New Stock Preview | "A+H" dual listing, can Zhejiang Taotao Vehicles (301345.SZ) open up new opportunities for capital and growth?

In the background of the global trend of electrification and the acceleration of capital market integration, Zhejiang Taotao Vehicles (301345.SZ), a listed company on the Shenzhen Stock Exchange, recently submitted an application for a main board listing on the Hong Kong Stock Exchange, aiming to build an "A+H" dual capital platform. It is understood that Zhejiang Taotao Vehicles, with its stable second place market position in the global low-speed electric vehicle field and sustained strong financial growth trajectory, has become a leader in outdoor electric travel. This listing in Hong Kong aims to take advantage of the unique advantages of Hong Kong as an international financial center to attract a broader range of international institutional investors, optimize its capital structure, and provide more abundant and flexible funding support for its industry integration, technological research and development upgrades, and forward-looking layout on the international stage. In the era of intensified global competition and accelerated technological innovation, can the "A+H" dual listing provide enough strategic depth and capital moat for Zhejiang Taotao Vehicles to support its sustainable growth and establish a long-term competitive advantage? 99% of revenue locked overseas, focusing on high value-added markets Zhejiang Taotao Vehicles' business layout core focuses on two highly prosperous sectors: electric travel products (low-speed electric vehicles, electric two-wheelers, etc.) and outdoor specialty vehicles (ATVs, off-road motorcycles, etc.). The company strategically avoids the fierce competition in the domestic market, with more than 99% of its revenue locked in high value-added overseas markets, especially in North America. It is this vertical positioning in outdoor leisure and functional transportation tools that has built a solid market barrier. According to data from Frost & Sullivan, as of 2024, Zhejiang Taotao Vehicles has firmly established itself as the second largest player in the global low-speed electric vehicle industry, accounting for approximately 8.4% of the global market share. The construction of its competitive barriers is not only based on traditional economies of scale but also on its deep understanding of core market regulations and refined channel penetration. In addition, the company has established a multi-tiered sales network and adopted a diversified distribution strategy to ensure market breadth and product depth. In the field of electric travel, the company's core competitiveness is also reflected in its strong supply chain flexibility and rapid product iteration capabilities, allowing it to quickly respond to the changing demands of overseas consumers for fashionable, safe, and high-performance products. During the reporting period, the company achieved rapid and steady revenue growth: in 2022, 2023, and 2024, its operating income reached approximately RMB 1.766 billion, 2.144 billion, and 2.977 billion respectively, with a particularly high year-on-year growth rate of 38.82% in 2024. With the rapid expansion of revenue scale, the company's net profit in 2024 reached approximately 431 million yuan, a growth of over 50% year-on-year. Entering 2025, in the seven months ending July 31st, the company's revenue was approximately 2.068 billion yuan, continuing its strong growth momentum compared to the same period in 2024 at 1.678 billion yuan. In terms of profitability, the company's gross margin increased from 35.2% in 2022 to 37.3% in 2023, although it slightly decreased to 34.7% in 2024. However, in the seven months ending July 31st, 2025, the gross margin rebounded to 40.2%, higher than the industry average, which the company attributed to its complete supply-production-sales system and high self-sufficiency rate of core components, resulting in a structural cost advantage under comprehensive synergy effects. To cope with the complexity of the global trade environment and deepen core market operations, Zhejiang Taotao Vehicles adheres to its strategic positioning as the "world's factory" and has established coordinated production capacity layouts in China, Southeast Asia (Vietnam), and North America (Texas), to promote global production footprint and enhance localized supply chain construction. For example, the latest TEKO brand was officially launched in North America in September 2025 and began local production of vehicles in Texas. In addition, the company owns a multi-level independent brand matrix including DENAGO, GOTRAX, TEKO, and TAO MOTOR, tailoring differentiated operations to precise market demand, which is a key factor in maintaining its competitive advantage. Despite strong growth, the company also faces significant structural challenges, mainly in its high dependence on a single market and major customers. Over 90% of the company's revenue comes from overseas, with 70% from the U.S. market in 2024. Additionally, the top five customers in 2024 accounted for approximately 34.9% of the revenue. Furthermore, the company faces risks from the China-US trade tensions, including the 337 investigation initiated by the U.S. International Trade Commission and anti-dumping and countervailing duty investigations on electric travel products. If ruled unfavorably, the company may face additional high tariffs or retroactive duties, directly impacting its profit model. However, the company is actively adjusting its global production layout and implementing strict transfer pricing rules and internal control measures to optimize risk structure and ensure international compliance. H-share fundraising enhances production capacity and R&D, high dividends run parallel with refinancing The issuance of H-shares in Hong Kong can be seen as a key step for Zhejiang Taotao Vehicles to improve its capital structure, enhance international influence, and implement long-term growth strategies. The company also stated in its prospectus that seeking a listing on the Hong Kong Stock Exchange aims to provide more funds for its business development and expansion, establish an additional financing platform, and further strengthen its corporate image and attract overseas talent. According to Zhejiang Taotao Vehicles' prospectus, the net proceeds from the H-share fundraising will be invested in several core growth areas: expanding production capacity and enhancing the intelligence level, efficiency, and global coverage of production infrastructure will account for the largest proportion of funds. To meet the increasing demand for electric travel products and power sports products, the company plans to upgrade the digital and intelligent infrastructure of its existing production base in China and establish new production bases overseas to enhance global supply capabilities and risk mitigation. Secondly, some funds will be used to enrich and expand product and service offerings, and explore the application of cutting-edge technologies in products. This includes investing in research and development to drive innovation in core components such as battery packs, hub motors, engines, and frames to further enhance product performance and consolidate structural cost advantages. In terms of product diversification, the company plans to introduce innovative 4-seat, 4+2 seat, and 6-seat models in the low-speed electric vehicle sector, as well as high value-added products such as panoramic camping vans and multi-functional vehicles for site use. It is worth noting that Zhejiang Taotao Vehicles has expanded its business into cutting-edge areas driven by artificial intelligence and automation technology. In July 2025, the company reached strategic cooperation agreements with companies such as Shanghai Kepler Siasun Robot&Automation and Hangzhou Yushu Technology, officially entering the field of humanoid Siasun Robot&Automation, aiming to transform technological innovation into long-term value and sustainable growth momentum. Although the R&D investment as a percentage of revenue (2.8% for the first seven months of 2025) may lag behind the industry average, the company emphasizes that its R&D strategy is highly focused on creating advanced technology and providing better driving experience, supported by proprietary research and development design and core component self-production. On the shareholder return front, Zhejiang Taotao Vehicles has adopted a consistent cash dividend policy after listing. Between 2022 and 2024, the company announced a total of approximately RMB 382 million in cash dividends, accounting for about 41.6% of the net profit attributable to the company's owners during the same period. The high dividend policy reflects the company's commitment to shareholder returns, but there are also discussions about its internal resource allocation efficiency and strategic urgency while ensuring high dividends and conducting A+H refinancing operations simultaneously. In terms of corporate governance and compliance, the dual listing structure of A+H will require Zhejiang Taotao Vehicles to adhere to more stringent regulatory requirements in both markets. Overall, Zhejiang Taotao Vehicles is trying to use this dual listing to not only inject new capital power into its expansion but more importantly, to build a solid compliance and governance moat through the supervision and standards of the international capital market to ensure its status as a leader in the global electric travel field can continue to grow steadily.