Investment Rating - The investment rating for the company is "Buy" (maintained) [2][7] Core Views - The company is expected to face performance pressure in 2024, with a projected revenue of 28.236 billion yuan, down 18.8% year-on-year, and a net profit of 1.272 billion yuan, down 51.8% year-on-year. However, the company maintains a strong market position and is well-positioned to capitalize on industry opportunities in the second half of the year [7][9] - The company is expected to gradually recover its performance in 2025 and beyond, with net profits projected at 2.673 billion yuan in 2025, 3.248 billion yuan in 2026, and 4.002 billion yuan in 2027, reflecting a significant recovery from 2024 [7][9] Financial Summary - Revenue and profit forecasts for the company are as follows: - 2023A: Revenue of 34.763 billion yuan, Net profit of 2.640 billion yuan - 2024A: Revenue of 28.236 billion yuan, Net profit of 1.272 billion yuan - 2025E: Revenue of 38.182 billion yuan, Net profit of 2.673 billion yuan - 2026E: Revenue of 44.369 billion yuan, Net profit of 3.248 billion yuan - 2027E: Revenue of 51.370 billion yuan, Net profit of 4.002 billion yuan [7][9] Sales Performance - In 2024, the company is expected to sell 13.02 million electric two-wheelers, a decrease of 21.2% year-on-year, with total revenue from this segment at 19.335 billion yuan, also down 21.4% year-on-year. The decline is attributed to policy changes and high inventory levels [7][9] - The average selling price (ASP) of electric two-wheelers is projected to increase by 3.1% to 2,169 yuan per unit, despite a significant drop in unit profit by 38.8% to 98 yuan per unit due to issues with product pricing [7][9] Industry Outlook - The introduction of new national standards is expected to accelerate industry consolidation, benefiting leading companies like the one in focus. The company plans to enhance its product offerings and expand into international markets, particularly in Indonesia and Thailand [9][7]

Investment Rating - The investment rating for Yadea Holdings (1585.HK) is not explicitly stated in the provided documents, but the report indicates a positive outlook for the company's performance in 2025 and beyond, suggesting a potential "Buy" or "Hold" rating based on expected growth [1][2][3]. Core Viewpoints - Yadea Holdings is expected to achieve significant sales growth in Q1 2025, with overall performance anticipated to surpass that of 2023. The company is likely to benefit from scale effects and increased sales of mid-to-high-end flagship models, which may lead to greater profit elasticity compared to sales growth [2]. - The company is positioned to benefit from the "old-for-new" policy and new national standards, which are expected to stimulate consumer demand and enhance market share concentration among leading companies. Yadea's new models are anticipated to receive national inspection approval around mid-year, allowing for a smooth transition to new standards [2]. - Yadea is focusing on the mid-to-high-end market with three flagship series: Guan Neng, Mo Deng, and Fei Yue, which are expected to drive sales growth in 2025. The sales proportion of these flagship models is projected to increase significantly [3]. - The company is enhancing its retail capabilities and expanding its distribution network, which is expected to restore profitability in its channels. The global retail summit held in December 2024 is part of this strategy [3]. - Yadea is actively pursuing international expansion, having established research and production bases in Vietnam and Indonesia, as well as subsidiaries in Germany and the United States. This localization strategy is expected to support the company's growth in overseas markets [3]. Financial Summary - In 2024, Yadea Holdings reported revenues of 28.236 billion CNY, a decrease of 18.8% year-on-year, with a net profit of 1.272 billion CNY, down 51.8%. The net profit margin was 4.5%, a decline of 3.1 percentage points [1][6]. - For 2025, the company is projected to achieve revenues of 39 billion CNY, representing a growth of 38%, and a net profit of 2.85 billion CNY, indicating a recovery with a growth rate of 124% [6][8]. - The earnings per share (EPS) is expected to rise from 0.42 CNY in 2024 to 0.92 CNY in 2025, reflecting the anticipated improvement in profitability [6][8]. - The company's return on equity (ROE) is projected to increase significantly from 14.53% in 2024 to 24.55% in 2025, indicating enhanced profitability and efficiency [8].

Investment Rating - The investment rating for the company is "Buy-A" with a target price of HKD 18.84 per share, corresponding to a PE valuation of 20x for 2025 [5][4]. Core Views - The company reported a revenue of CNY 28.24 billion for 2024, a year-on-year decrease of 18.8%, and a net profit of CNY 1.27 billion, down 51.8% year-on-year. The second half of 2024 saw a revenue of CNY 13.82 billion, down 22.0%, and a net profit of CNY 240 million, down 83.6% year-on-year. The decline is attributed to an accelerated inventory clearance strategy [1][2]. - Looking ahead to 2025, the company is expected to benefit from product structure optimization and market share growth due to the effects of trade-in subsidies and new national standards [2][3]. Summary by Sections Financial Performance - In 2024, the company accelerated inventory clearance, leading to a decline in sales volume to 6.64 million units in the second half, a decrease of 20.1% year-on-year, with an average selling price of CNY 2,082, down 2.3% year-on-year [2]. - The net profit margin for the second half of 2024 was 1.7%, down 6.5 percentage points year-on-year, with a gross margin decrease of 4.7 percentage points due to lower selling prices [3]. Market Outlook - The company is focusing on optimizing its supply chain and expanding into overseas markets, with investments in core components like batteries and controllers. It plans to launch its first mass-produced sodium battery electric bicycle in January 2025 [3]. - The company is expanding its production scale in Southeast Asia and deepening its retail network, with factories in Indonesia and Vietnam and flagship stores in Thailand and Indonesia [3]. Earnings Forecast - The company is projected to achieve revenues of CNY 37.56 billion, CNY 40.91 billion, and CNY 46.37 billion for 2025, 2026, and 2027 respectively, with net profits of CNY 2.70 billion, CNY 2.93 billion, and CNY 3.38 billion for the same years [8][9]. - The expected earnings per share (EPS) for 2025, 2026, and 2027 are CNY 0.87, CNY 0.94, and CNY 1.08 respectively [8].

Financial Performance - Revenue decreased by approximately 18.8% to RMB 28,236.2 million compared to the year ended December 31, 2023[3] - Profit attributable to owners decreased by approximately 51.8% to RMB 1,272.4 million compared to the year ended December 31, 2023[3] - Basic earnings per share decreased by approximately 52.3% to RMB 42.2 cents compared to the year ended December 31, 2023[3] - Gross profit decreased to RMB 4,288.98 million from RMB 5,885.24 million, reflecting a decline in gross margin[4] - Operating profit decreased to RMB 1,665.30 million from RMB 3,132.08 million[4] - Total revenue for the year ended December 31, 2024, was RMB 28,236,246 thousand, a decrease of 18.9% from RMB 34,762,757 thousand in 2023[20] - Other income for the year was RMB 593,817 thousand, down 28.2% from RMB 826,208 thousand in 2023[28] - The company reported a net loss from foreign exchange of RMB 37,869 thousand compared to a gain of RMB 27,534 thousand in 2023[28] - Total expenses for the year ended December 31, 2024, decreased to RMB 27,213,872,000 from RMB 32,610,447,000 in 2023, representing a reduction of approximately 16.5%[30] - The company's profit attributable to owners for the year ended December 31, 2024, was RMB 1,272,374,000, down from RMB 2,640,158,000 in 2023, indicating a decline of about 51.8%[36] - Basic earnings per share for 2024 were RMB 42.2, compared to RMB 88.5 in 2023, reflecting a decrease of approximately 52.3%[36] - The total tax expense for the year ended December 31, 2024, was RMB 311,021,000, down from RMB 379,794,000 in 2023, a reduction of about 18.1%[33] - The company reported a net profit for the year decreased by approximately 51.8% from RMB 2,640.2 million in 2023 to RMB 1,272.4 million in 2024[69] Revenue Breakdown - Revenue from electric bicycles was RMB 12,244,215 thousand, down 23.5% from RMB 15,952,107 thousand in 2023[20] - Revenue from batteries and chargers decreased to RMB 7,995,475 thousand, a decline of 13.5% from RMB 9,249,600 thousand in 2023[20] - The gross profit for the electric two-wheeler and related parts segment was RMB 3,747,306 thousand, compared to RMB 5,264,580 thousand in 2023, reflecting a decrease of 29%[25] - The total segment revenue for electric two-wheelers and related parts was RMB 27,726,357 thousand, while the total segment revenue for battery and electric drive was RMB 5,009,952 thousand[25] - Sales volume of electric scooters decreased by about 20.7% from approximately 4,960,000 units in 2023 to about 3,931,000 units in 2024, while electric bicycles decreased by about 21.4% from approximately 11,561,000 units to about 9,089,000 units[57] Assets and Liabilities - Total assets decreased to RMB 24,618.89 million from RMB 25,660.10 million[9] - Total liabilities decreased to RMB 15,860.82 million from RMB 17,258.89 million[9] - The company's inventory as of December 31, 2024, increased to RMB 1,279,385,000 from RMB 955,438,000 in 2023, representing an increase of approximately 33.9%[39] - Accounts receivable decreased to RMB 477,940,000 in 2024 from RMB 554,702,000 in 2023, a decline of about 13.8%[41] - The company's total financial assets at fair value through profit or loss decreased to RMB 2,471,164,000 in 2024 from RMB 2,789,800,000 in 2023, a decrease of approximately 11.4%[42] - The total amount of accounts payable decreased to RMB 11,871,433,000 in 2024 from RMB 13,672,198,000 in 2023, indicating a decline of about 13.2%[44] - The debt-to-equity ratio increased to 16.4% as of December 31, 2024, compared to 9.9% as of December 31, 2023[81] Dividends and Shareholder Information - The company proposed a final dividend of HKD 0.22 per share and a special dividend of HKD 0.23 per share for 2024[3] - The company plans to distribute a final dividend of HKD 22.0 per share for 2024, down from HKD 48.0 per share in 2023, totaling approximately RMB 1,266,974,000[34] - The company has proposed a final dividend of HK$0.22 per share for the year ending December 31, 2024, compared to HK$0.48 for the year ending December 31, 2023, and a special dividend of HK$0.23 per share, which was not declared in the previous year[101] - The annual general meeting is scheduled for June 17, 2025, with a record date for shareholders on June 27, 2025[102] - The company will suspend the registration of shareholders from June 12 to June 17, 2025, to determine eligibility for voting at the annual general meeting[104] - The company will also suspend the registration of shareholders from June 24 to June 27, 2025, to determine eligibility for receiving the proposed dividends[104] Corporate Governance and Compliance - The audit committee, consisting of four independent non-executive directors and one non-executive director, has reviewed the annual performance for the year ending December 31, 2024[105] - The company has fully complied with the corporate governance code throughout the year ending December 31, 2024[99] - The company has adopted the standard code for securities trading by directors and confirmed compliance for the entire year ending December 31, 2024[100] - There were no significant subsequent events related to the group's business or financial performance from the end of the reporting period until the announcement date[97] Strategic Initiatives - The company is focusing on technological innovation, investing in R&D for core components like batteries and electronic control systems, and plans to launch a sodium-ion battery-powered electric bicycle in early 2025[51] - The company is accelerating its global expansion, particularly in Southeast Asia, with new factories in Indonesia and Vietnam, and opening flagship stores in Thailand and Indonesia[52] - The company anticipates that the implementation of new national standards for electric two-wheelers will stabilize the industry and drive new growth in 2025[53] - The company aims to enhance marketing efforts through digital platforms and social media to connect with younger consumers, appointing Wang Hedi as its global brand ambassador[53] Acquisitions and Investments - The company acquired 100% equity of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of RMB 351,500,000, with RMB 24,279,000 classified as contingent payment[45] - The net identifiable assets acquired from Lingbo amounted to RMB 304,394,000, with goodwill recognized at RMB 22,827,000, bringing the total acquisition value to RMB 327,221,000[47][48] - The cash outflow for the acquisition, net of cash acquired, was RMB 185,247,000[48] - The company completed the acquisition of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of approximately RMB 351.5 million on April 17, 2024[88] - The company did not conduct any significant investments, acquisitions, or disposals of subsidiaries and associates during the reporting period[89] Other Financial Information - Cash and cash equivalents remained relatively stable at RMB 7,868.88 million compared to RMB 7,913.81 million[8] - Cash and cash equivalents as of December 31, 2024, were approximately RMB 7,868.9 million, a decrease of about 0.6% from RMB 7,913.8 million in 2023[71] - The total employee cost for 2024 was RMB 2,355.6 million, a decrease of approximately 13.0% from RMB 2,707.6 million in 2023, mainly due to reduced employee bonuses and a decrease in headcount[84] - The company has incurred approximately RMB 5,020,000 in post-merger service expenses, which have been deducted from general and administrative expenses[45] - Financial expenses decreased by approximately 18.7% from RMB 44.2 million in 2023 to RMB 36.0 million in 2024, mainly due to lower bank interest rates[67] - The total value of financial assets measured at fair value through profit or loss decreased by approximately 11.4% from RMB 2,789.8 million as of December 31, 2023, to RMB 2,471.2 million as of December 31, 2024[77] - The breakdown of financial assets at fair value as of December 31, 2024, includes RMB 2,299.9 million in wealth management products and structured deposits, RMB 67.5 million in listed equity investments, RMB 82.2 million in unlisted equity investments, RMB 6.3 million in bond investments, and RMB 15.3 million in other financial assets[79] - As of December 31, 2024, the company had pledged assets amounting to RMB 3,599.3 million as collateral for notes payable, down from RMB 4,118.6 million in 2023[86] - The company had no significant contingent liabilities or guarantees as of December 31, 2024[85] - The annual results announcement will be published on the Hong Kong Stock Exchange website and the company's website[108]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 15.3 per share, indicating a potential upside of 20% from the current price of HKD 12.8 [1][5][16]. Core Insights - The company is expected to face revenue and profit pressure in 2024 due to a product inventory cycle, with total sales of electric scooters and bicycles projected to decrease from 8,210,700 units in the first half of 2023 to 6,382,600 units in the first half of 2024, resulting in a revenue drop of approximately 15.4% [3][9]. - The release of the new "Electric Bicycle Safety Technical Specification" is anticipated to boost industry demand in 2025, as consumers who were previously hesitant are expected to convert their intent into purchases [4][10][15]. - The company forecasts revenues of RMB 278.5 billion in 2024 (down 20%), RMB 342.5 billion in 2025 (up 23%), and RMB 393.9 billion in 2026 (up 15%), with net profits expected to be RMB 13.1 billion (down 50.5%), RMB 25.8 billion (up 97.5%), and RMB 34 billion (up 31.6%) respectively [5][15][16]. Summary by Sections Financial Performance - The company reported a revenue of RMB 34,800.7 million in 2023, with a year-on-year growth of 16.8%. However, a decline to RMB 27,851.9 million is expected in 2024, representing a 20% decrease [6][19]. - The net profit for 2023 was RMB 2,640.2 million, with a projected drop to RMB 1,307.9 million in 2024, followed by a recovery to RMB 2,583.6 million in 2025 and RMB 3,401.3 million in 2026 [6][19]. Market Dynamics - The new safety standards are expected to enhance the overall safety and performance of electric bicycles, which may lead to increased consumer confidence and demand in the market [10][12]. - The company is well-positioned in the domestic market due to its strong R&D, marketing, and channel management capabilities, while also expanding its overseas business [15].

Summary of Conference Call Records Company and Industry Overview - The conference call discusses a company involved in the electric vehicle (EV) industry, specifically focusing on electric motorcycles and related technologies. Key Points and Arguments 1. **Cost Management and Efficiency** The company emphasizes the importance of matching contributions with expenses, indicating that future costs will not pose significant issues. The focus is on improving operational efficiency and managing expenses effectively [1][2][3]. 2. **Product Development and Market Stability** The introduction of new products and technologies is contingent upon a stable market environment. The company plans to make significant adjustments in product design and user experience in the coming year [1][2][3]. 3. **Digital Transformation** The company is investing in digitalizing management systems and marketing strategies, which may impact short-term costs but is expected to yield long-term benefits [1][2][3]. 4. **Youth Engagement and Team Development** The company is focusing on cultivating a younger workforce, which may incur initial costs but is aimed at enhancing digital operations in the future [1][2][3]. 5. **Research and Development Adjustments** The company has dissolved a research institute focused on electric control systems, indicating a shift in R&D strategy. Future adjustments in R&D and management expenses are anticipated [1][2][3]. 6. **High-End Product Strategy** The company clarifies its definition of "high-end" products, which includes a phased approach rather than a complete shift to premium pricing. Multiple product series are being developed to cater to different market segments [2][3][4]. 7. **Policy Impact on Market Dynamics** The company discusses the impact of government policies on the electric vehicle market, particularly regarding the replacement of old vehicles. There is optimism about future policies enhancing market conditions [5][6][7]. 8. **Inventory Management and Market Readiness** Concerns about inventory disruptions due to regulatory changes are addressed. The company believes that upcoming policies will lead to a smoother transition compared to previous years [7][8][9]. 9. **Sales and Market Share Goals** The company aims to achieve significant sales targets, with projections of reaching 1.6 million units sold in the upcoming year. There is a focus on quality growth rather than just volume [10][11][12]. 10. **Product Differentiation and Innovation** The company is committed to enhancing product quality and user experience, with plans to introduce innovative products that meet new regulatory standards. This includes reducing battery weight while maintaining performance [18][19]. Other Important but Overlooked Content - The company acknowledges the challenges faced in the past years due to regulatory changes and market dynamics, emphasizing the need for a unified strategic approach moving forward [19]. - There is a recognition of the importance of maintaining a balance between market share growth and profitability, with a focus on sustainable practices [16][17]. This summary encapsulates the key discussions and strategic directions outlined in the conference call, highlighting the company's focus on efficiency, product development, and market adaptation in the electric vehicle sector.

Investment Rating - The report assigns a "Buy" rating to Yadea Holdings (01585 HK) with a target price of HK$17 14 [1] Core Views - Yadea is the leader in the electric two wheeler industry with over 16 million units sold in 2023 and revenue of RMB34 8 billion [1] - The industry is expected to benefit from new regulations and subsidies in the short term while long term demand still has room for growth both domestically and overseas [2] - Yadea has significant competitive advantages and leading overseas expansion with short term performance expected to recover and long term leadership likely to expand [2] - The company is forecasted to achieve net profit growth of -0 1% 21 7% and 15 2% from 2024 to 2026 [2] Company Overview - Yadea is a global leader in electric two wheelers with over 20 years of experience in the industry [41] - The company has eight R&D and production bases with an annual production capacity exceeding 20 million units and over 40 000 exclusive retail stores globally [41] - Revenue and net profit have grown steadily with a CAGR of 22 9% and 25 5% respectively from 2016 to 2023 [42] Industry Analysis - Short term growth is driven by new regulations and subsidies with the 2024 revision of the "New National Standard" expected to accelerate replacement demand [2][50] - Long term growth potential exists in both domestic C end and B end markets while overseas markets remain a blue ocean opportunity [2][57] - The industry is expected to see further consolidation with stricter regulations and higher entry barriers [63] Competitive Advantages - Yadea has leading advantages in cost supply chain channels and brand positioning [2] - The company has established scale advantages with production capacity significantly higher than competitors [66] - Yadea has made strategic upstream investments in key components like batteries and motors [67][72] Financial Performance - Revenue and net profit grew to RMB34 76 billion and RMB2 64 billion respectively in 2023 [42] - 2024H1 revenue declined 15 4% YoY to RMB14 41 billion due to industry slowdown and dealer inventory adjustments [82] - Gross margin improved to 18 0% in 2024H1 driven by product mix optimization and higher battery prices [88] Outlook and Forecast - Yadea is expected to benefit from new regulations and subsidies with performance recovery anticipated in 2024H2 [90] - The company is forecasted to achieve revenue of RMB40 38 billion and RMB46 21 billion in 2025 and 2026 respectively [94] - Net profit is projected to grow 21 7% and 15 2% in 2025 and 2026 driven by market share gains and overseas expansion [93]

Revenue and Sales Performance - Revenue for the first half of 2024 was RMB 14,413.8 million, a decrease of 15.4% compared to the same period in 2023, primarily due to macroeconomic uncertainties and temporary weak market demand[8] - Total sales of electric two-wheelers decreased from 8,210,700 units in the first half of 2023 to 6,382,600 units in the first half of 2024, with a gradual recovery in sales observed in May and June 2024[8] - Sales of electric bicycles accounted for 43.3% of total revenue, generating RMB 6,239.4 million, while electric scooters contributed 24.6% with RMB 3,546.6 million in revenue[10] - Battery and charger sales contributed 28.2% of total revenue, amounting to RMB 4,065.3 million, with battery sales alone reaching RMB 6,714.6 million[10] - Total segment revenue for electric two-wheelers and related accessories decreased from RMB 17,041.1 million in H1 2023 to RMB 14,413.8 million in H1 2024, a decline of 15.4%[12] - Revenue for the first half of 2024 was RMB 14,413.8 million, a decrease of 15.4% compared to RMB 17,041.1 million in the same period of 2023[53] - Revenue from electric bicycles decreased to RMB 6,239,374 thousand in H1 2024 from RMB 7,639,514 thousand in H1 2023, a decline of 18.3%[71] - Revenue from electric scooters decreased to RMB 3,546,576 thousand in H1 2024 from RMB 4,577,196 thousand in H1 2023, a decline of 22.5%[71] - Revenue from batteries and chargers decreased to RMB 4,065,296 thousand in H1 2024 from RMB 4,498,171 thousand in H1 2023, a decline of 9.6%[71] - Revenue from electric two-wheeler parts increased to RMB 562,556 thousand in H1 2024 from RMB 326,211 thousand in H1 2023, an increase of 72.5%[71] - Total segment revenue for electric two-wheelers and related accessories was RMB 14,205,169 thousand in H1 2024, down from RMB 16,988,740 thousand in H1 2023[74] - Total segment revenue for batteries and electric drives was RMB 2,526,456 thousand in H1 2024, up from RMB 1,928,281 thousand in H1 2023[74] Gross Profit and Margin - Gross margin improved from 16.9% in the first half of 2023 to 18.0% in the first half of 2024, driven by an optimized product mix and premium pricing for battery and electric drive products[8] - Gross profit decreased by 9.8% from RMB 2,874.1 million in H1 2023 to RMB 2,593.8 million in H1 2024, with gross margin improving slightly from 16.9% to 18.0% due to product mix optimization and price increases for batteries and electric drive products[14] - Gross profit for the first half of 2024 was RMB 2,593.8 million, down 9.8% from RMB 2,874.1 million in the first half of 2023[53] - Gross profit for electric two-wheelers and related accessories was RMB 2,264,028 thousand in H1 2024, down from RMB 2,687,793 thousand in H1 2023[74] - Gross profit for batteries and electric drives was RMB 374,470 thousand in H1 2024, up from RMB 192,883 thousand in H1 2023[74] Net Profit and Earnings - Net profit decreased by 12.9% from RMB 1,186.8 million in H1 2023 to RMB 1,033.9 million in H1 2024[16] - Net profit attributable to the company's owners for the first half of 2024 was RMB 1,033.9 million, a decrease of 12.9% compared to RMB 1,187.6 million in the same period of 2023[53] - Basic earnings per share for the first half of 2024 were RMB 34.5 cents, down from RMB 39.9 cents in the first half of 2023[53] - Net profit attributable to owners of the company was RMB 1,033,866 thousand in H1 2024, down from RMB 1,187,643 thousand in H1 2023[82] - Basic earnings per share decreased to RMB 34.5 cents in H1 2024 from RMB 39.9 cents in H1 2023[82] - Net profit attributable to the company's owners decreased to RMB 1,033,866 thousand in 2024 from RMB 1,187,643 thousand in 2023, representing a decline[85] - Diluted earnings per share decreased to 34.4 RMB cents per share in 2024 from 39.5 RMB cents per share in 2023[85] Cash Flow and Financial Position - Cash and cash equivalents decreased by 10.7% from RMB 7,913.8 million as of December 31, 2023, to RMB 7,067.6 million as of June 30, 2024, primarily due to net cash outflows from operating and investing activities[17] - Operating cash flow for the six months ended June 30, 2024, was a net outflow of RMB 696.503 million, compared to a net inflow of RMB 2.5728 billion in the same period in 2023[64] - Net cash used in investing activities for the six months ended June 30, 2024, was RMB 1.0867 billion, primarily due to the purchase of property, plant, and equipment amounting to RMB 815.315 million[64] - Net cash from financing activities for the six months ended June 30, 2024, was RMB 925.445 million, driven by proceeds from borrowings of RMB 1.3095 billion[64] - Cash and cash equivalents decreased by RMB 857.78 million during the six months ended June 30, 2024, ending at RMB 7.0676 billion[64] - The company paid dividends of RMB 1.3161 billion during the six months ended June 30, 2024[61] - The company repurchased shares worth RMB 13.329 million under the share award plan during the six months ended June 30, 2024[61] - The company acquired a subsidiary, resulting in a payment of RMB 209.482 million, net of cash acquired, during the six months ended June 30, 2024[64] - Interest income from bank deposits for the six months ended June 30, 2024, was RMB 117.531 million[64] - The company repaid borrowings of RMB 268.095 million during the six months ended June 30, 2024[64] - The company's cash and cash equivalents decreased to RMB 7,067,644 thousand as of June 30, 2024, from RMB 7,913,807 thousand as of December 31, 2023[105] Inventory and Asset Management - Inventory increased by 73.0% from RMB 955.4 million as of December 31, 2023, to RMB 1,652.6 million as of June 30, 2024, driven by increased battery inventory reserves and rising lead prices[20] - Total inventory as of June 30, 2024, was RMB 1,652,566 thousand, with raw materials accounting for RMB 950,156 thousand[87] - Accounts receivable increased to RMB 798,553 thousand in 2024 from RMB 545,941 thousand in 2023, with 94.2% of receivables aged within six months[88][89] - Total accounts payable and notes payable decreased to RMB 11,951,945 thousand in 2024 from RMB 13,672,198 thousand in 2023[90] - The company's trade and other receivables increased to RMB 798,553 thousand as of June 30, 2024, from RMB 545,941 thousand as of December 31, 2023[106] - The company's trade and other payables decreased to RMB 11,951,945 thousand as of June 30, 2024, from RMB 13,672,198 thousand as of December 31, 2023[108] Shareholder Equity and Share-Based Compensation - The company's total issued shares as of June 30, 2024, are 3,063,800,000 shares[26][28] - Dong Jingui holds 1,399,398,084 shares through Dawei Investment Limited, representing a significant portion of the company's equity[26] - Qian Jinghong holds 515,370,859 shares through Fangyuan Investment Limited, contributing to the company's equity structure[26] - The company granted 33,550,000 share options to 263 employees on January 17, 2023, under the 2016 Share Option Plan[35] - The share options granted have a vesting schedule tied to the company's financial performance, with 30% vesting after the 2023 annual results, 30% after the 2024 annual results, and 40% after the 2025 annual results[35] - The performance targets for the share options require a 20% growth in consolidated revenue and net profit for 2023, 44% for 2024, and 73% for 2025, compared to the 2022 baseline[35] - The company's five highest-paid individuals (excluding directors and senior management) each earned RMB 1,020,000 in 2023[31] - The company's share price at the time of the option grant on January 17, 2023, was HKD 16.14 per share[35] - The company's 2016 Share Option Plan was approved by the Hong Kong Stock Exchange on May 18, 2016, allowing the issuance of shares upon the exercise of options[35] - The company has established a performance evaluation system for employees to determine the vesting of share options based on individual performance targets[36] - The maximum number of shares available for grant under the 2016 Share Option Plan was 266,450,000 shares as of January 1, 2024[37] - The 2016 Share Option Plan terminated on June 17, 2024, and no further options can be granted under this plan after termination[37] - The 2024 Share Option Plan was conditionally approved by shareholders on June 17, 2024, with a maximum of 153,190,000 shares available for grant, representing 5% of the total issued shares as of the approval date[37] - No options were granted, exercised, canceled, lapsed, or forfeited under the 2024 Share Option Plan from its adoption date to June 30, 2024[39] - The total number of options available for grant under the 2024 Share Option Plan as of June 30, 2024, was 153,190,000[39] - The First Share Award Plan was terminated on June 17, 2024, and no further awards can be granted under this plan after termination[40] - The second and third share incentive plans were adopted on June 6, 2019, and will terminate on June 17, 2024, after which no further awards can be granted under these plans[41] - The fourth share incentive plan was adopted on July 23, 2019, and was amended on June 17, 2024, to allow the purchase of existing shares at market price for employee awards[42] - As of January 1, 2024, 70,678,139 shares were available for issuance under the share incentive plans, with 4,764,539 shares under the first plan (0.16% of issued share capital) and 65,913,600 shares under the fourth plan (2.15% of issued share capital)[43] - As of June 30, 2024, 59,642,339 shares were available for issuance under the share incentive plans, with 3,614,539 shares under the first plan (0.12% of issued share capital) and 56,027,800 shares under the fourth plan (1.83% of issued share capital)[44] - The company repurchased 1,112,000 shares under the share award plan in 2024, compared to none in 2023[94] - Outstanding restricted share units decreased to 17,338,000 in 2024 from 31,863,000 in 2023, with a weighted average fair value of RMB 5.68 per unit[96] - The company's share-based payment expenses for the six months ended June 30, 2024, amounted to RMB -46,847 thousand, compared to RMB 92,448 thousand in the same period in 2023, primarily due to the reversal of RMB 62,638 thousand in share-based compensation expenses as the performance conditions for the awards were not expected to be met[100] Regulatory and Market Challenges - The company remains the market leader in the electric two-wheeler industry by market share, despite regulatory changes and market challenges[8] - New regulations introduced in May 2024 focused on battery design and manufacturing, including aspects like overcharging, over-discharging, and thermal runaway, which temporarily disrupted product development[8] Research and Development and Overseas Expansion - The company plans to continue investing in R&D for new technologies in core components and expand its overseas market presence to promote the "Yadea" brand globally[8] - The net proceeds from the share placement in 2022 amounted to approximately HKD 857.6 million (equivalent to RMB 727.8 million), intended for overseas business expansion through R&D centers, factories, distribution networks, and potential acquisitions[47][48] - The company expects to fully utilize the net proceeds from the 2022 share placement by December 31, 2025[49] Subsidiary Acquisitions and Investments - The company's subsidiary acquired 100% equity of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of approximately RMB 351.5 million on April 17, 2024[47] - The company's subsidiary, Zhejiang Huayu Sodium Battery New Energy Technology Co., Ltd., acquired 100% equity of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of RMB 351,500 thousand on April 17, 2024[102] - The identifiable net assets acquired from Lingbo amounted to RMB 304,394 thousand, including intangible assets of RMB 114,833 thousand, primarily consisting of customer relationships valued at RMB 92,900 thousand and patents valued at RMB 20,820 thousand[103] Financial Assets and Liabilities - The fair value of financial assets at fair value through profit or loss decreased by 6.3% from RMB 2,789.8 million as of December 31, 2023, to RMB 2,613.9 million as of June 30, 2024, due to redemptions of wealth management products and structured deposits[18] - The company's financial assets measured at fair value through profit or loss decreased to RMB 2,613,941 thousand as of June 30, 2024, from RMB 2,789,800 thousand as of December 31, 2023[104] - The company's financial liabilities measured at amortized cost increased to RMB 16,672,418 thousand as of June 30, 2024, from RMB 16,202,059 thousand as of December 31, 2023, primarily due to an increase in borrowings to RMB 1,274,770 thousand from RMB 267,257 thousand[108] - The company's total financial assets measured at fair value as of June 30, 2024, amounted to RMB 2,626,927 thousand, including RMB 2,439,273 thousand in wealth management products and structured deposits and RMB 82,248 thousand in unlisted equity investments[110][111] Capital Expenditures and Commitments - The company acquired property, plant, and equipment worth RMB 679,077 thousand in 2024, a significant increase from RMB 363,763 thousand in 2023[86] - The company's capital commitments for property, plant, and equipment as of June 30, 2024, amounted to RMB 758,645 thousand, a decrease from RMB 815,006 thousand as of December 31, 2023[101] Employee Costs and Compensation - Total employee costs decreased from RMB 1,426.0 million in H1 2023 to RMB 1,074.8 million in H1 2024, with the number of employees decreasing from 12,338 to 12,008[22] - Employee share-based compensation expenses amounted to RMB 92.448 million for the six months ended June 30, 2024[61] Related Party Transactions - No significant related party transactions or balances were reported for the six months ended June 30, 2024, and June 30, 2023, as well as for the periods ended June 30, 2024, and December 31, 2023[117] Asset and Liability Overview - Total assets as of June 30, 2024, were RMB 25,707.6 million, a slight increase from RMB 25,660.1 million as of December 31, 2023[58] - Total liabilities as of June 30, 2024, were RMB 17,572.7 million, compared to RMB 17,258.9 million as of December 31, 2023[60] - The company's equity attributable to owners as of June 30, 2024, was RMB 8,134.7 million, down from RMB 8,401.0 million as of December 31, 2023[60] - The asset-liability ratio increased from 9.9% as of December 31, 2023, to 22.3% as of June 30, 2024, mainly due to increased borrowings[21] - The company's assets at the beginning of the period were RMB 80,924 thousand, an increase from RMB 66,444 thousand in the same period last year[116] - Additions to assets during the period amounted to RMB 1,677 thousand, slightly lower than the RMB 1,786 thousand added in the previous year[116] - The company's assets at the end of the

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1]. Core Views - The company reported a significant decline in sales in the short term but is expected to have a strong long-term development potential. The revenue for the first half of 2024 was 14.414 billion yuan, down 15.4% year-on-year, with a net profit of 1.034 billion yuan, down 12.9% year-on-year. The electric two-wheeler segment saw a revenue drop of 19.9% year-on-year, while the components segment experienced a revenue increase of 72.5% year-on-year [3][4]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved a net profit margin of 7.17%, an increase of 0.20 percentage points year-on-year, and a gross margin of 18.00%, up 1.13 percentage points year-on-year. The sales expense ratio was 4.20%, the management expense ratio was 2.91%, and the financial expense ratio was -0.84% [4]. - The company’s revenue forecast for 2024 is 33.069 billion yuan, reflecting a year-on-year decrease of 4.9%, with net profits expected to be 2.550 billion yuan, a decrease of 3.4% [5][6]. Business Segments - The electric two-wheeler segment is projected to generate sales of 22.153 billion yuan in 2024, down 9.9% year-on-year, while the battery and charger segment is expected to see a revenue increase of 5.0% year-on-year [6]. - The components segment is forecasted to grow significantly, with sales expected to reach 1.203 billion yuan in 2024, reflecting a growth rate of 30.0% year-on-year [6]. Valuation and Forecast - The company is valued at a price-to-earnings (PE) ratio of 14-15 times for 2024, with a reasonable value range estimated between 11.47 and 12.29 yuan, which translates to 12.62 to 13.52 Hong Kong dollars [4][5]. - The expected net profits for 2024-2026 are projected to be 2.550 billion, 3.264 billion, and 3.792 billion yuan, respectively, with growth rates of -3.4%, +28.0%, and +16.2% [4][5].