After falling for several days and hitting a new low, Lobe Electric Cars (LOBO.US) finally rebounded with a single-day explosive increase of nearly 30%.

Zhixin Finance APP noticed that the company's stock price continued to decline since June 14, falling more than 15% in just three days. On June 18th, the company's stock price once fell to $1.76, a new low since its listing. However, the next trading day, June 20th, the company's stock price opened high and went high, rising nearly 50% at its highest point. Although the increase subsequently fell back, it still rose 29.5% throughout the day. The turnover also soared to $714,600, a significant increase from the previous daily average of less than $100,000.

Considering the news, the large volume increase in Lobbe electric cars may be due to its recent successful acquisition of Ecuador's largest order for 2024, which includes electric tricycles, electric bicycles, and new solar-powered electric tricycles for the first time. In recent years, the company has actively expanded into the Latin American market and is expected to drive the company's performance to develop positively with the further expansion of the company's overseas market share.

Under the high base, the company fell into the dilemma of decreasing both revenue and net profit.

According to Zhixin Finance APP, Lobe electric cars is an electric car manufacturer and vendor located in Wuxi, Jiangsu. The company designs, develops, manufactures, and sells electric bicycles, electric light motorcycles, electric tricycles, and electric off-road four-wheel shuttle cars, such as golf carts and mobility vehicles for the elderly and disabled.

The company also provides customers with automotive information and entertainment software development and design services, but does not independently provide in-car entertainment services to end-users. By utilizing the company's cutting-edge technology in connectivity, multimedia interaction systems, and artificial intelligence, the company will provide users with a convenient, affordable, and enjoyable driving experience.

Currently, from the perspective of retail channels, Lobe electric cars mainly operates under a dealership model. As of December 31, 2023, it had developed about 152 dealers in more than 10 provinces in China. Among them, the sales network mainly concentrated in Tianjin, Beijing, Hebei, Jiangsu, Zhejiang, Anhui, and Hunan. The company also has 50 foreign dealers globally and helps deliver online direct sales orders and some overseas orders through third-party logistics service providers.

It is noteworthy that in the company's first annual report after listing, Lobe electric cars fell into the dilemma of decreasing both revenue and net profit.

According to the financial report, in 2023, Lobbe electric cars achieved a revenue of $15.5 million, a year-on-year decrease of 15.30% compared to $18.3 million in the same period in 2022. Net profit was $0.9865 million, while in the same period last year, it was $1.1153 million, a year-on-year decrease of 11.55%.

The company stated that the decline in 2023 performance was mainly due to the impact of the high base in 2022. It is reported that the company's excess inventory accumulated during the epidemic in the second half of 2022 led to a higher base during the period.

Zhixin Finance APP noted that although facing revenue pressure, the company's net margin increased from 6.1% in 2022 to 6.4% in 2023. The company's management emphasized that the growth in net margin not only reflects the improvement in operational efficiency but also reflects better inventory management and cost control. The company's measures to optimize its product lineup and enhance production technology have paid off by offering users a more convenient, affordable, and enjoyable driving experience.

Will the 'go-out' strategy be the cure?

From the perspective of the industry market, as one of the major producer and consumer countries of two-wheeled electric cars, three-wheeled electric cars, and non-road four-wheeled electric buses, China has a large and steadily growing new energy electric vehicle industry.

After nearly 30 years of development, the domestic two-wheeled electric vehicle industry has now entered a mature stage. The trend of homogenization and low-price competition in the industry has gradually emerged. With the landing of the new national standard in 2019 to promote industry standardization and high-quality development, the Matthew effect will further increase market concentration.

According to data from the Prospective Industry Research Institute, from the current competitive market structure of China's two-wheeled electric vehicle market, if sales volume is taken in 2022, Yadea and Aima, the two companies, together occupy 43.2% of the market share, whereas the third-most-sold product is the Tailin electric bicycle, whose market share is about 14.1%. The top ten companies in the industry hold more than 85% of the market share. Therefore, Lobe electric cars with a low market share may find it difficult to obtain a stable competitive advantage.

In such a context, 'going-out' has become an important choice for Lobe electric cars to improve its performance.

In recent years, under the strict emission standards and government initiatives for green transportation in various overseas countries, users' demand for high-performance bicycles, sports bicycles, and electric mountain bikes has been promoted.

According to the data from a commercial research company, the global market value of electric bicycles, electric tricycles, and electric skateboards is estimated to be $28 billion in 2023, and is expected to exceed $39 billion by 2028, with a compound annual growth rate of 6.6%. According to Statista, the number of electric bicycles worldwide reached 36.5 million in 2022 and is expected to reach 77.3 million by 2030 with a CAGR of 10%.

Facing huge demand in the overseas market, the Chinese electric vehicle export market has also ushered in new opportunities. According to data from the China Electric Vehicle Association, the export value of China's electric two-wheeler industry has risen from $5.47 billion in 2019 to $7.35 billion in 2022. Analysis shows that in the future, relying on numerous electric bicycle production bases in Wuxi, Jiangsu, Tianjin and other places, China will continue to achieve high-speed growth through strong supply chain advantages and greater support from the Chinese government's policies for exporting electric bicycles.

In March 2024, as the LUBE electric vehicle successfully went public, the company's business scale is also rapidly expanding. According to the management of the company, the company has successfully added more than ten new dealer customers this year, obtained potential orders worth more than $5 million, and has received new deposits of more than $1 million. To meet the surging market demand, the company has accelerated its production expansion by adding two high-capacity assembly lines. It is expected that these two assembly lines will be put into production at the new factory in Wuxi in early May of this year. It is believed that the new assembly lines will enable the company to add new demand products to its product portfolio and add the production improvements of other assembly lines. It is expected that the company's total production capacity will increase by nearly 20% by 2024.

In the first half of 2024, the company will focus on its regional expansion plan and will continue to meet the growing interest of its dealers in expanding its product lineup in the distribution network, and sales are expected to achieve year-on-year growth during this period. In addition, with the growth of the company's overseas market orders, its relevant market share is also expected to further expand, thus driving the company's continuous growth.

Overall, as the development of its overseas business continues to improve, the market funds show strong interest, indicating that investors are bullish about the company's future prospects. As the industry heats up, LUBE electric vehicle, as one of the participants, is expected to continue to benefit. However, it should be noted that the company has a relatively small market share, and lacks competitiveness in brand and other resources in order to compete with large companies in the industry, thus making the performance ceiling of the company more obvious.