Core Viewpoint - The company is initiating coverage on Longxin General with a "Buy" rating and a target price of 18.40 yuan, corresponding to a 20x PE for 2025, highlighting its strategic shift from low-end OEM to self-owned mid-to-high-end brands [1] Group 1: Company Strategy and Market Position - Longxin has transformed its business model, with the "Wujie" brand contributing nearly 20% of revenue by 2024, enhancing pricing power and value chain positioning in the motorcycle business [1] - The acquisition of a controlling stake by Zongshen in 2024 is expected to create the largest motorcycle manufacturer in the industry, with a projected market share of 17% [1] - The complementary product lines and platforms of Longxin and Zongshen are anticipated to generate strong synergies, further boosting growth potential [1] Group 2: Market Demand and Product Performance - The demand for large-displacement motorcycles is rising, with domestic sales expected to increase by 20% year-on-year to 396,000 units in 2024, raising the market share of large-displacement motorcycles to 8.6% [2] - Longxin's "Wujie" brand has successfully captured market opportunities, launching competitive products like CU525, which has helped increase its market share to 14% in 2024 [2] - The company is projected to increase its market share to 16.2% within three years, with expected sales growth of 15%/10%/9% from 2025 to 2027 [2] Group 3: Export Growth and Future Prospects - The export business of "Wujie" is thriving, with a compound annual growth rate (CAGR) of 71% over the past four years, driven by partnerships with quality local agents and differentiated product offerings [3] - Europe and Latin America are identified as key growth regions, with expectations to capture 5% market share in Europe by 2027 and 2% in Latin America within three years [3] - The company anticipates maintaining a robust total sales growth rate of nearly 40% from 2025 to 2027 [4] Group 4: Financial Forecast and Valuation - Revenue is projected to grow by 15.3%/17.6%/18.4% from 2025 to 2027, with net profit expected to increase by 69%/24%/21%, reaching 1.90 billion, 2.36 billion, and 2.85 billion yuan respectively [6] - The average PE for comparable companies is estimated at 20x for 2025, leading to a target price of 18.40 yuan for Longxin [6] Group 5: Market Concerns and Growth Potential - Despite market concerns about saturation in the domestic large-displacement motorcycle sector, there remains significant growth potential compared to markets like Italy, Japan, and Brazil [5] - The company plans to expand its product offerings to fill gaps in engine platforms and segmented categories, which could further enhance its domestic market share [5]

Summary of Longxin General's Conference Call Company Overview - Longxin General reported a revenue of 16.8 billion yuan in 2024, a year-on-year increase of 29%, with a net profit attributable to shareholders of 1.13 billion yuan, up 92% [2][5] - The motorcycle business now accounts for 76% of total revenue, reflecting a strategic focus on core operations and divestment of non-core assets [2][5] - The company completed a share restructuring in December 2024, with Zongshen New Manufacturing becoming the controlling shareholder, potentially enhancing its position in the motorcycle market [2][7] Key Business Segments Motorcycle Business - The self-owned brand "Wujie" saw rapid growth, with sales exceeding 180,000 units in 2024, generating revenue of 3.15 billion yuan, doubling year-on-year and accounting for 18.7% of total revenue [2][10] - The brand's competitive edge has been bolstered by collaboration with BMW, improving product quality and technology [2][9] - The motorcycle segment includes high-end motorcycles, all-terrain vehicles, and electric motorcycles, with a focus on expanding the product matrix and enhancing market presence [3][4] All-Terrain Vehicles - The all-terrain vehicle segment is projected to be a core growth driver for 2025, with revenue reaching 400 million yuan in 2024, a 74% increase [4][18] - Expected sales for 2025 are anticipated to nearly double, supported by a diversified product matrix and competitive strategies [4][18] Financial Performance - Longxin General's financial performance shows a stable gross margin between 15% and 20% over the past five years, with a recovery in net profit margin from 3.6% in 2023 to 6.3% in 2024 [5] - The company has maintained a stable expense ratio between 8% and 10% [5] Strategic Adjustments - Since 2021, Longxin has focused on core businesses, transitioning from industrial to consumer products, and divesting non-core subsidiaries [6] - By the end of 2024, goodwill impairment risks have been eliminated, enhancing financial stability [6] Market Trends Large Displacement Motorcycles - The large displacement motorcycle industry is experiencing rapid export growth, with a compound annual growth rate (CAGR) of 12% from 2020 to 2024 [14] - The penetration rate for large displacement motorcycles in China is only 4.6%, indicating significant growth potential compared to Japan and Europe [14] Future Outlook - Longxin General expects a net profit of 1.87 billion yuan in 2025, a 10.67% increase, with potential for higher performance if export and profit margins exceed expectations [21] - The company has a strong cash position of 5.6 billion yuan and a dividend payout ratio expected to remain high at 73% [22] Additional Insights - The Wujie brand has introduced a wider range of new models, significantly increasing the success rate of popular products [11][15] - The company is also expanding its electric motorcycle segment, which could become a secondary growth driver in the future [20]

Industry Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Viewpoints - The report highlights the growth potential of Longxin General's self-owned brand, VOGE, in international markets, driven by product strength, cost performance, and brand recognition [3][21] - The company has successfully developed popular models such as CU525 and DS525, with a strong presence in the European market where high displacement motorcycles are in demand [3][28] - The report emphasizes the company's robust cash flow and the complete digestion of impairment pressures, which positions it well for future growth and potential dividend increases [4][68] Company Overview - Longxin General has two main business segments: motorcycles, contributing over 70% of revenue, and general machinery, contributing around 20% [2] - The motorcycle segment includes various brands and products, with a focus on high-displacement models [2][27] Financial Performance - From 2021 to 2024, the motorcycle business's revenue contribution increased from 57.9% to 75.4%, with total revenue growing from 130.58 billion to 168.22 billion [15][20] - The net profit for 2024 is projected to be 11.2 billion, reflecting a year-on-year increase of 93% [20] Market Dynamics - The European motorcycle market is characterized by a high proportion of high-displacement models, with 60.9% of motorcycle consumption in Italy being over 250cc in 2024 [28] - The trend of consumer downgrading in Europe is expected to benefit Chinese brands like VOGE, which offer higher cost performance compared to Japanese and European competitors [35][36] Strategic Developments - The integration of Longxin General and Zongshen New Manufacturing is expected to enhance collaboration in supply chain, engine technology, and market channels [5][79] - The company has established a strong marketing presence in Europe, with 1,165 overseas outlets, including 876 in Europe, enhancing brand recognition [52]

Industry Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Viewpoints - The report highlights the growth potential of Longxin General's self-owned brand, VOGE, in international markets, driven by product strength, cost performance, and brand recognition [3][21] - The company has successfully developed popular models such as CU525 and DS525, with a comprehensive product range covering various motorcycle categories [3][27] - The European market presents high value, with a significant proportion of motorcycle consumption in higher displacement categories, indicating an opportunity for Chinese brands to capture market share due to their cost advantages [28][35] Company Overview - Longxin General has two main business segments: motorcycles, contributing over 70% of revenue, and general machinery, contributing around 20% [2] - The motorcycle business includes the VOGE brand, non-road sports motorcycles, and collaborations with BMW [2] Financial Performance - From 2021 to 2024, the motorcycle business's revenue contribution increased from 57.9% to 75.4%, with total revenue growing from 130.58 billion to 168.22 billion [15][20] - The company reported a significant increase in net profit, with a year-on-year growth of 93% in 2024, attributed to revenue growth and reduced impairment losses [20][27] Strategic Developments - The integration of Longxin General and Zongshen New Manufacturing is expected to enhance collaboration in supply chain, engine technology, and market channels [5][79] - The company has a strong cash position, with 77 billion in cash as of Q1 2025, providing a solid foundation for future growth and potential dividend increases [4][68] Market Dynamics - The report notes a trend of consumption downgrade in Europe, where consumers are increasingly opting for lower-priced brands, benefiting Longxin General's competitive pricing strategy [35][36] - The company's marketing efforts and extensive distribution network in Europe have led to increased brand recognition, particularly in Italy and Spain [52][53]

► 2025Q1业绩超预期 无极品牌及通路车业务均贡献增量 01 事件概述 公司披露2024年年报及2025第一季度报告，公司2024年全年实现营业收入168.2亿元，同比+28.7%，实现归 母净利11.5亿元，同比+97.1%；2025Q1实现营业收入46.5亿元，同比+41.0%，归母净利润为5.1亿元，同比 +96.8%，位于此前业绩预告中枢偏上位置。 02 分析判断 营收端： 公司2024Q4实现营业收入46.0亿元，同比+24.3%，环比+1.1%，增长主要原因为无极品牌快速放 量；2025Q1实现营业收入46.5亿元，同比+41.0%，环比+0.9%，创历史新高，主要原因为：1）无极品牌及 通路车业务高增：摩托车产品营收27.4亿元，同比+39.4%（其中无极品牌收入8.6亿元，同比增长41.8%）； 2）通用机械业务复苏：销售收入11.26亿元，同比增长65.37%；3）摩托车发动机及全地形成产品增长等。 利润端： 公司2024Q4归母净利润为2.2亿元，同比扭亏，环比-28.0%，环比下降主要原因为资产/信用减值约 2.0亿元；2025Q1业绩同环比高速增长，主要源自无极品牌量利共振+通路车 ...

Financial Performance - In 2024, the company achieved operating revenue of 16.822 billion yuan, a year-on-year increase of 28.74% [1] - The net profit attributable to shareholders reached 1.121 billion yuan, with a remarkable year-on-year growth of 92.19% [1] - Basic earnings per share were reported at 0.55 yuan [1] - For Q1 2025, the company reported operating revenue of 4.646 billion yuan, a year-on-year increase of 40.98%, and a net profit of 507 million yuan, up 96.79% [3] Dividend Distribution - The company plans to distribute a cash dividend of 4 yuan per 10 shares (tax included), totaling 821 million yuan, which accounts for 73.26% of the net profit attributable to shareholders for 2024 [1] Motorcycle Business - The motorcycle segment generated sales revenue of 12.688 billion yuan, reflecting a year-on-year growth of 34.01% [1] - The sales revenue from the company's self-owned brands increased by 97.11%, contributing to 21.95% of total operating revenue [1] - The Wujie series products achieved sales revenue of 3.154 billion yuan, with a significant year-on-year growth of 111.43% [1] - Domestic sales for the Wujie series reached 1.808 billion yuan, growing by 114.45%, while exports amounted to 1.346 billion yuan, up 107.50% [1] - In Europe, sales revenue reached 1.021 billion yuan, marking a year-on-year increase of 133.38% [1] Brand Development - The Wujie brand has become a leading high-end motorcycle brand in China, with 990 domestic sales outlets established [2] - The company has created a "cloud warehouse" service supply management system to enhance after-sales service and customer satisfaction [2] - The company has expanded its overseas sales network to 1,165 outlets, focusing on the European market with 876 sales points [2] - New strategic products like CU250 and RR660S have been launched to meet consumer demands and enhance market competitiveness [2] General Machinery Business - The general machinery segment reversed its declining trend, achieving sales revenue of 3.535 billion yuan, a year-on-year increase of 29.32% [2] - Domestic market revenue for general machinery reached 890 million yuan, growing by over 47.20%, while non-U.S. market revenue was 2.444 billion yuan, up 33.60% [2] Innovation and Product Development - The company has introduced several new products, including a riding lawn mower with sales surpassing 30,000 units, a year-on-year increase of 170% [3] - The first lithium battery-powered riding lawn mower has successfully entered mass production, further enriching the product matrix [3] - The company continues to invest in technology research and development to meet diverse market needs [3]