Core Insights - Yadea Holdings (01585.HK) reported its most severe performance decline since its listing, with 2024 revenue of 28.236 billion yuan, down 18.8% year-on-year, and a net profit of 1.272 billion yuan, plunging 51.8%, marking a five-year low [1] Group 1: Financial Performance - Total sales of Yadea's electric two-wheelers dropped from 16.5 million units in 2023 to 13.02 million units in 2024, a year-on-year decrease of 21.18%, significantly exceeding the industry decline of 11.6% [3] - Revenue loss of approximately 6.5 billion yuan due to reduced sales, coupled with a clearance strategy that lowered gross margin from 16.9% to 15.2%, the lowest in seven years [3] - Inventory increased to 1.653 billion yuan, up 33.9% year-on-year, indicating a decline in dealer inventory turnover and reduced confidence [3] Group 2: Market Challenges - Yadea's long-standing "low price + channel" strategy faces severe challenges as the industry shifts towards stock competition, making its extensive network of over 40,000 sales points a burden [2][3] - The company holds only a 4.1% market share in the high-end segment (priced above 7,000 yuan), significantly lower than competitors like Ninebot (51.7%) and Niu Technologies (43.8%) [4] - Quality issues have emerged, with multiple models flagged in a regulatory inspection, and high complaint volumes regarding battery life and after-sales service, damaging brand reputation [4] Group 3: Strategic Initiatives - Yadea is attempting to pivot through technological upgrades and a global strategy, launching sodium-ion battery electric vehicles in 2023 and investing 1.147 billion yuan in R&D in 2024, totaling over 5.93 billion yuan [4] - Southeast Asia is a strategic focus, with production capacity in Vietnam increasing to 500,000 units and a new factory in Indonesia expected to reach a total capacity of 3.5 million units, leading to a 23% year-on-year growth in overseas revenue [4] Group 4: Industry Context - Yadea's struggles reflect broader industry trends, highlighting the need for traditional manufacturers to break away from path dependence and rebuild core competitiveness in an era driven by technology and consumer upgrades [5]

Core Viewpoint - The electric two-wheeler industry in China is undergoing significant changes in 2024, with a notable decline in both sales and prices, driven by the implementation of new national standards and a wave of product replacements [1][3]. Group 1: Financial Performance - Yadea Holdings reported a revenue of approximately 28.236 billion RMB in 2024, a decrease of 18.8% compared to 2023 [4]. - The company's net profit was halved, reflecting broader industry challenges and individual company struggles [3][4]. - Sales of electric scooters fell by 20.7% to 3.931 million units, while electric bicycles saw a 21.4% decline to 9.089 million units [4]. Group 2: Market Dynamics - The domestic electric two-wheeler market is saturated, with over 420 million units in circulation, leading to a shift in demand from new purchases to replacements [6]. - Increased competition from rivals like Aima Technology and Ninebot has intensified market pressures, with Ninebot's net profit soaring by 167.82% in the first half of 2024 [6][7]. - Yadea's gross margin decreased from 16.9% to 15.2% due to aggressive pricing strategies and rising raw material costs [6]. Group 3: Strategic Challenges - Yadea's reliance on government subsidies is becoming unsustainable as new regulations and international standards tighten [6][7]. - The company faces challenges in maintaining its market leadership as competitors rapidly expand and capture market share [7][9]. - Yadea is investing in research and development, planning to launch its first sodium-ion battery-powered electric bicycle in January 2025, aiming to reduce dependence on lead-acid batteries and mitigate lithium battery cost fluctuations [10][11]. Group 4: Global Expansion and Innovation - Yadea is accelerating its global expansion, particularly in Southeast Asia, with factories in Indonesia and Vietnam and flagship stores in Thailand [9]. - The company aims to adapt its products to local market needs rather than simply replicating its low-cost domestic strategy [11]. - Yadea's battery and charger revenue reached 4.065 billion RMB in the first half of 2024, down 9.62% year-on-year, indicating a need to diversify into B2B markets and energy services [13]. Group 5: Future Outlook - The transition from a focus on scale and price competition to value creation is essential for Yadea's survival and evolution in the changing market landscape [13]. - The company's ability to innovate in battery technology and expand internationally will be crucial in determining its future competitiveness [10][13].