After falling for several days and hitting a new low, Lobbe Electric Vehicle (LOBO.US) finally bounced back with a single-day surge of almost 30% on high volume.

The Intelligent Finance app observes that the company's stock price has continued to fall since June 14, with a cumulative decline of over 15% in just three days. On June 18, the stock price once fell to $1.76, a new low since its listing. However, the next trading day, June 20, the stock price opened high and went up sharply, rising nearly 50% at one point during the day, and then still rose by 29.5% for the whole day. The turnover soared to $714,600, a significant increase from the average daily turnover of less than $100,000 before.

Judging from the news, the significant increase in Lobbe electric vehicle's trading volume may be related to its rising orders. According to the Intelligent Finance app, Lobbe electric vehicle has recently successfully obtained the largest order from Ecuadorian wholesalers in 2024, including electric tricycles, electric bicycles, and new solar-powered electric tricycles. In recent years, the company has actively expanded into the Latin American market and is expected to drive the company's performance to further improve with the expansion of its overseas market share.

Under a high base, the company is caught in a dilemma of declining revenue and net profit.

According to the Intelligent Finance app, Lobbe electric vehicle is an electric vehicle manufacturer and retailer located in Wuxi, Jiangsu Province, and the company designs, develops, manufactures and sells electric bicycles, electric light motorcycles, electric three-wheelers, and electric off-road shuttle vehicles, such as golf carts and mobility scooters for the elderly and people with disabilities.

The company also provides automotive news and entertainment software development and design services to its customers, but it does not provide in-car entertainment services directly to end users. By using the company's cutting-edge technology in connectivity, multimedia interaction systems, and artificial intelligence, the company will provide users with convenient, affordable, and enjoyable driving experiences.

At present, from the retail channel's point of view, Lobbe electric vehicle's main sales model is through dealers. As of December 31, 2023, the company has developed approximately 152 dealerships in more than 10 provinces in China. Among them, the sales network is mainly concentrated in Tianjin, Beijing, Hebei, Jiangsu, Zhejiang, Anhui, and Hunan. At the same time, the company has 50 foreign dealers worldwide and relies on third-party logistics service providers to assist with delivering online direct sales orders and some overseas orders.

It is worth noting that Lobbe electric vehicle fell into the dilemma of declining revenue and net profit in its first annual report after listing.

According to the financial report, in 2023, Lobbe electric vehicle achieved revenue of US$15.5 million, a year-on-year decrease of 15.3% compared with US$18.3 million in the same period of 2022; the net profit was US$986,500, while it was US$1.1153 million in the same period last year, a year-on-year decrease of 11.55%.

The company stated that the decline in performance in 2023 was mainly due to the high base in 2022. It is reported that the company's surplus inventory accumulated during the epidemic period led to a high base within the reporting period.

The Intelligent Finance app observed that although facing revenue pressure, the company's net profit margin increased from 6.1% in 2022 to 6.4% in 2023. The company's management emphasized that the increase in net profit margin not only reflects the improvement in operating efficiency but also reflects better inventory management and expense control. The measures taken by the company to optimize its product lineup and enhance its production technology have paid off by providing users with a more convenient, affordable, and enjoyable driving experience.

Could the 'Going Global' Strategy be a Solution?

From the perspective of the industry market, as one of the major production and consumption countries of two-wheeled electric vehicles, three-wheeled electric vehicles, and non-road four-wheeled electric buses, China's new energy electric vehicle industry has a large scale and stable growth.

After nearly thirty years of development, the domestic two-wheeled electric vehicle industry has now entered a mature period, and the trend of homogenization and low-price competition in the industry is becoming increasingly prominent. With the landing of the new national standard in 2019 to promote the standardized and high-quality development of the industry, the 'Matthew Effect' will further enhance the market concentration.

According to the data from the Prospective Industry Research Institute, as far as the current competition pattern of China's two-wheeled electric vehicle market is concerned, with sales in 2022, Yadea and Aima together accounted for 43.2% of the market share, and the third-highest sales are Tailin electric vehicles, whose market share is about 14.1%. The top ten companies in the industry occupy more than 85% of the market share. Therefore, Lobbe Electric Vehicle, with a relatively low market share, is unlikely to gain a stable competitive advantage.

'Going Global' has become an important choice for Lobbe electric vehicle to improve its performance against this background.

In recent years, with the strict emission standards and government initiatives for green travel in many countries overseas, the demand for high-performance bicycles, sports bicycles, and electric mountain bikes has been driven.

According to data from commercial research companies, the total market value of electric bicycles, electric tricycles, and electric skateboards worldwide 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 data, the global number of electric bicycles will reach 36.5 million in 2022 and is expected to reach 77.3 million in 2030 with a compound annual growth rate of 10%.

Facing huge demand in the overseas market, the export market of Chinese electric vehicles has also ushered in new opportunities. According to data from the China Electric Vehicle Association, the export value of China's electric two-wheeled vehicle industry has increased from $5.47 billion in 2019 to $7.35 billion in 2022. Analysis shows that in the future, relying on many electric bicycle production bases such as Wuxi in Jiangsu Province and Tianjin, and through strong supply chain advantages as well as the Chinese government's greater support for electric bicycle exports policies, our country will continue to achieve rapid growth.

Specifically for Robiem Electric Vehicles, the company's business scale is expanding rapidly since its successful listing in March 2024. The company's management pointed out that since the beginning of this year, the company has successfully added more than ten new dealer customers, acquired potential orders worth more than $5 million, and has received new payments of more than $1 million. In order to meet the surge in market demand, the company has recently accelerated production expansion and added two high-capacity assembly lines. It is expected that these two new assembly lines will be put into production at the new factory in Wuxi in early May this year. It is believed that the new assembly lines will enable the company to add new demand products to its product mix and stack production improvements with other assembly lines. It is expected that the company's total production capacity will increase by nearly 20% in 2024.

In the first half of 2024, the company will focus on its regional expansion plan and continue to meet the growing interests of dealers in its expanding product lineup in the distribution network. 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, thereby driving the sustained growth of the company's performance.

Overall, the good development of overseas business has led to a significant rush of market funds, indicating investors bullish on the company's future prospects. As industry heat rises, Robiem Electric Vehicles, 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 if it wants to compete with large companies in the industry, therefore its performance ceiling is also obvious.