Investment Rating - The report initiates coverage with a "Buy" rating for the company, indicating a positive outlook on its future performance [4]. Core Insights - The electric two-wheeler market in China is characterized by steady sales growth and high ownership rates, with a projected CAGR of 6.32% from 2019 to 2024. Despite a 9.09% decline in 2024 due to weak consumer demand and industry adjustments, sales are expected to rebound, reaching approximately 52 million units by 2025 [2][36]. - The company has established a strong presence in the high-end electric bicycle market through its LYVA brand, which focuses on premium electric-assisted bicycles and has expanded into 46 countries since its registration in 2022 [3][46]. - The company has a diversified product matrix covering various market segments, supported by a robust manufacturing base across multiple regions in China [3][49]. Company Overview - The company has undergone a strategic transformation from a technology pioneer to an ecosystem leader, with significant milestones achieved since its inception in 1996 [11][12]. - The ownership structure is highly concentrated, with the actual controllers holding over 65% of the shares, ensuring stable management [15]. - The core management team possesses extensive experience in the electric two-wheeler industry, driving innovation and international expansion [19]. Financial Performance - The company's revenue grew from 2.378 billion CNY in 2020 to 5.083 billion CNY in 2023, with a net profit increase from 40 million CNY to 146 million CNY during the same period [21]. - Despite a slight revenue decline in 2024 to 5.072 billion CNY, the company maintains a resilient profit margin, with a gross margin of 13.11% and a net margin of 2.30% [24][27]. - The electric bicycle segment remains the primary revenue driver, contributing over 40% of total income, with a projected revenue of 3.017 billion CNY in 2024 [27]. Market Dynamics - The domestic electric two-wheeler market is experiencing a dual structure, with traditional electric vehicles consolidating while the electric-assisted bicycle market remains fragmented and competitive [40]. - The company has seen a significant increase in export performance, with export revenue reaching 41.388 billion CNY in 2024, marking a 29.11% year-on-year growth [43]. Strategic Initiatives - The company is focused on enhancing its core competencies through technological advancements, including liquid cooling systems and digital battery management, which are expected to drive product durability and performance [56]. - A comprehensive online and offline sales strategy has been implemented, with a significant presence in both e-commerce and traditional retail channels, contributing to robust sales growth [52].

Core Viewpoint - Green Source Group has demonstrated strong financial performance in the first half of 2025, achieving significant revenue and profit growth despite a challenging electric bicycle market [1] Financial Performance - The company reported a revenue of 3.096 billion yuan, representing a year-on-year increase of 22.2% [1] - Net profit reached 110 million yuan, showing a year-on-year growth of 66.9% [1] - Gross margin improved to 13.6%, up by 1.6 percentage points compared to the previous year [1] Product Innovation and Technology - The company focuses on technology and durability, investing in R&D to maintain its leading position in liquid-cooled motors [2] - A digital battery management system was launched to address battery durability issues, ensuring safety through intelligent temperature control [2] - The braking system features high-strength ceramic brake pads, enhancing lifespan by five times compared to standard drum brakes [2] Marketing and Sales Strategy - Green Source Group has over 14,000 offline retail stores and has innovated its marketing model by establishing online stores on major e-commerce platforms [3] - This new retail model has successfully driven approximately 300,000 electric two-wheelers to stores, with customer satisfaction increasing by 20% year-on-year [3] - The company has expanded its international business, entering three new countries and achieving significant growth in Southeast Asia and Africa [3] Brand Development - In 2025, the company launched the LYVA brand targeting urban middle-class consumers seeking high-quality, tech-oriented lifestyles [3] - LYVA features an AI mid-mounted motor and smart riding algorithms, enhancing user interaction and transitioning from functional transportation to intelligent companionship [3] Strategic Vision - The company aims to provide a "full-scenario light travel solution," integrating hardware, software, and services [4] - Its product matrix covers various scenarios, including commuting, sports, and family needs, to meet diverse consumer demands [4] - The establishment of a "3-kilometer service circle" through 14,000 smart stores offers rental, on-site maintenance, and battery swapping services, creating a closed-loop business model [4]