The annual reports of listed companies of two-wheeled electric vehicles have been released one after another, and the inventory of old manufacturers such as Yadea Holdings and Emma Technology has been exhausted, and the performance growth has slowed down significantly or even negative growth, and they are facing the problem of how to grow. The new power brand Nine Company (689009), which is famous for its "intelligence" and comes from the Xiaomi ecological chain, has sprung up, achieving high double-digit growth in revenue and net profit.

After many years of rapid development in 2020, two-wheeled electric vehicles have entered a new stage of survival logic reconstruction.

Yadi is weak, and Nine runs wildly

In 2019, after the release of the "old national standard", the share of leading enterprises increased, and Yadea Holdings surpassed Emma Technology and became the leader in the two-wheeled electric vehicle industry. From 2020 to 2023, Yadea Holdings' revenue will increase from 19.36 billion yuan to 34.763 billion yuan, and the net profit attributable to the parent company will increase from 957 million yuan to 2.64 billion yuan.

From 2020 to 2023, the revenue growth rate slowed down from 61.76% to 11.92%, and the net profit growth rate slowed down from 89.64% to 22.17%, and in 2024, the revenue and net profit will turn down.

According to the financial report data disclosed a few days ago, Yadea Holdings will achieve revenue of 28.236 billion yuan in 2024, a year-on-year decrease of 18.77%; The net profit attributable to the parent company was 1.272 billion yuan, a sharp decrease of 51.81% year-on-year. Manager.com noted that this is also the first time since 2018 that Yadea Holdings has seen a decline in revenue and net profit.

As for the reason, Yadea Holdings explained in its annual report that it was mainly due to "unfavorable market sentiment and the decline in sales volume caused by the destocking cycle of dealers, and the reduction in the price of some existing models as part of the strategy of accelerating the inventory clearance of existing models in response to the adjustment of national standards." ”

The

decline in sales volume was significant, even as Yadea Holdings took price reduction measures.

In 2024, Yadea Holdings' total sales volume decreased by 21.18% from the same period last year to 13.0205 million units, of which electric bicycle sales decreased by 21.4% to 9.089 million units, and electric scooter sales decreased by 20.7% to 3.931 million units, a decline much higher than that of the industry as a whole, and the total domestic sales of electric two-wheelers in 2024 were 49.5 million units, a year-on-year decrease of 11.6%. In 2024, Yadea Holdings' inventory will increase by 33.91% year-on-year to 1.279 billion yuan.

Also with weak performance are Emma Technology and Luyuan Group.

According to the financial report data, Luyuan Group's revenue in 2024 will be about 5.072 billion yuan, a year-on-year decrease of 0.2%; gross profit was approximately $665 million, a decrease of 2.4% from $681 million in 2023; net profit was RMB116 million, a decrease of 20.3% from RMB145 million in 2023; After deducting the impact of share-based payment expenses, Luyuan Group's net profit in 2024 will be approximately RMB154 million, a decrease of 5.9% year-on-year.

Emma Technology's performance in 2024 will still maintain growth, with annual revenue of 21.606 billion yuan, a year-on-year increase of 2.71%; the net profit attributable to the parent company was 1.988 billion yuan, a year-on-year increase of 5.68%; The net profit after deduction was 1.792 billion yuan, a year-on-year increase of 1.54.

As the "second oldest" in the industry, the gap between the revenue scale of Emma Technology and Yadea Holdings is narrowing, and even the net profit has been surpassed.

However, if compared with itself, the slowdown in the growth of Emma Technology's revenue and net profit is obvious. As can be seen from the figure below, Emma Technology has basically maintained double-digit growth in both revenue and net profit before 2023, and it will be able to maintain growth in 2023 and 2024.

In contrast, new brands in the industry such as Nine Company are much more "beautiful".

In 2024, Nine's revenue will reach 14.196 billion yuan, a year-on-year increase of 38.87%; The net profit attributable to the parent company increased by 81.29% year-on-year to 1.084 billion yuan, and the net profit after deduction increased by 157.24% year-on-year to 1.062 billion yuan.

In 2024, its smart electric vehicle sales will be close to 2.6 million units, with a revenue of 7.211 billion yuan, and electric balance vehicles and electric scooters, robots, all-terrain vehicles, and other products and accessories will achieve revenue of 3.381 billion yuan, 895 million yuan, 976 million yuan, and 1.733 billion yuan respectively.

In addition, Maverick Electric, which is positioned as a high-end and intelligent product and is known as "two-wheeled Tesla" and "Hermes in the electric vehicle industry", will achieve operating income of 3.288 billion yuan in 2024, an increase of 24% compared with 2.652 billion yuan in the same period last year, and a net profit loss attributable to the parent company of 193 million yuan in the same period, narrowing the loss by 28.93%.

The narrowing of the loss was due to the increase in prices, and the revenue per electric vehicle in the Chinese market in the fourth quarter of 2024 was 3,544 yuan, and the price of a single vehicle increased by 10.2% year-on-year. However, at the same time, the gross profit margin of Maverick Electric in 2024 will only be 12.4%, a sharp decline from 19% in the previous year.

Maverick Electric explained that the decline in gross profit margin is mainly due to the increase in sales of high-end cars, and its gross profit margin is lower than that of low-end models; And the overseas market cost of Maverick Electric is high, and the price is low. The company's freight costs and tariffs in the international market have increased. The price of Maverick Electric in overseas markets is much lower than that in China, and the price has been continuously reduced since 2024.

Three key trends

After the Nanjing fire incident, the electric two-wheeler industry has become more regulated.

Since May 2024, the Ministry of Industry and Information Technology has successively issued the "Electric Bicycle Industry Standard Conditions", "Electric Bicycle Industry Standard Announcement Management Measures", and "Safety Technical Specifications for Lithium-ion Batteries for Electric Bicycles" (Lithium Battery New Regulations), which put forward higher quantifiable standards for the process equipment and product quality of electric bicycle enterprises, such as the original value of testing equipment is not less than 1 million yuan, the enterprise independently develops no less than 10 models per year, and the R&D expense rate is not less than 2%.

A series of new regulations have increased the pre-sales cost of two-wheeled electric vehicle manufacturers, raised the industry access threshold, will accelerate the probability of small and medium-sized factories eliminated, and the head enterprises can gain a larger market share in the survival of the fittest in the market, but this also means that the market competition in the leading enterprises or will be more intense, and the simple price war can no longer be exchanged for the improvement of sales and performance, Yadea Holdings is the best example.

And through the wild run of Nine Company, we can see the key trend of two-wheeled electric vehicles:

First, innovative brands such as Nine Company and Maverick Electric can overtake in the high-end price band curve under the condition that Yadea and Emma Technology have a high market share and first-mover advantage in the electric two-wheeler industry, mainly thanks to the trend of seizing the intelligence of high-end electric two-wheeled vehicles, so the development of products to intelligence and scene diversification may become the key to breaking the industry in the future.

Second, in the current situation of rising costs and small profits in the industry, relying only on the profitability of new car sales is not enough to support the long-term development of electric two-wheeler manufacturers, and the electric two-wheeler industry is facing the challenge of improving the profit structure while improving the customer experience.

Or look at the nine company, its revenue of accessories and other products was 1.733 billion yuan, a year-on-year increase of 11.69%, and the gross profit margin was also the highest among all products, reaching 39.62%, which means that the nine company is extending the industrial value chain to the full life cycle service of users, and has gradually moved the profit structure back.

Third, under the saturation of the domestic market and intensified competition, the international market will become an important growth driver. In 2024, the company's overseas revenue will reach 5.772 billion yuan, accounting for 40% of the total revenue.

Of course, at present, Yadea Holdings, Emma Technology and other two-wheeled electric vehicle companies have set up factories overseas, built production and research bases, opened flagship stores, and won strategic cooperation and other overseas strategies, but on the whole, overseas brand building, product planning and R&D localization, supply chain layout globalization, overseas channel development and cultivation and many other capabilities are still prominent.

References:

(1) White Paper on Electric Two-Wheeler Industry, Deloitte