YADEA(01585) 广发证券·2024-11-07 09:34Investment Rating - The report assigns a "Buy" rating to Yadea Holdings (01585 HK) with a target price of HK$17 14 [1] Core Views - Yadea is the leader in the electric two wheeler industry with over 16 million units sold in 2023 and revenue of RMB34 8 billion [1] - The industry is expected to benefit from new regulations and subsidies in the short term while long term demand still has room for growth both domestically and overseas [2] - Yadea has significant competitive advantages and leading overseas expansion with short term performance expected to recover and long term leadership likely to expand [2] - The company is forecasted to achieve net profit growth of -0 1% 21 7% and 15 2% from 2024 to 2026 [2] Company Overview - Yadea is a global leader in electric two wheelers with over 20 years of experience in the industry [41] - The company has eight R&D and production bases with an annual production capacity exceeding 20 million units and over 40 000 exclusive retail stores globally [41] - Revenue and net profit have grown steadily with a CAGR of 22 9% and 25 5% respectively from 2016 to 2023 [42] Industry Analysis - Short term growth is driven by new regulations and subsidies with the 2024 revision of the "New National Standard" expected to accelerate replacement demand [2][50] - Long term growth potential exists in both domestic C end and B end markets while overseas markets remain a blue ocean opportunity [2][57] - The industry is expected to see further consolidation with stricter regulations and higher entry barriers [63] Competitive Advantages - Yadea has leading advantages in cost supply chain channels and brand positioning [2] - The company has established scale advantages with production capacity significantly higher than competitors [66] - Yadea has made strategic upstream investments in key components like batteries and motors [67][72] Financial Performance - Revenue and net profit grew to RMB34 76 billion and RMB2 64 billion respectively in 2023 [42] - 2024H1 revenue declined 15 4% YoY to RMB14 41 billion due to industry slowdown and dealer inventory adjustments [82] - Gross margin improved to 18 0% in 2024H1 driven by product mix optimization and higher battery prices [88] Outlook and Forecast - Yadea is expected to benefit from new regulations and subsidies with performance recovery anticipated in 2024H2 [90] - The company is forecasted to achieve revenue of RMB40 38 billion and RMB46 21 billion in 2025 and 2026 respectively [94] - Net profit is projected to grow 21 7% and 15 2% in 2025 and 2026 driven by market share gains and overseas expansion [93]