The two-wheeler "millet", high is not high, low is not

Written by / Yang Qian

Edited / Mao Shiyang

Since April 1, the price of Maverick Electric has increased.

"Finance and Economics" weekly found that just the day before the price increase, the owners of a number of Maverick electric franchise stores were issuing price increase notices in the circle of friends and the Maverick "team group", actively telling consumers that if they made a deposit in advance, they could avoid being affected by the price increase.

This round of price increases involves almost most of The Maverick Electric's products, with an increase ranging from 200 yuan to 1,000 yuan. Among them, the highest price increase of N1S power/top version is 1,000 yuan, the price of U series is 300 yuan, and the price of GO/BO/CO series products is 200 yuan. Before the price increase, some of the Products of Maverick Electric still have a promotion range of about 500 yuan.

In fact, it is not only the calves that have been affected by the sharp rise in the prices of raw materials such as upstream lithium batteries. Maverick Electric announced a price increase on March 21, followed by competitor Emma also announced that it would increase the price. At present, among the main players of two-wheeled electric vehicles, Xinri, Hello, Yadi, etc. have not yet announced price increases.

However, unlike brands such as Emma, which sells more than 8 million vehicles a year, for Maverick Electric, which is focusing on opening up the sinking market and has just exceeded one million sales, the "forced" price increase is somewhat helpless.

(Source: Visual China)

The performance is high, and the myth has been shattered

Price increases and 3.15 roll-offs have pushed the young two-wheeled electric vehicle head company Maverick Electric into the spotlight.

On March 30, Li Yan, CEO of Maverick Electric, appeared in a live broadcast room to respond to the concerns of the audience. A live broadcast attracted nearly 60,000 people to watch, and netizens kept asking their questions about Maverick Electric.

In the live broadcast room, Li Yan sat in an empty conference room, wearing a bright black suit and a pair of black-rimmed glasses, trying to calmly face the "bomb" thrown by the media and netizens.

Li Yan said that the price increase is one of the means to cope with the price increase in the supply chain. If you want to cope with the cost increase through other means, you can only integrate upstream and downstream. "Maverick electric is not large enough, and the price increase is really passive."

Before this price increase, in mid-March, Maverick Electric just released its 2021 financial report. In 2021, Xiaoniu Electric achieved double growth in revenue and net profit, of which revenue was 3.705 billion yuan, an increase of 51.56% year-on-year; net profit was 226 million yuan, an increase of 33.9% year-on-year.

In the whole year of 2021, the total sales of all the major products of Xiaoniu Electric were 1.0379 million units, an increase of 72.5% year-on-year, and the total sales exceeded one million units for the first time, of which 988,000 units were sold in the Chinese market, completing the annual target.

After the 2021 results were released, Maverick Electric executives called 2021 the company's "most successful year to date." But on the day of the earnings report, the NASDAQ-listed Maverick Electric (NIU.O) stock price fell 16.86%, closing at $8.68 per share, falling below the issue price of $9 per share.

In contrast, the 2021 Maverick Electric stock price is still at a high of $53.38 per share, and now the total market value is less than $800 million, which is nearly three-quarters of the way down from the high.

Behind this, the high growth rate of Maverick Electric's performance in 2021 is based on the poor performance of the previous year. In 2020, the net profit of Maverick Electric fell by 11.28%, and although the revenue growth rate was 17.7%, it was significantly slower than that of its peers, and the revenue growth rate of Yadi and Emma in the same period was 61.76% and 23.8% respectively.

Single-quarter earnings data makes the weakness of Maverick Electric more obvious. In the fourth quarter of 2021, The revenue of Xiaoniu Electric was 986 million yuan, an increase of 46.74% year-on-year; the net profit was 47.65 million yuan, down 18.13% year-on-year.

In the eyes of industry insiders, the sharp decline in the market value of Maverick Electric is partly affected by the recent general decline in Chinese stocks. More importantly, the logic of investors' valuation of the Mavericks began to change.

The emergence of Maverick Electric has opened the way for the entire traditional two-wheeled electric vehicle brand. Relying on labels such as high-end, intelligent and Internet-oriented, Maverick Electric has launched differentiated competition with Yadi and Emma in the field of two-wheeled electric vehicles, and the average price is 2 times more expensive than that of traditional two-wheeled electric vehicles. According to the research of GF Securities, according to statistics, from 2017 to 2020, the average price of Maverick electric products has been maintained at more than 4,000 yuan per vehicle, while the average price of traditional electric vehicle manufacturers' products is about 1500-2000 yuan per vehicle.

Therefore, Maverick Electric is known as the "Tesla in a two-wheeled electric vehicle". Some investors have valued Mavericks as a technology company, rather than just a manufacturer of two-wheeled electric vehicles.

But the high growth of Maverick sales in 2021 is at the expense of price. According to the financial report, the average price of Maverick's bicycles in the domestic market in 2021 fell by 8.8% year-on-year to 2959 yuan, which was the first time that the company's average bicycle price in China fell below 3,000 yuan.

As the mavericks had to trade price for volume, the myth of "tech companies" began to shatter. Coupled with the change of executives and the gradual fading of institutional investors, the company, which was established for less than 8 years, seems quite bleak, and the premium ability brought by Internet plus technology has gradually faded.

"Compromise" with low-cost cars

Li Yinan, the founder of Mavericks, was once a legendary "genius" figure in the technology industry. He became a vice president of Huawei at the age of 25 and was called a "red child" by Ren Zhengfei. Since then, Li Yinan joined Baidu as chief technology officer, and Baidu Robin Li once praised that there are no more than three people in the world who have the ability to do this position, and Li Yinan is one of them.

"Genius" Li Yinan was once one of the technological halos of Maverick Electric. However, in 2018, Li Yinan resigned as CEO and left Mavericks. According to the latest data from Choice, Li Yinan's shareholding in Maverick Electric has been reduced from 39.5% at the beginning of the listing to 28.6%.

Last year, Li Yinan announced his new entrepreneurial project Niu Innovation Energy, released the "Self-Touring Home" brand, and began to join the four-wheeled new car. According to official information, Self-Travel NV is expected to deliver the first users in September this year.

"Finance and Economics" Weekly learned that many middle and high-level people of Xiaoniu Electric have also followed Li Yinan to join the car-making industry. In the eyes of the outside world, Li Yinan's defection to the new car is to see the limitations of the two-wheeled electric vehicle market.

As we all know, the ceiling of two-wheeled electric vehicles is not high, and the technical moat is not wide. After being "inspired" by the Maverick Electric, competitors quickly poured in. Founded in 2014, After proving the potential of the high-end market of two-wheelers, yadi, the industry's leading brand, began to try high-end in 2015. At that year's national dealer conference, Yadi said to "stay away from the price war and concentrate on making more high-end electric vehicles." Not only Yadi, but also brands such as Emma, have launched high-end models with a unit price of 4,000 yuan or even more than 5,000 yuan in the next few years.

This has had a huge impact on Maverick Electric. A person in charge of a two-wheeled electric vehicle company told Caijing Weekly, "The high-end market of Maverick Electric is sniped by competitors, and if the low-end market does not fight back, the market of Maverick Electric will inevitably become more and more narrow." ”

In fact, although the intelligent and high-end image of Maverick Electric has cultivated a certain consumer group, in the two-wheeled electric vehicle market, this group does not account for a large proportion. Compared with the volume of hundreds of thousands of vehicles per year before Maverick Electric, the market waist brand Xinri reached the level of millions of sales as early as 2016, and Yadi, which occupies the market leader, exceeded 13.8 million vehicles in 2021, and emma's sales in 2020 have also approached 8 million.

In July 2021, Yadi further launched a new sub-brand VFLY for urban high-end travel, priced from 6999 to 19800 yuan. Emmazi brand Xiaopa launched products priced from 4999 yuan to 9999 yuan.

"Yadi's high-end cars are not sold in many stores offline, and Yadi does this to endorse the brand, set up a signboard, and prove that it has strong research and development strength." Some insiders told the "Finance world" weekly.

The Maverick Electric, which has lost the high-end moat, needs to further open up the market, and can only try to reduce the price and exchange the volume and launch more low-cost products.

In 2019, Maverick Electric launched the sub-brand Gova, which is priced at 2499 yuan to 4599 yuan. Among them, GovaGO once launched the "original price of 2299 yuan, after the discount of 1999 yuan" offer, quickly became a hit. In that year, sales of the Gova series reached 22,000 units. In 2020, the sales of the Gova series increased significantly to 168,500 vehicles, accounting for nearly 30% of the total sales, becoming the backbone of the sales of Maverick Electric in 2020.

In April 2021, Maverick Electric continued to launch the F0 and C0 models of the Gova series. Since then, once the e-commerce festival, Maverick Electric will increase its promotional efforts. During the summer vacation of 2021, Maverick Electric launched the promotion of "Personal Travel Season", with the Maverick Gova G0 and G2 models dropping 500 and the Maverick Electric Gova G3 all series of models dropping 300.

Therefore, by the time of the release of the semi-annual report in 2021, the high-end products NQI, MQI and UQI series of Maverick Electric accounted for 11%, 14% and 19% of the total sales respectively, and the relatively low-end Gova series has accounted for 56% of the total sales.

This has been followed by a year-on-year decline in Maverick electric single-vehicle revenue. In 2021, the revenue of Mavericks per vehicle was 3569 yuan, down 12.15% year-on-year. Previously, in 2020, the revenue of Maverick electric single vehicle was 4062 yuan, down 17.56% year-on-year. The revenue of a single car of Maverick Electric in 2019 was 4928 yuan.

Even so, Li Yan still denied that it was because "low-cost models pulled down bicycle revenue." He said the price of a single car fell because Maverick Electric launched a new product, that is, a lower-priced electric scooter sold overseas. According to him, the sales volume of this product is about 15,000 units, and the actual proportion is not high.

The sinking market can't put down the body

"Finance and Economics" Weekly found on the official website of Xiaoniu Electric that most of its offline outlets are distributed in first- and second-tier cities. In order to make up for the lack of offline stores, Xiaoniu Electric has expanded significantly since 2018 at a rate of opening more than 2 new stores per day on average, from 760 at the end of 2018 to 3108 at the end of 2021. In the fourth quarter of 2021 alone, Mavericks expanded 422 stores in three months.

But in the industry, such a speed is not fast. Last year, it officially entered the two-wheeled electric vehicle market, and the number of stores has exceeded 3,000, while the industry's head Yadi has more than 35,000 stores, and emma's number of stores nationwide in 2020 has exceeded 30,000.

Behind this, Mavericks have been reluctant to "lower their posture" in store cooperation. Unlike the two-wheeler hypermarkets that are common in the sinking market, Mavericks has relatively strict restrictions on the management of stores. Wang Chao, an employee of a Maverick electric store who used to work in a certain area of Fujian Province, told Caijing Tianxia Weekly that The Maverick store can only sell Maverick electric vehicles, not other brands of cars, and other brand stores can often accommodate multiple brands at the same time, which limits the expansion of Maverick outlets.

"Finance and Economics" Weekly learned that according to The Niu's previous channel expansion plan, it is hoped that the product will be quickly accepted by many users after it comes out. On this basis, we will open service outlets, expand some stores, and gradually expand the scale.

Therefore, in the year of Wang Chao's tenure, the Maverick franchisees faced great competitive pressure in the market, "the national franchisees have a specific group, they will discuss together, analyze the market demand of the Calf, and launch the corresponding strategy." ”

But Maverick's products have not been as popular in lower-tier cities as officially expected. Behind the channel "can't go down", Maverick's products are not dominant in the sinking market.

Wang Chao said: "When Maverick Electric entered Putian, Fujian Province, sales were particularly bad. Because putian people feel that it is not worth spending a lot of money to buy an electric car. ”

Li Yan also generously admitted in the live broadcast room that the Mavericks "can't go down", one is that there are not enough models, only a few cars, and the price cannot come down; the second is that the cars with lithium batteries are concentrated in first- and second-tier cities, and other markets are cars with lead-acid batteries. "The product is not suitable for the local city, only for a small group of people."

This creates an endless cycle. Without the right products, outlets can not keep up, service capabilities and brand awareness can not be opened, resulting in poor sales.

Liu Sen, an engineer who has long been concerned about the field of two-wheeled electric vehicles, told the "Finance and Economics" weekly that the profit point of two-wheeled electric vehicles is not all in the sale of cars, and the profits of offline stores depend on subsequent repairs and replacement of accessories. Consumers not only need on-site testing, but also follow-up car inspections and repairs are also carried out offline.

At the same time, the cost of Maverick electric also continues to rise. In the fourth quarter of 2021, its operating expenses reached 189 million yuan, an increase of 57.1% year-on-year. Among them, the sales expenditure is nearly 100 million yuan, which is more than twice the research and development expenditure.

This directly affects the gross profit of Maverick Electric – gross margin for the full year 2021 was 21.9% and 22.9% in 2020. Maverick Electric explained that it is mainly due to the introduction of various new products leading to the rise in raw material costs and changes in the product mix.

There are many variables in the future

According to data from China Merchants Securities, from 2018 to 2020, the market share of industry CR4 (Yadi, Emma, Tailing, Xinri) increased from 47.4% to 57.9%. Although Maverick Electric is also growing, the market pattern has taken shape.

In contrast, competitors have adopted a more pragmatic strategy than Mavericks, maintaining lower prices and investing more in brands. As of now, the gross profit margin of Yadi and Emma is lower than that of Maverick Electric, taking 2020 as an example, yadi's gross profit margin is 15.9%, and Emma's gross profit margin is only 11.35%.

In Liu Sen's view, Yadi's sales are large because of the supply chain cost advantage, Emma "money is spent on advertising", Maverick positioning two-wheeled intelligent electric vehicles, but "the market capacity space is limited, Maverick opens more stores then car sales to who is a problem, and Maverick has its own customer group is enough." ”

Li Yan also admitted that Maverick Electric is a relatively niche, high-end product research and development company, and indeed there is a big deficiency in the ability to optimize the supply chain, and there is no supply chain gene.

And the maverick's hidden crisis goes far beyond that. Maverick Electric, which was forced into the low-end market, faced many complaints on the consumer side. On the black cat complaint platform, due to after-sales problems such as abnormal brakes, no signal in the central control, and unlit lights, the complaints of the mavericks have reached more than 1600.

In August 2021, Jiangsu Xiaoniu Electric Technology Co., Ltd., a subsidiary of Xiaoniu Electric, was fined a total of 300,000 yuan by the Changzhou Wujin District Market Supervision and Administration Bureau for producing and operating electric bicycles that did not meet national standards.

Whether The Mavericks should continue to increase investment in the low-end market, there are different views in the industry.

Qi Haiyan, president of Beijing Teyi Sunshine New Energy, told Caijing Tianxia Weekly that the positioning of target customer types is very critical. For example, for young women's elegant electric vehicles and express brothers used multi-functional electric vehicles, the needs are not the same, rather than one-sided pursuit of high-end or large and complete, it is better to be a hidden champion in the field of segmentation, dig deep into customer needs, increase customer stickiness.

There are more optimistic industry views that Maverick Electric does not have to be so impatient. Previously, two-wheeled electric vehicles were traditional manufacturing industries, fighting for cost and price, and the future was fighting for technology and intelligence. Therefore, Maverick Electric continues to strengthen its investment in science and technology, and may be able to maintain its competitiveness in the niche market in the future.

Li Yan is very optimistic about the current changes in the two-wheeled electric vehicle industry. He believes that the current market competition is fierce, if everyone includes new performance and technology, the high-end intelligent models are made into large-scale, and the cost can eventually be reduced.

The above-mentioned industry insiders also believe that the characteristics of endurance and safety are the foundation of two-wheeled electric vehicle enterprises, and the technical level has certain commonality. However, at present, the industry is changing from functionalization to intelligence, and many functions need to be developed and mined.

But when these intelligent results will be translated into product competitiveness remains to be verified. Cinda Securities data shows that the penetration rate of high-end two-wheeled electric vehicles marked by intelligence is only 0.8% in 2020, and it is predicted that it will break through to double digits in 2025. Where is the intelligent direction of two-wheeled electric vehicles in line with consumer demand, and it also needs to be explored by Maverick Electric and its peers.