Yadi Holdings: An electric two-wheeler leader that “makes good cars for the world”. Yadi is mainly engaged in R&D, production and sales of electric two-wheelers and related products. The products mainly include electric two-wheelers, electric tricycles, graphene lead-acid batteries, sodium-ion batteries and their components. Revenue in 2023 was 34.763 billion yuan, with an average compound growth rate of 19.15% in 2013-2023; net profit to mother was 2.64 billion yuan, with an average compound growth rate of 28.05% in 2013-2023.
The electric two-wheeler industry has ushered in new development opportunities. Domestic industry regulations are getting stricter, and there is still room for the leading share to increase: China's electric two-wheeler industry has reached a mature stage, with over 0.35 billion vehicles in 2024. The “New National Standard” was officially implemented in 2019, and a new draft for comments was issued in September 2024; the revised version of the mandatory national standard “Electric Bicycle Electrical Safety Requirements” was publicly solicited for comments from May 30 to June 28, 2024; the mandatory national standard “Technical Specification for Lithium Ion Batteries for Electric Bicycles” is scheduled to be officially implemented on November 1, 2024. As of 2022, the CR3 of the electric two-wheeler industry reached 57.6%; relevant policies continue to be introduced to further regulate the industry, and market concentration is expected to further increase. Overseas “the world is vast”, and the Southeast Asian market is blessed: Southeast Asia has about 0.25 billion motorcycles; the penetration rate of motorcycle households is as high as 75%. The low penetration rate and high market potential of electric motorcycles are the main characteristics of the Southeast Asian electric two-wheeler market.
Domestic business: A veteran electric two-wheeler leader, which is expected to gain new vitality. 1) Returning to the essence of the product, the company paid more attention to the product itself, and the high-end product process remained unchanged; by the end of 2023, Yadi Holdings had more than 1,000 R&D experts and more than 1,900 patents. At the same time, focusing on the continuous improvement of battery technology, a number of innovative batteries have been launched, and the “Extremely Sodium-1” sodium-ion battery was officially released in 2023. Furthermore, in order to better implement high-end products, the company is stepping up efforts to optimize the supply chain and further reduce costs and increase efficiency.
2) The importance of single store efficiency has increased. By the end of 2023, Yadi had more than 4,000 distributors and their sub-distributors, more than 40,000 sales points, and significant channel advantages. At the same time, it actively organizes and sponsors various events and carries out various marketing activities. In 2023, the company's sales expenses were 1.436 billion yuan, and the sales expense ratio reached 4.13%. 3) Diversified revenue sources. The company has gradually increased its business layout in the post-industrial chain. A wide range of sales outlets also provide guarantees for its after-sales service. The power exchange business is expected to become a new gripper; at the same time, it is actively launching new models such as electric tricycles.
Overseas business: Follow the “localization” route and go overseas with production capacity at the same time as the brand. The company actively promotes the business layout of the Southeast Asian market. In 2024, Yadi built an overseas production base in Bac Giang, Vietnam. It is scheduled to be put into operation in 2025, with a design capacity of 2 million electric motorcycles per year. At the same time, Yadi's intelligent production and research base in Indonesia will be built in 2026. In 2023, Yadi will form an exclusive strategic cooperation with dealer Indomobil in the Indonesian market. In addition to this, the company is also active in various markets such as Europe, and has actively participated in many international exhibitions.
Profit forecast and rating: We expect the company's net profit for 24-26 to be 2.261, 3.021, and 3.499 billion yuan, respectively, -14.4%, +33.6%, and +15.8%. The current (December 16, 2024) closing price corresponds to 18.9 and 14.1 times PE in 24-25. As a leading electric two-wheeler company, refer to comparable companies to give the company a PE valuation of 15 to 16 times 2025, corresponding to a reasonable value range of 14.56 to 15.53 yuan HK$15.58 to HK$16.62 (exchange rate: RMB 1 = HK$1.07), giving it an “superior to the market” rating.
Risk warning: The impact of new mobility tools; downstream demand growth falls short of expectations; industry competition intensifies.