YADEA(HK:01585) HTSC·2026-01-07 07:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 18.63 [1][10]. Core Views - The company has issued a positive profit forecast, expecting a net profit of at least RMB 2.9 billion for 2025, representing a year-on-year growth of over 128%. This growth is primarily driven by increased sales of electric two-wheelers and product structure optimization [6][10]. - The company is positioned as a leader in the two-wheeler industry, leveraging its systematic advantages in product strength and distribution channels to consolidate its market position. It aims to expand into the mid-to-high-end market and overseas markets to unlock long-term growth potential [6][10]. - The company anticipates achieving high-quality growth in its two-wheeler business in 2025, with expected sales exceeding 16.2 million units, including over 7.4 million units in the second half of 2025, reflecting a year-on-year growth of over 11% [7]. - The company is focusing on the mid-to-high-end market with brands like "Crown" and "Modern," building differentiated competitive barriers. It is also increasing its self-supply ratio in battery production, which will enhance profitability [8]. - The company is benefiting from policy-driven replacement demand in Southeast Asian markets, with local production and policy alignment expected to boost its market share as electric motorcycles replace fuel-powered ones [9]. Financial Projections - The company’s revenue is projected to reach RMB 37.19 billion in 2025, with a year-on-year growth of 31.71%. The net profit attributable to the parent company is expected to be RMB 2.94 billion, reflecting a year-on-year increase of 131.26% [5][10]. - The report forecasts an EPS of RMB 0.99 for 2025, with a projected PE ratio of 10.35 times [5][10]. - The company’s return on equity (ROE) is expected to be 34.77% in 2025, increasing to 39.36% in 2026 [5][10].