Bafang Electric( Suzhou) (603489) 北京韬联科技·2024-08-14 11:30Company Overview - The company, founded in 2003, specializes in motor and supporting electrical systems, with core founders coming from technical backgrounds [6] - The chairman, Wang Qinghua, holds a degree in Electrical Engineering from Harbin Institute of Technology and has extensive experience in motor development [6][7] - Wang Qinghua directly holds 40.47% of the company's shares as of Q1 2024, making him the controlling shareholder [8] - The company's core products include mid-drive motors, hub motors, and complete electrical systems, primarily sold to overseas e-bike brands and domestic vehicle assemblers [9] Market Position and Technology - The company has mastered core technologies, including torque sensors, and competes with international brands like Bosch and Shimano [10] - It is one of the few companies globally capable of independently producing torque sensors, a key factor for entering the mid-to-high-end market [10] - The company's mid-drive motors historically achieved gross margins above 40%, peaking at 54% in 2020 [11] - Hub motors, which integrate motors, controllers, and sensors, also maintain gross margins around 40% [11] Financial Performance - Revenue peaked in 2022 at CNY 2.65 billion but declined by 42.2% in 2023 to CNY 1.65 billion [17][18] - Q1 2024 revenue further decreased by 34.5% year-over-year due to weak market demand [17] - Net profit margin dropped significantly from 28.8% in 2020 to 5.6% in Q1 2024 [22] - ROE declined sharply to 3.8% in 2023, down from 62.1% in 2018 [31][32] Product and Market Trends - The company expanded into the traditional e-bike market with direct-drive hub motors, achieving CNY 780 million in revenue in 2022, a 64% year-over-year increase [15] - However, the gross margin for direct-drive hub motors is low, dropping to 0.7% in 2023 [19][21] - E-bike motor sales peaked in 2021 and have been declining since, with 2023 sales down 46% year-over-year [18][19] - The European market, which accounts for a significant portion of sales, has seen slowing demand due to geopolitical conflicts and inflation [30][36] Industry Dynamics - The e-bike market in Europe, the company's primary market, experienced a slowdown in 2022 due to high inventory levels and geopolitical tensions [40] - The traditional e-bike market in China, driven by the "New National Standard" policy, is also nearing the end of its replacement cycle, leading to slower growth [42] - Major domestic e-bike manufacturers like Yadea and Aima have seen revenue growth slow significantly in 2023 [43] Cash Flow and Dividends - The company has maintained strong cash flow, generating CNY 1.64 billion in operating cash flow from 2019 to 2023 [44] - It has a high dividend payout ratio, averaging 51% since its IPO, with cumulative dividends of CNY 1.01 billion [49] - Despite declining profitability, the company has no significant interest-bearing debt and holds CNY 1.48 billion in cash and financial assets as of Q1 2024 [50]