Jingu Finance News | UBS group stated that they recently visited several electric two-wheeler companies and believed that the demand in the second half of the year is weak, mainly due to the national standard implemented on November 1st which appeared quite abruptly (without a transition period), leading to restricted supply along the entire value chain. In addition, strict regulations have made dealers cautious when making purchases, not daring to stock up in large quantities. So far, their trade-in policy performance has been poor. Therefore, a positive transformation in industry sales growth may not appear until the first half of 2025.

The bank pointed out that relevant companies are waiting for the release of new national standard policies, expected to be announced by the end of 2024, which may impose stricter regulations on the weight and speed of two-wheelers. Opinions vary among companies regarding whether the industry sales in 2025 can grow by 10-20%. Dealers' new product inventory is about one month, below the reasonable level of 2-3 months, and some dealers may still hold inventory of products that do not meet the new standards. In addition, there is strong demand for electric two-wheelers (ETWs) in the mid-to-high price range (>4,000 yuan), with brands like Ninebot, Niu, and ZEEHO by Zhejiang CFMOTO Power being the key players. Mass market brands like Yadea and Aima are strengthening their presence in this niche market, although they are still behind.

The bank believes that Yadea will benefit from the upgrade of the national standard for electric two-wheelers in 2025, the trade-in policy, and the increased industry concentration. More growth opportunities depend on its ability to break through in overseas markets. The bank maintains a "buy" rating with a target price of 16 Hong Kong dollars.