Yadea Holdings (01585.HK) In-Depth Investment Analysis Report

Now let me write the complete investment analysis report:

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Yadea Holdings has achieved a counter-trend breakthrough through its “asset-light + high turnover” model, with an expected 2025 net profit of no less than RMB 2.9 billion, representing a year-on-year growth of 128%[1]. Although the current 16-18x PE seems to be in the historical median range, considering its capital efficiency far exceeding the industry, continuously increasing market share, and the certainty of policy dividend release, this valuation level has strong support. 15 institutions including Citi have given a “Buy” rating, with a target price of HK$22.5 implying nearly 100% upside potential[2].

: The 16x PE valuation is reasonable, the asset-light model is sustainable in the short term, but close attention should be paid to profit margin pressures brought by the high-endization process and changes in the competitive landscape.

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After undergoing in-depth adjustments in 2024, Yadea Holdings achieved a strong recovery in 2025:

Financial Indicator	2024	2025(E)	YoY Change
Operating Revenue	~RMB 30 billion	~RMB 40 billion	+33%
Net Profit	RMB 1.27 billion	≥RMB 2.9 billion	+128%
Gross Margin	15.19%	Expected to increase	-
Average Unit Price	RMB 1,487	RMB 2,340-2,380	+57%
Market Share	~26%	26.3%	Steady growth

Yadea Holdings experienced a deep adjustment in 2024, before achieving a strong recovery in 2025. In 2024, affected by uncertainties in the new national standard transition period, weak terminal demand, and industry-wide de-stocking pressure, the company’s operating revenue fell 18.77% year-on-year, and net profit was halved to RMB 1.27 billion[3]. However, this downturn was fundamentally reversed in 2025 – the release of the “trade-in” policy dividend combined with the concentrated outbreak of replacement demand under the new national standard drove the company’s performance to achieve leapfrog growth.

: The national electric bicycle trade-in policy was fully implemented in 2025. Data from the Ministry of Commerce shows that the average monthly trade-in volume increased 285% month-on-month after the policy was implemented[3]. Yadea, relying on its channel advantage of over 40,000 offline stores, maximized the capture of this policy dividend.

: The company focused on developing mid-to-high-end product lines such as Crown and Modern, with sales of high-end models priced above RMB 3,000 accounting for over 50%. The average unit price increased from RMB 1,487 in 2024 to approximately RMB 2,380 in 2025, representing a significant optimization of product structure[3].

: Contribution from overseas markets increased to 35% of operating revenue (only 12% in 2019). The layout of million-unit capacity bases in Vietnam and Indonesia, as well as a North American R&D center, has opened up a second growth curve for the company[3].

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Yadea’s business model is the core secret behind its profitability surpassing that of most automakers. This model demonstrates significant capital efficiency advantages in both production and channels.

Indicator	Yadea	Traditional Automakers
Production Model	10 Smart Bases (assembly-focused)	Self-built vehicle factories + supply chain
Capital Expenditure	1/3-1/5 of automakers	100%
Fixed Costs	Low	High (allocated per unit)

The heavy-asset nature of the automotive industry determines that it needs to bear high fixed asset depreciation and supply chain integration costs, while Yadea’s assembly-focused model compresses capital expenditure to one-third to one-fifth of that of automakers, significantly lowering the break-even point[2].

Indicator	Yadea	Traditional Automakers
Number of Stores	Over 40,000	Direct/authorized stores, high cost
Store Model	Distribution franchise	Direct operation-focused
Expansion Cost	Low	High, long payback period
Inventory Turnover	~35 days	~70 days

Yadea’s distribution franchise model enables rapid expansion of its channel network, with inventory turnover days only half that of automakers, significantly leading in cash flow recovery efficiency[2]. Its 1% financial expense ratio is far lower than the 3%-5% of automakers, reflecting its excellent capital operation capabilities.

:

• Strong anti-cyclical ability: Two-wheeled electric vehicles are a rigid demand for short-distance commuting, less affected by economic cycles
• High capital efficiency: Low fixed costs bring more flexible strategic adjustment space
• Deep channel barriers: Over 40,000 stores form a huge sales network

:

• Product quality consistency: Reliance on external suppliers may bring quality control risks
• Complexity of dealer management: A large-scale distribution network requires an efficient management system
• Profit distribution game: Balancing the interests of dealers and the brand

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Yadea’s profitability significantly surpasses that of most automotive companies:

Company	Gross Margin (2024)	Net Profit Margin (2024)	Net Profit
Yadea Holdings	15.19%	6.6%	RMB 1.27 billion
BYD	~20%	5.35%	Higher
GAC Group	5.8%	~2%	Lower
Average of New Forces	5%-12%	Mostly loss-making	Loss-making

Although BYD’s gross margin is higher in absolute terms, Yadea achieves better net profit margin performance with lower capital expenditure and operating costs[2]. More importantly, Yadea’s 15.19% gross margin far exceeds GAC Group’s 5.8% and the 5%-12% range generally seen among new forces.

Indicator	Yadea	Traditional Automakers	Advantage Multiple
Inventory Turnover Days	~35 days	~70 days	2x
Financial Expense Ratio	1%	3%-5%	3-5x
ROE (Estimated)	~20%	8%-12%	1.5-2.5x

Yadea’s capital efficiency advantage is directly translated into higher Return on Equity (ROE) and faster cash turnover speed.

Yadea’s market share has steadily increased from 12% in 2015 to 26.3% in 2025, firmly ranking first in the industry[2]. Against the backdrop of the new national standard accelerating industry consolidation, the concentration of leading enterprises continues to increase, and Yadea is expected to further consolidate its leading position with its brand strength and channel advantages.

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Based on the latest data, the current valuation indicators of Yadea Holdings are as follows:

Valuation Indicator	Value	Industry Comparison
Price-to-Earnings (PE)	17.83x	Lower than BYD (23.5x)
Price-to-Book (PB)	3.63x	Lower than BYD (5.2x)
Dividend Yield	3.83%	Significantly higher than peers
Market Capitalization (Approx.)	HK$42 billion	Second in the industry

:

1. High Performance Growth
   : 2025 net profit is expected to grow 128% year-on-year, corresponding to a PEG of approximately 0.14 (17.83/128), indicating significant undervaluation

2. Industry Leader Premium
   : With a 26.3% market share ranking first in the industry, it has a basis for leader valuation premium

3. High Dividend Provides Safety Margin
   : A 3.83% dividend yield is relatively high in the manufacturing industry

4. Institutional Recognition
   : 15 institutions have given a “Buy” rating, with a target price range of HK$16-22.63[2]

:

1. Historical Valuation Range
   : Yadea’s historical PE fluctuation range is 10-25x, and the current 17.83x is slightly above the median

2. Performance Volatility
   : The halving of net profit in 2024 shows that its performance has significant volatility risks

3. Industry Ceiling
   : The growth rate of the two-wheeled electric vehicle market is stabilizing, making it difficult to support growth stock valuations

Scenario	2025 Net Profit	Reasonable PE	Target Price (HK$)
Optimistic	RMB 3.2 billion	20-22x	22-24
Neutral	RMB 2.9 billion	16-18x	18-20
Conservative	RMB 2.5 billion	12-14x	14-16

Based on the neutral scenario, a 16-18x PE corresponds to a target price of HK$18-20, implying approximately 53%-70% upside potential compared to the current HK$11.74[1].

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Competitor	Core Advantages	Threat Level
Ninebot	Intelligent configurations, 29.8% gross margin, high growth	High (accelerating channel expansion)
Aima Technology	Excellent cost control, high unit gross profit	Medium (follower)
Niu Technologies	High-end positioning, brand tonality	Low (limited scale)

Ninebot is accelerating its offline channel expansion, planning to exceed 20,000 stores within 3 years. Once its channel coverage capability is enhanced, it will pose a substantial challenge to Yadea[3].

: From November 2023 to April 2024, Yadea was listed on unqualified product lists by local market supervision departments 6 times, with 3,321 related complaints on the Black Cat Complaint Platform[2].

: Despite investing heavily in R&D (a total of RMB 3.45 billion from 2022 to 2024), Yadea’s average unit price remains in the RMB 2,000-3,000 range, and it faces challenges in breaking through the high-end market[3].

: The 2024 per-unit R&D cost was RMB 88, which increased instead of decreasing compared to RMB 72 in 2023, in sharp contrast to BYD’s per-unit R&D cost decrease of RMB 800[2].

: Over 90% of revenue comes from the domestic market. Compared to Aima’s European flagship stores and Niu’s direct layout in 48 countries, Yadea’s internationalization process is relatively lagging[3].

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Dimension	Rating	Explanation
Business Model	★★★★☆	Asset-light and high turnover, leading capital efficiency
Profitability	★★★★★	Net profit margin outperforms most automakers
Growth	★★★★☆	Driven by three wheels: policy + high-endization + globalization
Valuation Rationality	★★★★☆	16x PE is attractive
Risk Control	★★★☆☆	Product quality and competitive pressure

: HK$11-13 (corresponding to 2025 PE of 14-16x)

: HK$18-22 (based on 16-20x PE)

: HK$9 (20% decline from the buy price)

:

1. The asset-light model is sustainable in the short term, and its capital efficiency advantage cannot be quickly replicated
2. Policy dividend release will continue until 2026, providing support for performance
3. A 16x PE is attractive for a company with 128% performance growth
4. A 3.83% dividend yield provides a certain safety margin

• Sales and gross margin changes in the 2025 Q1 report
• Implementation of the new national standard and policy continuity
• Progress of Ninebot’s channel expansion
• Sales proportion of high-end products (Crown 6th Gen, VFLY)

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Yadea Holdings’ “asset-light + high turnover” model has demonstrated strong profitability and risk resistance in the current environment. The RMB 2.9 billion net profit not only outperforms 14 listed automakers but also verifies the feasibility and efficiency advantages of its business model. The 16x PE valuation is within a reasonable range, and it is attractive for an industry leader with 128% performance growth, 26.3% market share, and a 3.83% dividend yield.

However, investors need to closely monitor potential risks such as the high-endization process, challenges from competitor Ninebot, and product quality issues. Against the backdrop of the continuous release of new national standard replacement dividends, Yadea is expected to maintain high growth momentum, but the long-term upward shift of the valuation center still depends on breakthroughs in high-endization and substantive progress in internationalization.

: Cautious Add (Current valuation is reasonable, pullbacks are buying opportunities)

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[1] Sina Finance - “Yadea Holdings Expects 2025 Net Profit of No Less Than RMB 2.9 Billion” (https://finance.sina.com.cn/stock/zqgd/2026-01-06/doc-inhfkfun5967803.shtml)

[2] BT Finance/Sina Finance - “The Automotive Industry May Not Realize That Two-Wheeler Yadea Is More Profitable Than Four-Wheelers?” (https://cj.sina.cn/articles/view/2087801153/7c715141001016020)

[3] Three Vehicle Finance View/NetEase - “2025 Financial Report Insight: Yadea Breaks Through the Industry Profit Ceiling, Launches a High-Endization Breakthrough Battle” (https://www.163.com/dy/article/KJ19JDVA0556BZQM.html)

[4] Cailianshe - “HK Stock Announcement Highlights | Yadea Holdings Expects 2025 Net Profit of Over RMB 2.9 Billion” (https://cn.investing.com/news/stock-market-news/article-3152455)