Edit | Yuer Lake
Produced | Tide Rising Network "Yu See Column"
In today's first- and second-tier cities, traffic congestion has become the norm. In the case of short distances, convenient electric bicycles have long replaced traditional bicycles and become the preferred means of transportation for migrant workers. In third- and fourth-tier cities and villages, electric bicycles are a rigid need for every family. The popularity of two-wheeled electric vehicles has also driven the rapid development of a large number of brands.
Recently, Lvyuan Group (hereinafter referred to as Lvyuan), which came out of the circle with the slogan of "one bike rides for ten years", submitted a prospectus again and went to Hong Kong for the second time to impact the capital market. In the first half of this year, Luyuan electric vehicles continued to move. In March, it held a new product launch conference and became the official partner of the Chinese national table tennis team; In April, he sponsored iQiyi's hit variety show "Let's Farm"; In May, founder Ni Jie was a guest on "Zhang Chaoyang's Physics Class".
Coupled with the impact of IPO, it seems that Luyuan must have made a big move in the industry this year. In fact, in November last year, Lvyuan had already submitted the prospectus, but it submitted the prospectus again within a few days after the prospectus expired, which means that Lvyuan is extremely eager for the capital market. This also shows that Luyuan's electric two-wheeler business is indeed difficult to say.
The two-wheeled tram runs at a new speed, and the green source cannot hide the anxiety of the track
In 2000, with the breakthrough of motor and battery technology, the two-wheeled tram track benefited a lot. In 2005, the domestic production of electric bicycles exceeded 10 million, and from 2007 to 2014, the electric bicycle market matured from explosive growth. Since 2014, the growth rate of electric bicycle production has slowed down, but thanks to the implementation of the new national standard in 2019, the electric two-wheeler track has ushered in another development opportunity.
According to relevant data, domestic sales of electric two-wheelers will exceed 60 million units in 2022, a year-on-year increase of 20.7%. At the same time, the market pattern of the industry track has initially formed, and the head effect is obvious. Yadea, Emma and Tailing are firmly in the first line camp, with a combined market share of 57.3% of the three major brands in 2022. What is more embarrassing is that Luyuan is currently in the second-tier camp, with a market share of only about 4%.
In 1995, Tsinghua University developed the first light electric vehicle in mainland China, and the following year, Luyuan founders Ni Jie and his wife followed suit, successfully developed and launched to the consumer market. In 2017, Jinhua Lvyuan Electric Vehicle Co., Ltd. was formally established. In terms of time, Luyuan can be described as a veteran brand of electric bicycles. However, after nearly two decades of development, Luyuan has lagged far behind other manufacturers.
The three giants of electric bicycles, Yadea, Emma and Tailing, were all founded slightly later than Luyuan, all around 2000. At present, Yadi is unique in the domestic electric two-wheeler market, with sales exceeding 14 million units in 2022, far exceeding other brands and accounting for 30% of the entire track. Emma is not far behind, and is the only brand that has exceeded 10 million sales. The sales of Luyuan have not yet exceeded 2.5 million units, and its strength is not outstanding in the second-tier camp.
According to its prospectus, Luyuan's revenue in 2022 will be 4.783 billion yuan, ranking fifth in the electric two-wheeler industry. It is almost the same as the revenue and market share of the fourth and sixth ranked Xinri. The revenue scale of Immediately, Golden Arrow and Maverick behind it is more than 3 billion yuan, and the market share is only less than 1.5 percentage points different from that of Luyuan, and the market situation of Luyuan can be imagined.
And among these rising stars, there is also the advantage that Luyuan envies: the blessing of capital power. Between 2016 and 2018, Yadea, Xinri and Maverick were listed on the Hong Kong Stock Exchange, Shanghai Stock Exchange and NASDAQ; In 2020, No. 9 Company successfully landed on the Science and Technology Innovation Board, and even Emma, who is similar in age to Luyuan, was listed on the main board of the Shanghai Stock Exchange in 2021.
It is worth noting that with the landing of the new national standard in 2019, the electric two-wheeler track will usher in new growth points, and the industry structure will be reshuffled. This is also why around 2019, major brands are seeking to go public. Luyuan's IPO in Hong Kong naturally wants to use capital power to further expand its advantages in the new changes in the industry, and of course, solve its own development crisis by the way.
Technology marketing is a two-pronged approach, and market feedback is mixed
According to the prospectus, from 2020 to 2022, the revenue of Lvyuan will be 2.378 billion yuan, 3.418 billion yuan and 4.783 billion yuan, respectively, and the net profit attributable to the parent will be 40 million yuan, 59 million yuan and 118 million yuan, respectively. Revenue growth is very strong, and profits are growing steadily, but in fact there are hidden concerns.
First of all, at the profit level, compared with other listed companies, the gross profit margin of Luyuan is low, indicating that its profit level is much lower than the level of the same industry. Taking the 2022 financial report as an example, the gross profit margins of Emma, Xinri and Maverick were 16.36%, 15.34% and 22.5%, respectively, while the gross profit margin of Luyuan was only 10.7%.
From 2020 to 2022, Luyuan's sales volume will be 1.472 million units, 1.948 million units, and 2.4246 million units, respectively, and the net profit allocated to each vehicle will be 27 yuan, 30 yuan and 49 yuan, respectively. That is to say, although Luyuan and Xinri and Xiaodao are at the same level in terms of revenue, they are not at the starting line in terms of profitability, and even the calf with revenue less than a billion is inferior.
Secondly, in terms of market, there are obvious regional problems in Luyuan. By the end of 2022, the number of offline dealers of Luyuan was 1,236, of which 828 were in the three regions of East China, Central China and South China. This can also be supported by the revenue data, the revenue of these three regions in 2022 will be 3.598 billion yuan, accounting for 75.22% of the revenue.
And these two hidden worries are mutually reinforcing. In recent years, in order to improve the market region and expand market share, Luyuan has embarked on the road of heavy marketing. From 2020 to 2022, its sales expenses were 121 million yuan, 192 million yuan and 259 million yuan, respectively, accounting for more than 5% of revenue. Yadea, which is known for its marketing, only accounts for about 4.5% of sales expenses.
At the same time, unlike other brands, Lvyuan has always taken scientific and technological innovation as the core of development. In 2019, it successfully developed liquid-cooled motor technology, graphene batteries, ceramic brakes and other high-tech configurations, making Luyuan's products particularly eye-catching in the track. However, heavy marketing and high R&D directly drove down the gross profit margin of Luyuan. And there are many green sources blessed by science and technology, and the market reputation is still mixed.
Taking liquid-cooled motors as an example, other brands have not followed up at present, and only the Luyuan family is singing a one-man show. From this point of view, liquid-cooled motors are difficult to be recognized by the industry in a short period of time. At the same time, at the consumption level, although liquid cooling technology can cool the motor and achieve the effect of improving the efficiency and stability of the motor, it is still questioned by consumers as a gimmick greater than practical.
Two-wheeled electric vehicles generally drive at low speeds, and the actual role of liquid-cooled motors is not strong. At the same time, since the launch, there have been many cases of oil leakage in liquid-cooled motors, and they are difficult to solve. It is worth noting that in recent years, the quality of Luyuan products has also repeatedly exposed quality problems.
On June 10, the Beijing Market Supervision Bureau announced the results of the random inspection of electric bicycles, of the 11 groups of unqualified products, Luyuan accounted for 2 groups. Quality issues not only pose safety hazards, but also create a poor experience. In fact, under the heavy marketing, Luyuan ignores the riding feeling and service of the product, which may be the primary problem to be solved.
The era of smart electric motorcycles is coming, and it is difficult to move without gold
With the rapid development of Internet technology, many brands have begun to focus on the online market, carrying out new media marketing through platforms such as WeChat Mini Program, Xiaohongshu and Douyin. It seems that the online market has become the development trend of the electric two-wheeler track, but on the contrary, because of the characteristics of electric two-wheelers, offline is the main battlefield, and online is just a performance of the rejuvenation of the track.
Therefore, if Luyuan wants to further improve its performance, it is nothing more than to fully lay offline channels. But the problem is that you can't expand your territory without sufficient funds. According to the prospectus, due to the construction of factories in Guangxi and Zhejiang, Luyuan's total borrowings have surged from 156 million yuan in 2020 to 944 million yuan currently, of which short-term borrowings are as high as 450 million yuan.
It is not difficult to understand why Luyuan is in a hurry to rush to the capital market. It is reported that the funds raised this time are mainly used in four aspects: scientific and technological research and development, channel laying, brand marketing and factory expansion. Among them, scientific research ranks first, and Luyuan, which is famous for its scientific and technological innovation, still needs to spend a lot of money on scientific research? It is indeed necessary in the current industry situation.
Electric two-wheelers are mainly divided into two major tracks: electric bicycles and electric motorcycles. At present, the development of electric bicycle tracks has entered a mature period, with serious homogenization and slow market growth. In recent years, with the concept of green travel, the rise in oil prices, and the boom of the takeaway delivery industry, traditional fuel motorcycles have also entered the era of rapid development of intelligent electrification like the automobile market.
According to the data, the sales volume of electric motorcycles in mainland China was only 1.9 million units in 2019, but three years later, this figure was 7.1 million units, with a ten-year compound growth rate of 12.3%, much higher than electric bicycles and electric light motorcycles. Moreover, the replacement of fuel motorcycles is a broad market space.
Therefore, whether it is traditional brands such as Yadi and Tailing, or Internet brands such as No. 9 and Maverick, they have bet on the electric motorcycle track as a new growth point. Including Qianjiang, Loncin and other traditional motorcycle giants have also begun to lay out electric motorcycle tracks. However, compared with these brands, Luyuan does not have much advantage, especially in intelligence and channels.
In 2020, the revenue of Luyuan electric motorcycle business was 245 million yuan, and in 2022, this data was 954 million yuan, and the revenue increased by nearly 4 times. According to data from the Motorcycle Branch of the China Association of Automobile Manufacturers, in the electric motorcycle market in 2022, Yadi ranks first with a market share of 61%, and Luyuan and Tailing rank second, with a market share of 9%, followed by Zongshen and Xinri, but there is not much difference with Luyuan.
It can be seen that now is the best time for Luyuan to expand in the electric motorcycle track. If the impact on the capital market is successful, the future of Luyuan may further consolidate its position, distance itself from the manufacturers behind it, seize the opportunity of the electric motorcycle market, and have greater development space and discourse.
epilogue
As one of the earliest enterprises in China to enter the electric two-wheeler track, the development of Luyuan is somewhat lagging behind. After the ban on motorcycles was imposed in 2003, it did not seize the opportunity of the rapid growth of the electric bicycle market, so that it changed from an industry leader to a follower. Now that the electric motorcycle is coming, the power of capital may become its hope to change the pattern of the track.
However, the data in the prospectus also exposes various pain points of Luyuan in the industry. Low profitability and ignoring the quality of service in the offline market are all urgent problems to solve. There is nothing wrong with taking technology first, but the more important thing is to return to the service and experience value of the product, in order to win the reputation of the consumer market and expand the influence of Luyuan in the track.