Core Viewpoint - The company reported a decline in revenue and net profit for 2024, but showed signs of recovery in Q1 2025, with a positive outlook for long-term e-bike demand in Europe and the U.S. [1][2][3] Financial Performance - In 2024, the company achieved revenue of 1.357 billion, a year-on-year decrease of 17.66% - The net profit attributable to shareholders was 64 million, down 50.06% year-on-year - The net profit after deducting non-recurring items was 41 million, a decline of 61.42% year-on-year [1] - For Q1 2025, the company reported revenue of 301 million, an increase of 1.69% year-on-year - The net profit attributable to shareholders was 22 million, up 32.11% year-on-year - The net profit after deducting non-recurring items was 17 million, a rise of 12.24% year-on-year [1] E-bike Motor Business - The e-bike motor business faced short-term pressure, with revenue of 592 million in 2024, down 20.38% year-on-year - The gross margin for this segment was 41.3%, a decrease of 4.94 percentage points year-on-year - High inventory levels and unstable political and economic conditions contributed to a slowdown in demand [1] Market Outlook - Long-term demand for e-bikes remains strong, with expectations of inventory issues resolving in Europe by 2025 - The European market is projected to maintain an upward trend until 2030 - The U.S. market has significant growth potential due to its low current penetration rate - In Japan, despite recent declines in production and sales, the e-bike penetration rate remains strong, with a widening production-sales gap [2] Cost Management - In Q1 2025, the company achieved a significant reduction in expense ratios, contributing to profit growth despite a decline in gross margin - The overall gross margin was 23.89%, down 4.66 percentage points year-on-year - The sales, management, and R&D expense ratios were 3.27%, 8.04%, and 4.39%, respectively, all showing year-on-year decreases [2] Profit Forecast and Valuation - Due to weak overseas demand, the company has lowered its profit forecasts for 2025-2026 and introduced a forecast for 2027 - Expected net profits for 2025-2027 are 110 million, 142 million, and 179 million, reflecting reductions of 48% and 42% for 2025 and 2026, respectively - The current stock price corresponds to a PE ratio of 57, 44, and 35 for 2025-2027 [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected investment return exceeding the market benchmark by more than 15% over the next 6-12 months [4]. Core Views - The company's revenue for 2024 is projected at 1.357 billion yuan, a year-on-year decrease of 17.66%, with a net profit attributable to shareholders of 64 million yuan, down 50.06% year-on-year [1][3]. - Despite short-term pressures on the electric bicycle motor business, long-term demand remains strong, particularly in the European market, where inventory issues are expected to resolve by 2025, leading to growth until 2030 [2][3]. - The company has seen a significant reduction in expense ratios in Q1 2025, contributing to a year-on-year profit increase despite a decline in gross margin [2]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 1.357 billion yuan, a decrease of 17.66% year-on-year, and a net profit of 64 million yuan, down 50.06% year-on-year [1][3]. - For Q1 2025, the company reported a revenue of 301 million yuan, an increase of 1.69% year-on-year, and a net profit of 22 million yuan, up 32.11% year-on-year [1][2]. Market Outlook - The European market is expected to recover from high inventory levels by 2025, with continued growth projected until 2030 [2]. - The U.S. market shows potential for growth due to its low current penetration rate of electric bicycles [2]. Profitability and Cost Management - The overall gross margin for Q1 2025 was 23.89%, a decrease of 4.66 percentage points year-on-year [2]. - The company effectively managed its expense ratios, with sales, management, and R&D expense ratios decreasing significantly in Q1 2025 [2]. Earnings Forecast and Valuation - The report forecasts net profits for 2025, 2026, and 2027 at 110 million yuan, 142 million yuan, and 179 million yuan, respectively, with corresponding P/E ratios of 57, 44, and 35 [3][10].