\u3000\u3000 Zhejiang Cfmoto Power Co.Ltd(603129) (603129)
In January, the industry's large displacement two wheeled vehicles were + 17% year-on-year, and the company's 250cc + two wheeled vehicles were + 42% year-on-year
According to the data of China Motorcycle chamber of Commerce: the industry sold 144000 large displacement two wheeled vehicles in January, a year-on-year increase of 17%. Among them, 119000 units with 150cc 250cc were sold, with a year-on-year increase of 32%. In January, the company sold more than 1700 250cc two wheeled vehicles, a year-on-year increase of - 73%. We judge that the main reason is: the Spring Festival effect is superimposed, the new product cycle of 250cc displacement section is started, and the company has taken the initiative to destock the downstream dealers. This year, the company has launched the vintage model 250-clx, and the new 250sr-r with single rocker arm is also warming up. We expect that with the opening of the new cycle of 250ml displacement section, the sales volume will rise significantly in the near future. The sales of 250cc + large displacement two wheeled vehicles exceeded 3100, with a year-on-year increase of 42% and a month on month increase of + 123%; The market share exceeded 12%, with a year-on-year increase of 0.9pct.
In January, the export of two wheeled vehicles increased by 166% year-on-year, and the sales volume of four wheeled vehicles increased by 12% year-on-year
The company exported more than 3200 two wheeled vehicles in January, with a year-on-year increase of 47%. Among them, the export of 250cc + large displacement two wheeled vehicles exceeded 2800, with a year-on-year increase of 166%. In 2021, the company's total export sales of two wheeled vehicles exceeded 25000, with a strong year-on-year increase of 200 +%. The competitiveness of two wheeled vehicles in overseas markets has gradually become prominent. We believe that the company's products have been gradually recognized by overseas customers, and high-end products can compete with head brands such as the United States and Japan in mature markets.
In terms of four-wheel vehicles: 38000 domestic four-wheel vehicles were sold in January, a year-on-year increase of + 13%. Among them, the sales of the company's four-wheel vehicles exceeded 14000, with a year-on-year increase of + 12%, and the month on month decrease due to the Spring Festival. The company's overseas sales of four-wheel vehicles are still in short supply. The company has released the production capacity of four-wheel vehicles to about 20000 units per month through technical transformation, and will enter the stage of active inventory replenishment. We expect that before further capacity release, the company's four-wheel vehicle sales will continue to maintain an average of nearly 20000 units per month in 2022.
The market share of the United States continues to increase; Us CPI hit a new high in nearly 40 years, waiting for tariff adjustment
The United States is an important overseas market for the company, and the market share of four-wheel vehicles in North America continues to increase. The consumption of four wheeled vehicles in North America accounts for about 73% of the global consumption, which is the largest single market. In 2021, the company sold more than 167000 four-wheel vehicles in total. It is expected that the market share of the North American market will increase from about 3% last year to 5% this year. We think it will continue to increase to 10% in the future. The US CPI rose 0.6% month on month (MOM) and 7.5% year-on-year (YoY) in January, and the mom continued to rise. The inflation rate has exceeded 6% for four consecutive months. If the subsequent US trade policy towards China is adjusted or the company's goods are exempted from tariffs, the company's profitability will be greatly improved.
Profit forecast and Valuation: the net profit CAGR in the next three years is 39%, maintaining the "buy" rating
The net profit of 2027 is expected to be RMB 1.8-2.5 times that of 2027, with a year-on-year increase of RMB 1.8-2%. From 2021 to 2023, the net profit CAGR is 39%. Based on the gradual increase in the market share of four-wheel vehicles and two wheel vehicles, the company has a deep understanding of consumers and is good at building popular models, and maintains the buy rating.
Risk warning: overseas development fails to meet expectations; Intensified competition in China; Raw materials, sea freight and exchange rate fluctuation risk
