Guotou Securities: Chinese brands accelerate their global expansion in the middle and large displacement motorcycle market, focus on Zhejiang CFMOTO Power (603129.SH) and others.

Guotou Securities issued a research report stating that the global mid-to-large displacement motorcycle market has vast potential, with sales of mid-to-large displacement motorcycles over 250cc expected to reach approximately 4 million units by 2024. Chinese brands are accelerating their entry into international markets while gradually surpassing imported brands in the domestic market through technological upgrades and product innovations, with exports expected to reach 359,000 units by 2024 (a year-on-year increase of 84.5%). Key companies to watch with global expansion capabilities include Zhejiang CFMOTO Power (603129.SH), Loncin Motor (603766.SH), and Zhejiang Qianjiang Motorcycle (000913.SZ). Key points from Guotou Securities are as follows: Vast potential in the global mid-to-large displacement motorcycle market By 2024, the global total number of motorcycles is expected to reach approximately 61.8 million, with the total number of mid-to-large displacement motorcycles over 250cc reaching about 4 million. Regional breakdown shows: 1) The European market with a total volume of about 1.45 million units, with a mid-to-large displacement penetration rate of about 60-65%, dominated by Japanese and European brands, while Chinese brands are rapidly gaining ground; 2) The Latin American market with a total volume of about 6.5 million units, with a mid-to-large displacement penetration rate of about 10%, led by Japanese and local brands, with some market share held by Indian and Chinese brands; 3) The American market with a stable total volume of around 500,000 units, with a mid-to-large displacement penetration rate exceeding 90%, dominated by Japanese and American brands; 4) The Southeast Asian and Indian market with a total volume exceeding 30 million units, dominated by small-displacement motorcycles, with a mid-to-large displacement penetration rate of less than 5%, mainly led by Japanese and local brands; 5) The Chinese market has seen sustained high growth in mid-to-large displacement sales in recent years, with domestic sales expected to reach 368,000 units by 2024, a 17% increase year-on-year. Key players in the global motorcycle market include Japanese, Indian, European, and Chinese brands, with: 1) Japanese companies Honda, Yamaha, Suzuki, and Kawasaki leading the global market share, offering products across high, medium, and low segments, with Honda being the global leader and expected to sell about 19.6 million units in 2024, commanding a global market share of around 31.7%; 2) Indian companies Hero, TVS, and Bajaj focusing on low-end products and holding a dominant position in the Indian market, while expanding gradually into emerging markets in Latin America and Southeast Asia; 3) European brands such as Vespa, BMW, KTM, and Ducati are known for their individuality and command a strong presence in their home European market; 4) Chinese brands are making breakthroughs in both directions, with companies like Loncin and Haojue entering emerging markets like Latin America through distribution channels, and brands like CFMOTO, Wuyang, Qianjiang, and Shengshi breaking into mature markets like Europe with mid-to-large displacement models. Chinese brands continue to enhance their capabilities and accelerate their internationalization efforts in the mid-to-large displacement motorcycle segment Domestic brands are focusing on strengthening their technological research and development capabilities to challenge imported brands in the domestic market. The development of internal combustion engine technology has slowed down, with international giants like Honda reducing their focus on developing mid-range powertrain platforms. Chinese brands have gradually accumulated technological expertise through reverse engineering, acquisitions, and joint ventures, and continue to increase investment in independent research and development, improving product quality and narrowing the gap with international giants. Since the release of the Chunfeng 450SR in 2022, which quickly outperformed the Kawasaki Ninja 400 in sales, Chinese brands have seen continued growth in mid-to-large displacement imports, with imports expected to decline to 46,000 units by 2024, a 63.9% decrease compared to 2022. Chinese brands are accelerating their expansion into international markets. After gaining validation in the domestic market, Chinese brands are gradually introducing their high-quality products to overseas markets, leveraging their performance and price advantages. Export sales of mid-to-large displacement motorcycles continue to grow, with exports expected to reach 359,000 units by 2024, an 84.5% increase year-on-year, and 208,000 units exported in the first five months of 2025, a 73.1% increase year-on-year. The top five exporters of mid-to-large displacement motorcycles are currently Shengshi, Chunfeng, Wuyang, Zongshen, and Qianjiang, with these five brands accounting for over 80% of exports, mainly targeting European and Latin American markets. Companies with strong technological, product, brand, and localization capabilities are expected to gain a competitive advantage in global expansion. 1) With strong technological capabilities, Chinese brands are transitioning from reverse engineering to independent innovation, with the introduction of domestically produced multi-cylinder large displacement engines planned for 2024, including the Chunfeng 675 and Shengshi 700 three-cylinder platforms, as well as the Chunfeng 500, Wuyang 500/660, and Qianjiang 600/800 four-cylinder platforms; 2) With a comprehensive product matrix, brands must cater to diverse market demands worldwide to cover global needs, with brands like Chunfeng and Wuyang entering new product cycles to accelerate their deployment in various displacement segments and categories; 3) Strong brand building and marketing capabilities are crucial for mid-to-large displacement motorcycles, as brand image plays a key role in consumer choices. Chinese brands are actively enhancing their brand visibility through events like motor racing and test drives, with brands like Chunfeng and Qianjiang participating in MotoGP and WSBK events; 4) Strong localization capabilities are essential for operating in international markets. While Chinese brands currently rely on agents and dealers for sales and after-sales services in overseas markets, companies like Chunfeng are gradually building local capabilities to develop new products tailored to local market demands, such as the 125NK for Europe and CFLITE for Latin America and Southeast Asia. Risks include global economic downturn, intensifying price competition in the motorcycle market, geopolitical and trade policy risks, and significant fluctuations in raw material prices.