China Securities Co., Ltd.: The dynamic sports industry is in the fast lane of growth. China's motorcycle market share and profit margin continue to rise.

China Securities Co., Ltd. released a research report stating that the power sports industry is in a fast lane of growth, with consumption upgrading and increasing demand for leisure and entertainment driving the penetration of all-terrain vehicles and medium to large displacement motorcycles. Chinese motorcycle companies have improved their product strength in recent years, with obvious cost-performance advantages, and are expected to seize market share overseas, continuously optimize product structure, and increase market share and profit margin. Looking ahead to the whole year, overseas demand for motorcycles is expected to continue to grow, with Japanese companies guiding continued growth in the motorcycle business, and Chinese companies expected to seize market share in the global market; the four-wheeled vehicle market is expected to grow in the medium to long term, with Chinese brands actively expanding and poised to catch up with industry leaders. The main points of China Securities Co., Ltd. are as follows: Two-wheelers: Emerging markets are growing rapidly, with strong performance from Japanese and Indian companies In 2025 Q4, Europe was temporarily under pressure from the high base brought by Euro 5+ (Germany, France, UK, Italy, Spain, Denmark, respectively -26.9% / +0.5% / -68.6% / -26.7% / -33.5% / -42.3%), while Southeast Asia remained steady (Indonesia, Vietnam, Thailand respectively +7.9% / -6.8% / -1.3%), and the Indian and Latin American markets maintained a high growth momentum (India, Pakistan, Argentina, Mexico respectively +16.9% / +25.3% / +29.8% / +20.0% / +45.1%). Benefiting from the growth in emerging market demand and the seizure of market share in mature markets, Japanese and Indian brands achieved continuous growth in sales and revenue in both their domestic and export markets; demand in high-end markets such as Europe and the US remained under pressure, with intensified competition and sales pressure on local brands. The motorcycle consumption structure is changing, with intensified competition in mature markets, and differences in unit price, unit profit, and profit margin performance among European, American, Japanese, Indian, and Chinese companies. Four-wheelers: North American demand rebounds, with differentiated performance among leading brands Benefiting from the low base effect and the stimulus of interest rate cuts on consumption, North American demand rebounded in Q4, while European demand weakened. Leading brands continued to adopt promotional strategies to clear channel inventories, but tariff costs and increased expenses continued to suppress the profit margins of leading manufacturers. In 2025 Q4, Arctic Star's all-terrain vehicle business revenue grew by low double digits, with a slight decline in profit margin; Yamaha's revenue declined by low double digits, with continued losses in profit; Kawasaki's all-terrain vehicle volume increased in price, with stable revenue; Destron special vehicles saw a double-digit decline in revenue and a decline in profit margin. Chinese companies: A new journey towards globalization, with continued growth for Taotao and Linhai In 2025 Q4, Chinese enterprises actively expanded into overseas markets, seizing global market share. Both Taotao and Linhai saw growth in revenue and profit, with their revenue reaching a historical quarterly high. At the same time, Taotao began to expand into other fields such as Siasun Robot & Automation and robotic dogs. Chinese motorcycle companies, based on their core business growth, are gradually exploring a second growth curve. Outlook: Japanese companies guide continued growth in motorcycles, with differentiation among four-wheel brands In terms of two-wheelers, Japanese companies predict that motorcycle sales volume and revenue will continue to grow in the 2025 and 2026 fiscal years. After two consecutive years of decline, Harley expects to stabilize in 2026; it is expected that global market competition will continue to intensify, with Chinese companies poised to seize market share. In terms of four-wheelers, overall industry demand is recovering, leading brands are optimizing inventory levels, with an optimistic outlook for 2026; second-tier brands such as Kawasaki and Chunfeng are actively expanding, while Yamaha is gradually falling behind; Taotao's dual-brand layout is expected to continue to seize the golf cart market, likely outperforming industry and leading brands such as E-Z-GO and Yamaha, and continuously increasing market share. Risk Warning: Overseas demand lower than expected, risks of freight and exchange rate fluctuations, risks of trade friction and imposition of tariffs.