Zhongjin: Peak season for electric vehicles sales may rebound, with rising gasoline prices expected to stimulate overseas demand for electric motorcycles.

CICC released a research report stating that domestic demand for electric two-wheelers in January-February is under pressure, mainly due to the impact of the switch to the national standard for electric bicycles and the withdrawal of subsidies for replacing old vehicles. The sales of electric motorcycles may remain relatively stable. Looking ahead, it is expected that industry sales in the second quarter of 2026 will rebound, driven by the combined factors of replenishing inventory demand, peak season sales, and new product launches. Overseas, since the rise in oil prices, sales of electric motorcycles in Hanoi and Ho Chi Minh City have increased significantly. The selling price of electric motorcycles is now close to that of similar displacement gasoline motorcycles. The increase in oil prices is expected to further strengthen the economic advantages of using electric motorcycles. With the cooperation of product development, infrastructure, and distribution channels, the penetration rate of electric motorcycles in developing countries and regions such as Southeast Asia is expected to reach a turning point. Some key points from CICC include: Pressure on domestic demand for electric two-wheelers in January-February, expected to rebound in Q2 of 2026 According to AVCLOUD data, the domestic sales of electric two-wheelers in China were 3.457 million units in January, a year-on-year decrease of 3.6%; and 2.988 million units in February, a year-on-year decrease of 37.9%. The pressure on domestic sales of electric two-wheelers in January-February is mainly due to the impact of the switch to the national standard for electric bicycles and the withdrawal of subsidies for replacing old vehicles. Sales of electric motorcycles may remain relatively stable. Looking ahead, it is expected that industry sales in the second quarter of 2026 will rebound, driven by the combined factors of replenishing inventory demand, peak season sales, and new product launches. The rise in oil prices amplifies the economic advantages of using electric motorcycles, and the penetration rate of electric motorcycles in regions such as Southeast Asia is expected to increase According to MarkLines data, the penetration rate of electric motorcycles in Southeast Asian countries by 2025 is approximately 6%, with Vietnam reaching 22%, while other countries have a penetration rate of only around 1%. Since the rise in oil prices, the sales of electric motorcycles in Hanoi and Ho Chi Minh City have increased significantly, and some brands have also reduced prices. CICC points out that most countries in Southeast Asia have introduced policies to support the transformation of motorcycles to electric power, with clear targets for electrification and support for improving supporting facilities. The selling price of electric motorcycles is now close to that of similar displacement gasoline motorcycles. The rise in oil prices is expected to further strengthen the economic advantages of using electric motorcycles. With the cooperation of product development, infrastructure, and distribution channels, the penetration rate of electric motorcycles in developing countries and regions such as Southeast Asia is expected to reach a turning point. Yadea and Aima have already deployed production capacity in the Southeast Asian market, with Yadea's overseas electric motorcycle sales leading domestic manufacturers and expected to benefit first. Valuation and Recommendations It is recommended to maintain the earnings forecasts for Aima Technology Group (603529.SH), Yadea (01585), and Ninebot Limited (689009.SH) for 2025-2026, with the introduction of earnings forecasts for Aima Technology Group/Yadea for 2027 at 31.8/37.8 billion yuan respectively. The earnings forecasts for Ninebot/Niu Technologies Sponsored ADR Class A (NIU.US) for 2026-2027 is also maintained. Currently, the stock prices correspond to Aima/Yadea/Ninebot/Niu's 26EP/E ratios of 9.9/9.6/14.0/10.3x. The target prices for the above companies are maintained at 14.3/14.7/22.5x/15.5x for 2026EP/E, respectively, with an upward potential of 45%/50%/60%/50% from the current stock prices. Risk Factors Acceptance of new products under the new national standard for electric bicycles may not meet expectations; the effect of overseas electric motorcycle policies may fall short of expectations.