VMT 2.78% 52.5¢ vmoto limited

Vmoto versus Niu

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    Over on the US Nasdaq in the early hours of Friday, the Niu share price dipped by over 5%. In the following session, Niu was down by another 2.13%.

    Vmoto, by way of comparison, lost a tenth of its market capitalisation on Friday, managing to drop by more than Niu in the course of a single trading day.

    What is curious about these comparative share-price movements is that there is some reason to suspect that the market-actors seem to have got things the wrong way round: the evidence increasingly suggests that Niu is losing market share to the Vmoto Soco group.

    Last Friday, I noticed a French website which reported on the most recently released monthly electric motorcycle registration figures for that country.

    The heading to the article poses a question: Are electric scooters and motorcycles still on the rise?.

    The short answer, at least for France, is no: In July, electric two-wheeler registrations apparently saw a significant decline, dropping by 28% compared to the same month in 2019, a fall which even exceeded the drop seen in registrations for conventional ICE light vehicles over the same month.

    The 50cc equivalent electric two-wheeler category experienced the biggest slump in registrations in the month of July, and according to the article, it is e-bikes, such as the Gogoro Eeyo 1, pictured below, that are the major cause.

    You wouldn't know it from a quick glance, but apparently the three shown above are in fact electric bicycles. The only real clue as to their true nature is the small motor positioned on the rear wheel. Not hard to guess why electric bicycles seem to be eating into the sales of the light electric motorcycle category.

    However, when you drill into the detail included in the article, it is notable that one electric scooter brand has been disproportionately impacted by the apparent July slump in sales.

    As noted in the report, one major cause of the slump in the 50cc electric equivalent category was down to

    ...disaffection for Niu, which had made a strong entry on the market and sold more than 2000 units in 2019 against 500 over the first 7 months this year. The Chinese brand remains at the top of sales, but very little ahead of Super Soco. Behind it are a multitude of small brands which sell 200 units per year...

    So over 2019, according to the report, over 2000 Niu units were sold, which suggests a figure of over 160 units per month. But they seem to have sold only 500 over the first seven months of this year, or just over 70 units per month.

    The passage above also noted that Niu's figures for the first seven months of 2020 are only marginally ahead of those of Super Soco, which suggests that Niu is getting hammered by Super Soco in France in the light electric category.

    For the 125cc equivalent class, the picture is also grim for Niu: in fact, the report uses the word 'debacle' to describe the July plunge in Niu's figures:

    ...At Niu it is a debacle with more than 50% drop for the 125cc equivalent and only Super Soco, Zero and Orcal continue to progress...

    In summary, the above report seems to suggest that Niu is getting murdered in France, and it seems that Super Soco  have stolen much of their thunder.

    Interestingly, I've noticed a few reports from other countries which suggests that something similar is happening elsewhere.

    Last month, the Italian website Vaielettrico also featured a report on the registration numbers for electric two-wheelers in Italy in July. It is evident from the figures mentioned in the report that for the first seven months of 2020, one Super Soco model has proved more popular than any of those on offer from Niu:

    ...Among the various electric two-wheeler models, the most significant numbers were  Silence S02 with 800 units, followed by Askoll ES3 with 591 (the new Askoll NGS3 range has just been launched),  Vmoto Soco Cux with 402. Also continuing to sell well are the models of the Chinese NIU (266 N series, 226 NGT, 165 MX and M series) as well as Lifan, with the E3 plus (151) and Govecs with 112...

    And a Polish website which reported on the Polish motorcycle registration numbers for July also included a couple of lines on the electric motorcycle registration figures for that month:

    ...Also, 98 electric motorcycles were registered, compared to 40 a year before, which means an increase by 145%. The leader here is NIU (25), followed by SUPER SOCO (24) and VECTRIX (16)...

    The numbers reported in Poland are probably reflective of the situation across Europe, with Super Soco bikes proving to be at least as popular as the Niu models.

    Given this, I tend to agree with Wizardwiegy's target price of $1 for Vmoto. The evidence suggests that Super Soco are on par with Niu in Europe, and the only edge Niu has over Super Soco seems to be the high volume China sales.

    But with Vmoto bikes apparently proving to be a hit in the Philippines, as has been noted here previously, as well as, it would increasingly seem, in Brazil, it would appear that Niu's dominance in the higher volume, lower margin markets is also being challenged.

    The Niu share price is currently hovering around $19 (bear in mind this is in US dollars) while the VMT share price still lingers in penny-dreadful land, despite all the evidence suggesting that Vmoto are killing Niu. You'd surely think this stock is worth at least one lousy Aussie dollar.
    Last edited by Inchiquin: 07/09/20
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