Jinwu Finance | Sinolink issued a research report indicating that during the growth and development cycle of the domestic two-wheeler industry driven by "national subsidies + new national standards," the share of quality leading enterprises is a more important competitive focus in this cycle. The bank predicts that total industry sales will recover and grow in 2025, with leading companies such as YADEA (01585) and Aima showing a rise in market share relying on high cost-performance products and advantages in the industry chain, while the market share of long-tail companies outside of the CR10 is projected to shrink.
The bank stated that going global is a second growth curve in the medium to long term, with an excellent business model ensuring stable dividend amounts. The company has a strong first-mover advantage in production capacity, the target demographic for products is gradually shifting toward Block Orders, and the sodium battery reserves have accumulated safety and efficiency advantages; on the channel side, active development is underway in offline stores in Vietnam, with the number of countries for exports reaching 100 in 2024. With excellent cash flow performance, the company’s dividend payout ratio is 51%/102% for 2023/2024. In 2024, the company's net income attributable to the parent is projected at 1.27 billion yuan (-52%), mainly due to disturbances from national inspections and the transitional period of national standard revisions, with dealers exhibiting a lower willingness to collect goods, new product launch activities hindered, inventory clearance and revenue from jiegoutiaozheng reduced, and costs remaining rigid. Current operations have normalized, with short-term restocking and new products driving a significant improvement in margins.
The bank predicts that the net income attributable to the parent will be 3.014/3.416/3.9 billion yuan for 2025-2027, year-on-year growth of +137%/+13%/+14%. Using a relative valuation method, the average PE of comparable companies for 2025-2027 is 16/14/13X, while the current stock price corresponds to a PE of 13/12/10X for 2025-2027. Considering the company's solid leading position in the industry, significant scale advantages, and considerable growth potential in R&D and overseas expansion, the bank assigns a 20 times P/E ratio for 2025, corresponding to a target price of 20.5 Hong Kong dollars, initiating coverage with a "Buy" rating.
