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01/10 16:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance, with a 65% YoY revenue increase and improved gross margins. Despite overseas market challenges, the domestic market shows robust growth, and the company anticipates a temporary demand surge due to regulatory changes. However, the guidance for Q4 is mixed, with possible revenue decline. The lack of Q&A suggests no major concerns from analysts. Overall, the positive financial results and strategic positioning in China outweigh the overseas risks, leading to a positive sentiment.
Total Sales Volume 465,000 units, representing a strong 49.1% year-over-year increase. This growth was driven primarily by exceptional performance in China, where sales rose to 451,000 units, up 74% year-over-year, supported by a strengthened product portfolio and effective channel expansion.
Overseas Volume 14,000 units, declining year-over-year, mainly due to weakness in the micromobility sector.
Total Revenue RMB 1.69 billion, grew 65% year-over-year. This improvement was driven by a favorable shift in the China product mix with increased contribution from higher-value models.
Gross Margin 21.8%, up 8.0 percentage points from the prior year or 1.7 percentage points sequentially. This improvement was driven by a favorable shift in the China product mix with increased contribution from higher-value models.
Net Profit RMB 81.69 million, reflecting daily efficiencies from higher volume and continued focus on operational excellence.
China Revenue RMB 1.62 billion, increased 84% year-over-year, driven by robust sales volume growth in China during the peak season.
China Scooter ASP RMB 3,283, representing a nearly 7% year-over-year growth. This growth was primarily driven by a favorable shift in the product mix.
Overseas Revenue RMB 77 million, representing 5% of total revenue. Decline driven by decreases in sales volume and ASP of kick scooters.
Overseas Scooter ASP RMB 4,648, increased 90% year-over-year and 41% quarter-over-quarter, driven by a greater proportion of revenue coming from higher-priced electronic motorcycles and mopeds.
Revenue from Accessories, Spare Parts and Services RMB 145 million, representing 8.6% of total revenue and a 51% increase compared to the same period of last year due to the increase in spare parts sales in China.
Operating Expenses RMB 297 million, increased 48% compared to the same period of last year. The OpEx ratio decreased to 17.5% from 19.6% in the same period of last year.
Selling and Marketing Expenses RMB 215 million, representing 12.7% of revenue compared to 12.5% in the same period of last year. Increase driven by higher spending on marketing and online promotion campaigns in China.
R&D Expenses RMB 43 million, representing 2.6% of revenue compared to 3% in the same period of last year. Increase driven by higher staff costs and share-based compensation.
G&A Expenses RMB 39 million, representing 2.3% of revenue, down from 4.2% in the same period of last year. Decrease mainly due to improved cash collection from accounts receivable.
Net Income RMB 82 million with a net margin of 4.8% on the GAAP accounting compared to a net loss of RMB 41 million for the same period of last year.
Operating Cash Inflow RMB 433 million, reflecting strong cash generation.
CapEx RMB 73 million, reflecting an increase of RMB 32 million compared to the same period of last year. This increase is attributed primarily to an increase in the opening of new stores and modules cost in China.
New Product Launches: Introduced upgraded flagship models NXT Ultra 2025 and FXT Ultra 2025, priced at RMB 11,999, featuring advanced safety and performance technologies. Launched FX Windstorm motorcycle targeting Gen Z riders, priced at RMB 4,799, achieving 14,000 units sold in 5 hours.
Product Development: Focused on redesigning electric bicycles to comply with new national standards, with rollout planned for late November 2025 through Q1 2026. Expanded R&D in smart riding systems and powertrain innovations.
China Market Expansion: Sales volume in China rose 74% YoY to 451,000 units, driven by channel expansion and inventory buildup ahead of new regulations. Added 238 new stores in Q3, with nearly half in lower-tier cities.
Overseas Market: Overseas sales volume declined to 14,000 units due to micromobility sector weakness. Electric motorcycle sales grew 160% YoY, supported by direct distribution network expansion.
Revenue Growth: Total revenue grew 65% YoY to RMB 1.69 billion, with gross margin improving to 21.8%. China accounted for 95% of revenue.
Operational Efficiency: Achieved higher production efficiency, delivering 450,000 units, a 20% increase from previous peak, while improving margins through shared components and module design.
Regulatory Adaptation: Prepared for new national standards by upgrading product lines and building inventory, resulting in a temporary sales boost in Q3.
Brand and Channel Strategy: Strengthened brand presence through lifestyle campaigns and digital engagement. Expanded online and offline channels, with online sales representing 70% of total sales.
Overseas Market Weakness: Decline in overseas sales volume, particularly in the micromobility sector, with a 77% year-over-year drop in micromobility volume due to market headwinds in the U.S., Europe, and Asia. Europe faced intensified price competition, while the U.S. market shifted towards lower-priced models due to tariff dynamics.
Regulatory Transition in China: The new national standard for electric bicycles in China caused a temporary sales boost in Q3 due to inventory buildup but is expected to result in demand softening in Q4 as retailers adjust to the new standard-compliant products.
Supply Chain and Inventory Challenges: Intentional reduction in promotions and shipments in overseas markets to avoid overstocking and protect margins during pricing pressure and supply chain transitions.
Economic and Market Uncertainties: Uncertainty and potential softening in Q4 demand in China due to the timing of the new standard implementation and shifting demand to Q1 2026.
Competitive Pressures: Intensified price competition in the European micromobility market and challenges in maintaining market share in the U.S. due to tariff-related shifts.
China Market Growth: China is expected to remain the primary growth driver with strong execution across the first three quarters. However, some uncertainty and softening in Q4 is anticipated due to the timing of the new standard implementation. Growth is expected to reaccelerate in Q1 2026 as the regulatory transition completes and the market stabilizes.
New Standard-Compliant Products: A full rollout of new standard-compliant electric bicycles is planned to begin in late November 2025 and extend through Q1 2026. This includes redesigned and new series offerings targeting various consumer segments, including products optimized for female riders.
Store Expansion: 300 to 400 new stores are expected to be added in Q4 2025, supporting strong momentum into 2026.
Overseas Market Growth: Strong year-over-year growth in electric two-wheelers is expected in Q4 2025, supported by the expansion of the direct distribution network. New products introduced at EICMA will fuel multi-year growth starting in 2026.
Micromobility Segment: The company will prioritize profitability over scale in Q4 2025, reducing promotions and focusing on clearing existing inventories. Structural adjustments are expected to conclude in the first half of 2026, with margins returning to normal levels in the second half of 2026.
Revenue Guidance for Q4 2025: Revenue is expected to be in the range of RMB 737 million to RMB 901 million, representing a year-over-year change of -10% to +10%.
The selected topic was not discussed during the call.
The earnings call reveals strong financial performance, with a 65% YoY revenue increase and improved gross margins. Despite overseas market challenges, the domestic market shows robust growth, and the company anticipates a temporary demand surge due to regulatory changes. However, the guidance for Q4 is mixed, with possible revenue decline. The lack of Q&A suggests no major concerns from analysts. Overall, the positive financial results and strategic positioning in China outweigh the overseas risks, leading to a positive sentiment.
The company demonstrated strong financial performance with a 34% revenue growth and a return to profitability. Despite challenges in overseas markets, domestic growth and improved gross margins were significant positives. The Q&A highlighted optimism in market recovery and expansion plans. However, increased operating expenses and lack of clear guidance for Q3 and next year's sales volume were concerns. Overall, the positive aspects, such as strong domestic performance and strategic expansion, outweigh the negatives, suggesting a likely positive stock price movement in the short term.
The company shows strong financial performance with a 35% revenue increase and gross margin improvement. Despite competitive and regulatory challenges, the positive guidance for sales volume and revenue, along with plans for expansion, suggest optimism. Analysts' sentiment appears cautiously optimistic, particularly regarding sales and margin recovery. The absence of a share buyback program is a minor negative. Overall, the company's strategic plans and improved financial metrics indicate a positive outlook, likely leading to a stock price increase of 2% to 8% over the next two weeks.
The earnings call presents a mixed picture. Positive aspects include strong sales volume growth, improved gross margins, and optimistic guidance for revenue and profitability. However, risks such as competitive pressures, regulatory issues, and supply chain challenges temper this optimism. The Q&A reveals some uncertainty regarding overseas growth amid tariffs. The lack of a share buyback program and the ongoing net loss further balance the positives. Given the mixed sentiment and absence of a strong catalyst, the stock price is likely to remain stable, resulting in a neutral prediction.
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