CFMOTO(603129) 国信证券·2024-09-24 10:00Investment Rating - The report assigns an "Outperform" rating to the company, with a target price range of 172.8-198.7 RMB, implying a potential upside of 19%-37% from the current price [2][4] Core Views - The company is a leading player in China's all-terrain vehicle (ATV) and mid-to-large displacement motorcycle markets, with a strong export focus (76% of revenue in 2023) [2] - The company has achieved a leading market share in Europe and a strong position in North America for ATVs, and ranks among the top three in China's mid-to-large displacement motorcycle market [2] - The company is expected to benefit from new product launches, overseas expansion, and premiumization strategies, driving future growth [2] Company Overview - The company has a strong presence in both ATV and motorcycle markets, with ATVs contributing 54% of revenue (6.5 billion RMB in 2023) and motorcycles contributing 37% (4.5 billion RMB in 2023) [13] - The company has a diversified product portfolio, covering motorcycles from 125cc to 1250cc and ATVs from 110cc to 1000cc, including electric models [13][15] - The company has a long history of technological innovation, starting from engine components in 1989 and expanding into ATVs in 2005 [16] ATV Market Analysis - The global ATV market is projected to reach 15.8 billion USD by 2028, with UTV/SSV segment accounting for 83% (13.1 billion USD) [2][24] - The ATV market is highly concentrated, dominated by North American and Japanese brands, but the company has achieved a global market share of over 15% in 2023 [2][29] - The company has launched multiple new high-end ATV models in 2024, significantly improving performance and narrowing the gap with leading competitors [2][24] Motorcycle Market Analysis - China's mid-to-large displacement motorcycle market has low penetration (less than 5% in 2023), with significant growth potential as consumer acceptance increases [2] - The company has a strong track record of launching hit motorcycle models and has accelerated its new product release cycle in 2024 [2] - The company's electric motorcycle brand, ZEEHO, is building a comprehensive product matrix, potentially creating a third growth curve [2] Overseas Expansion - The global mid-to-large displacement motorcycle market is estimated at 3.81 million units, with significant opportunities in North America, South America, Europe, and Southeast Asia [2] - The company has shifted its motorcycle strategy to focus on both domestic and overseas markets since 2022, leveraging its competitive pricing advantage [2] - The company is strengthening its overseas distribution channels, which could drive rapid growth in motorcycle exports [2] Financial Projections - The company is expected to achieve net profits of 1.31 billion, 1.64 billion, and 2.04 billion RMB in 2024, 2025, and 2026 respectively, with EPS of 8.6, 10.8, and 13.5 RMB [2] - Revenue is projected to grow at a CAGR of 21.5% from 2023 to 2026, reaching 21.76 billion RMB in 2026 [3] - The company's EBIT margin is expected to improve from 8.4% in 2023 to 10.0% in 2026, with ROE increasing from 20.0% to 22.8% over the same period [3] Competitive Advantages - The company has strong R&D capabilities, particularly in water-cooled engine technology, with engine durability exceeding 200 hours [30] - The company has been expanding its global distribution network, with the number of ATV dealers increasing from around 250 in 2017 to 554 in 2022 [33] - The company has established a comprehensive after-sales service system covering all global sales regions [34]