Tesla in the electric scooter - Niu Electric (NIU.US) is heading to the intersection.
According to Zhitong Finance APP, Niu Electric recently announced its fourth quarter and full-year financial results for 2021. According to the financial report, the company's revenue in 2021 was 3.705 billion yuan (RMB, the same below), compared with 2.444 billion yuan in the same period last year, a year-on-year increase of 51.6%. The net profit for the whole year was 226 million yuan, compared with 169 million yuan in the same period last year, an increase of 33.7% year-on-year. The net profit per ADS after dilution was RMB 2.81, compared with RMB 2.14 in the same period last year. In terms of sales volume of
, the total sales volume of Maverick products in 2021 was 1.0379 million units, a year-on-year increase of 72.5%. Sales volumes in the Chinese market and international markets reached 988,000 and 49,900 respectively.
However, the "three growths" of Niu Electric's sales, revenue and profit cannot be exchanged for the "bottom-bottom rebound". The company's stock price has fallen to $8.35 from its high of $53.38 in February 2021. It was quite like seeing him build a tall building, entertaining guests, and seeing his building collapse.
is concerned with "sinking", and the decline in profitability of bicycles
The reason why investors choose to sell Mavericks Electric stocks is not difficult to explain. Zhitong Finance APP noticed that since the second half of 2021, Niu Electric's profitability has shown a clear turning point. The company's revenue in Q3 2021 was 1.226 billion yuan, a year-on-year increase of 37.1%; net profit was 91.7124 million yuan, a year-on-year increase of only 14.6%. By Q4 2021, the company's revenue was 986 million yuan and a year-on-year increase of 46.7%, but the net profit in Q4 was only 47.6467 million yuan, a year-on-year decrease of 18.1%.
In fact, Niu Electric saw revenue increase but profit increase in the second half of 2021, and it was not because the company's sales growth slowed down. The financial report shows that taking Q4 2021 as an example, the sales volume of the company, including electric motorcycles, electric mopeds, electric scooters and electric bicycles, was 238,200 units, an increase of 58.3% year-on-year. Among them, sales in the Chinese market reached 20,500 vehicles, a year-on-year increase of 49.2%. The international market sales were 32,900 vehicles, an increase of 155.8% year-on-year.
By business, the company's electric scooter market revenue in Q4 2021 was 683 million yuan, a year-on-year increase of 47.9%; the international market revenue of electric scooters was 189 million yuan, a year-on-year increase of 63.8%; the sales and service revenue of accessories, spare parts and services was 114 million yuan, a year-on-year increase of 20.4%.
One of the main reasons for the slowdown in the growth of Maverick’s electric scooters and bicycles is the decline in the company’s electric scooters and bicycles. In Q4 2021, the company's bicycle revenue was 4,140 yuan, a year-on-year decrease of 7.3%. Among them, the revenue per electric scooter in the Chinese market was 3,326 yuan, a year-on-year decrease of 0.9%; the revenue per electric scooter in the international market was 5,749 yuan, a year-on-year decrease of 36%.
The revenue of Maverick electric bicycles declines, which can be said to start with the company launching the non-intelligent positioning Gova series in 2020. The G0 model launched by Mavericks in May 2020 once became a hit at a discount of 1,999 yuan. Subsequently, the Gova series launched two mid- and low-end models, F0 and C0. Among them, C0, launched in July 2021, is specially designed for female users and costs from 3,399 yuan. Low-priced models have already occupied an important position in the Maverick electric product structure in 2021. Among them, sales of G0 and F0 sales once reached 38.2% in Q1 2021, and the proportion of Q2 also reached 30.4%. In addition, the company's launch of the K series of scooters priced at 3,299 yuan in overseas markets has also lowered the average product price to a certain extent.
In the eyes of the outside world, Maverick Electric is Tesla in the electric two-wheeler market, but in Maverick's own philosophy, high-end models may just be the entrance to the electric two-wheeler starry sea. What the company really wants to do is Honda in the electric two-wheeler market. If you want to become "Honda", it will be reasonable to launch a low-priced model and sound the clarion call for entering the sinking market.
"New National Standard" dividend dissipates, why should the Mavericks grow?
In the view of Zhitong Finance APP, Xiaoniu’s “sinking” journey is “famous in his master”.
In April 2019, the official implementation of the "new national standard" further reshapes the competitive landscape of China's electric two-wheeler market. As the new national standard "has made strict regulations on core configuration indicators such as vehicle speed, motors, and vehicle weight, further improved the industry entry threshold, accelerated the clearance of low-end production capacity, and concentrated market share on top car companies.
According to a research report by CITIC Securities, from 2016 to 2020, the CR4 of China's electric two-wheeler industry has increased from 29% to 69%, and it is expected that CR2/CR4 will reach 51%/76% in 2021.
From the perspective of sales growth, Niu Electric is a beneficiary of the "new national standard", but from the perspective of the changes in the market competition pattern, the real "winner" is still the leading companies represented by Yadi and Emma. The share of leading companies is constantly increasing, and rising stars like Niu Electric are facing the question of who to grow. Although
is a must-have option to enter the overseas market, considering that the domestic and foreign sales ratio of Niu Electric is 20:1, the company still has a long way to go in its overseas market. In contrast, in the domestic electric two-wheeler market, with the massive demand for replacement and natural growth brought about by the implementation of the "new national standard", the sales of electric two-wheeler vehicles reached 47.6 million units in 2020, a year-on-year increase of 29%. The domestic market is undoubtedly the best electric two-wheeler market in the world, and it is also a market worthy of Maverick Electric's priority layout.
However, Niu Electric, which focuses on high-end products, faces a "dilemma" layout in the domestic market. First, the dividends of the "new national standard" are gradually fading, and market growth expectations are calm. According to Xinda Securities, the growth rate of China's electric two-wheeler market will decline to single digits in 2024 and will remain in the long run. In addition, the penetration rate of high-end two-wheeled electric vehicles marked by intelligence was only 0.8% in 2020, and it is expected to break through to double digits by 2025. This shows that if Mavericks stick to high-end, it will be difficult to win in quantity and may face the risk of being swallowed up by competitors.
The reason is that the electric two-wheeler market competition pattern is clear, and leading companies can withdraw from the price war and improve their bargaining power to the downstream. After the profitability of these companies increases, they can increase R&D investment in developing high-end products with high gross profit.
Take Yadi as an example. Its R&D expenses increased from 134 million yuan in 2015 to 605 million yuan in 2020, with an average annual compound growth rate of more than 30%. In the first half of 2021, the company's R&D expenses reached 339 million yuan, a year-on-year increase of 63.2%. Yadei has also launched flagship products such as the Guanneng 2.0 series in the high-end market. As of September 2021, the cumulative sales of Yadei Guanneng series reached 3 million units.
is not fully opened in the foreign market and the high-end market penetration rate is still low, asking competitors for the market is a card that Mavericks must play. So we can see that Niu Electric has launched low-priced products on the one hand, and vigorously expands its sales channels on the other hand. In the Q4 2021 alone, Maverick Electric added 422 new stores in China. As of the end of 2021, the number of Niu's stores in China reached 3,108. The international sales network has expanded to 42 distributors, covering 50 countries.
sales channel expansion followed by a significant increase in sales and marketing expenses. In Q4 2021, the company's sales and marketing expenses reached RMB 99.8 million (including RMB 4 million in equity incentives), a year-on-year increase of 65.9%, mainly due to the increase in advertising and promotion expenses. Sales and marketing expenses accounted for 10.1% of revenue, an increase of 1.1 percentage points year-on-year. The growth in sales and marketing expenses is also another major reason why the company's revenue increase but profit increase in Q4.
On the one hand, Niu Electric's product sales prove that the company's brand influence is positively increasing. The company has launched five new products at the Milan EICMA2021, including the 125cc electric moped MQiGT-EVO, the first 150cc hybrid moped YQi, the electric bike BQi and two other KQi series scooters. It is reported that MQiGT-EVO has been shipped in 2021, and the RQi electric motorcycle and the light hybrid motorcycle YQi with a displacement of 150cc will be shipped in 2022; the BQi will be available in 2022, with a price starting from US$1,500.
As the company's product matrix is further improved, the sales status of Niu Electric is expected to continue to improve. The company expects sales in 2022 to be between 1.5 million and 1.7 million vehicles, a year-on-year increase of 45%-64%. It is expected that revenue in Q1 2022 will be between 657 million and 712 million yuan, a year-on-year increase of 20%-30%. If Niu Electric's future profitability is also well restored, the company will still be driving in a straight line at the "crossroads" of growth.
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