Haitong Securities issued a research report stating that Yadea Holdings (01585) achieved revenue of 14.414 billion yuan in the first half of 2024, a year-on-year decrease of 15.4%, and a net income attributable to the parent company of 1.034 billion yuan, a year-on-year decrease of 12.9%.
The bank stated that in the first half of 2024, the company's revenue from electric two-wheelers (including electric bicycles & scooters) was 9.786 billion yuan, a year-on-year decrease of 19.9%; revenue from battery and charger business was 4.065 billion yuan, a year-on-year decrease of 9.6%; revenue from electric two-wheeler parts was 0.563 billion yuan, a year-on-year increase of 72.5%. Short-term company performance is under pressure, mainly due to 1) macroeconomic uncertainties and temporary market demand decline, and 2) distributor destocking. Therefore, the company's electric two-wheeler sales volume in the first half of 2024 H1 decreased by 22.3% year-on-year to 6.38 million units. However, from the monthly data, the company's electric two-wheeler sales volume gradually recovered in May-June 2024, and the sales trend is expected to improve.
The bank further pointed out that in the long term, the bank still bullish on the company's competitive advantage in the domestic market and overseas expansion space. In the first half of 2024, the electric two-wheeler industry's fire incidents attracted public attention and high-level attention from relevant government departments. The relevant government departments strengthened regulation by launching new national standards and updating existing standards, including charging facilities and batteries, among other aspects. The bank believes that the company focuses on product quality and continues to invest in core components for the development of new technologies, which is expected to enhance its competitiveness through high-quality products. At the same time, the company actively promotes the "Yadea" brand globally, and is expected to open up further growth opportunities.
The bank predicts that the company's net income for the years 2024-2026 will be 2.55 billion, 3.264 billion, and 3.792 billion yuan, respectively, with year-on-year changes of -3.4%, +28.0%, and +16.2%. The closing price at the moment corresponds to PE ratios of 13.7 and 10.7 for 2024-2025. As a leading electric two-wheeler company, referencing comparable companies, the bank gives the company a PE valuation of 14-15 times for 2024, corresponding to a reasonable value range of 11.47-12.29 yuan, or 12.62-13.52 Hong Kong dollars (exchange rate: 1 RMB = 1.10 HKD), and gives it a "outperform" rating.