Citi published a research report, initiating a 90-day upward catalyst observation on YADEA (01585.HK), projecting that its wholesale volume in the first half of 2025 will reach between 8.7 million to 8.8 million electric bicycles, in line with market expectations, estimating the wholesale volume for the first five months to be close to 7 million units. To reflect better economies of scale, improved product mix, streamlined product lines, and increased operational efficiency, the bank expects its net profit per unit for the first half to be between 180 to 185 RMB, resulting in a net profit of 1.57 billion to 1.63 billion RMB for the company in the first half, an increase of 52% to 58% year-on-year.
The bank anticipates that additional requirements from the national government for electric two-wheeler manufacturers will eliminate small manufacturers, allowing large manufacturers to gain a larger market share starting next year, equivalent to 7 million to 8 million units, with YADEA, as the industry leader, expected to benefit the most. A 'Buy' rating is given, with a target price of 22.5 HKD.
