddle motorcycles remained at the forefront of the industry in sales, consolidating the leading position in the industry.

Profit forecast: We expect the company's revenue for 24-26 to be 14.5/17.4/20.3 billion yuan, respectively, with year-on-year growth rates of +20%/+17%; based on the company's downstream demand continuing to drive profitability improvement, we adjusted the 24-26 net profit forecast from 1.27/1.57/1.94 billion yuan to 1.38/1.66/1.94 billion yuan, with year-on-year growth rates of +37%/+20%/+17% respectively; maintaining the “buy” rating.

Risk warning: Profits fall short of expectations due to overseas disturbances such as exchange rates and freight charges, overseas demand falls short of expectations, overseas factory production capacity is climbing or operating less than expected, and public data used in research reports may be delayed or updated in a timely manner.