Net profit plummeted by 80%, Mavericks electric can not start

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Source: Bullet Money Concept

On August 15, Mavericks Electric finally released the less than ideal second quarterly report for 2022 after nearly a month of “vaccinating”.

Data shows that in the second quarter of 2022, Maverick Electric achieved revenue of 827.6 million yuan, down 12.4% year-on-year; gross profit margin was 20.3%, compared with 22.7% in the same period last year; net profit was 14.4 million yuan, compared with 91.8 million in the same period last year. The net profit dropped by 84.3% year-on-year.

Not calculated according to the US GAAP, the adjusted net profit of Mavericks in the second quarter was 31.2 million yuan, and the net profit in the same period last year was 104 million yuan, and the adjusted net profit fell by more than 70%. Affected by the financial report, on August 15, the stock price of Maverick Electric closed down 6.71%, and the stock price was only US$6.8, a plunge of nearly 60% from the high point of the year. The dissatisfaction of the capital market with its performance can be imagined.

You know, this is the third consecutive quarter that Mavericks has handed over a dismal report card: the net profit in the fourth quarter of 2021 was 47.6467 million yuan, a year-on-year decrease of 18.21%; the net loss in the first quarter of 2022 was 29.5763 million yuan , an increase of 450.4% year-on-year.

In fact, such a financial report result is “horrible” for any company. The board of directors of Maverick Electric may be well aware of this. In the official publicity after the financial report was released, it focused on the growth of overseas markets. Highlights, and believe that this may lead to the rise of Mavericks’ annual performance.

According to the financial report data, the overseas sales of Mavericks Electric climbed to 28,558 units, a year-on-year increase of 309.1%. Among them, the sales of electric scooters exceeded 20,000 units, a record high.

But can this really save the Mavericks electric market?


Overseas and domestic

According to Mavericks’ analysis of overseas highlights in the financial report, it is believed that Mavericks’ electric scooter products represented by the “micro-travel” route are still performing strongly.

At present, Maverick’s electric scooter products have achieved a sales performance of 3 million US dollars on Amazon’s Prime Day in July, ranking first in the Prime Day list in Germany, France and Canada, and second in the United States and Spain. Italy ranks third.

In addition to the opening of the new store in Miami, the United States, Maverick’s electric scooter products are expected to enter Australia in the third quarter of this year, and its power-assisted bicycle BQi series will also be delivered to overseas markets. Therefore, Mavericks believes that its overseas expansion is accelerating, and the market increment space is being tapped, which is expected to become a new performance growth point.

But in fact, the main body of Niu Electric’s overseas sales is not electric bicycles sold in China, but electric scooters, which is a sub-category. And in a strict sense, the expansion of Mavericks in overseas markets is not due to the strong product power, but more due to the reduction in selling prices.

From the data released in the latest second quarterly report, it can be clearly seen that the sales of Mavericks in overseas markets increased by 153.8% in the second quarter, but its unit selling price dropped by 38%.

This data performance actually makes Mavericks’ so-called “use of technology and product power to expand overseas markets” seem a little thin.

In addition, the “products sold in overseas markets” that Maverick Electric has been talking about this time are only electric scooters, which belong to a different market segment from the two-wheeled electric bicycles that are mainly promoted in China, and the corresponding elements in the design are also different. , there are technically common parts, but the different parts are bigger.

This means that if Niu Electric wants to focus on overseas markets in the future, it must increase the research and development in the field of two-wheeled electric scooters while developing the existing two-wheeled electric bicycle product line in the domestic market.

However, in the financial report for the second quarter of 2022, the research and development expenses of Maverick Electric are only 44.5 million yuan, of which 7 million yuan of share-based compensation and an increased share-based compensation cost of 2.7 million yuan will be removed. In fact, Maverick Electric Energy The funding for scientific research is about 34 million yuan.

These R&D expenses are allocated to two major categories, and I am afraid that the R&D expenses of each category will be further reduced.

And this has also created a contradiction: Maverick Electric focuses on personalization and niche markets, and hopes to achieve a gradual increase in unit price and sales through the blessing of technology, brand and design; but it currently has to transfer its research and development strength to overseas markets. When the required electric scooters come up, their scientific research ability in the domestic market will inevitably decline, and the possibility that the final product will be accepted by young consumers may also decline.

This also has some deep connections with Maverick Electric’s products in the market in the first half of the year.

In addition, it is such a setting that just limits the market of Mavericks to a particularly niche area, and it also makes its market growth unclear.


Raising Prices and Inventory

Bullet Caiguan noticed that Mavericks Electric also highlighted the increase in unit gross profit brought about by the increase in its unit price when it announced its latest second quarterly report.

Relevant reports show that Maverick Electric’s “618” record this year has reached a new high. With a variety of hot-selling models and O2O innovative services of “online payment, car pickup in stores”, it has achieved omni-channel sales revenue of 340 million yuan; the company’s average bicycle in the second quarter. Revenue and gross profit margin further improved.

Commenting on the second quarterly report, Maverick Electric CEO Li Yan said that in the Chinese market Maverick Electric’s sales have been severely hit, and product development has been disrupted by the Covid-19 lockdown, “but due to retail sales from April 1 Higher prices and improved product mix, our average selling price (ASP) and gross profit margin have both improved, which provides assurance that we will accomplish our annual mission.”

In fact, it can be seen from the financial report data that in the second quarter of 2022, Mavericks sold a total of 208,900 electric two-wheelers, a drop of 17.4% compared with 253,000 in the same period last year. The unit price of bicycles rose by 7.5%. Experience from the market level shows that many popular models of Mavericks Electric have actually increased their prices by more than 10%.

In addition, based on the data from the first quarterly report and the second quarterly report, it can be concluded that in the first half of this year, Maverick Electric sold a total of 372,500 two-wheeled electric vehicles, a year-on-year decrease of 7.5%; of which domestic sales were 329,000, a year-on-year decrease of 15.7%, and overseas sales were 329,000. 43,000 units were sold, a year-on-year increase of 261%.

Regarding the sharp drop in domestic sales, Niu Electric explained in the announcement that it was mainly due to the decline in retail sales and logistics restrictions in first-tier cities such as Shanghai and Beijing due to the blockade of the new crown pneumonia epidemic. The sales in the above-mentioned first-tier cities usually accounted for the company’s total domestic sales. 35%-55%.

However, we can see from the corresponding inventory information that after the product price increase, the inventory of Mavericks electric vehicles has grown faster than before.

The second quarterly report of 2022 shows that in the six months ended June 30, 2022, the inventory of Mavericks was about 472 million yuan, and the figure at the beginning of the year was almost 270 million yuan, an increase of nearly 50%. The inventory in the first quarter was 345.9 million yuan, and the inventory in the second quarter increased by 126 million yuan, an increase of 36.46%. Compared to the same period last year, inventories increased by more than 123%.

“Miao Niu Electric officially adjusted its price on April 1. The current surge in inventory is certainly affected by the shutdown of major cities such as Shanghai and Beijing due to the epidemic. More importantly, its price has increased, which has brought about a shift in consumer choice. Chen Yan, an analyst at a consumer fund, told Bullets Caiguan, “In fact, for various electric vehicle companies, online sales have already become the main channel. It can be seen from the data released by several other companies that online sales are in the epidemic during the epidemic. The support given to enterprises during this period is beyond imagination.”

In his view, as an electric vehicle brand for young people, there is no reason for Mavericks not to make more use of Internet channels for sales, “Strictly speaking, young people have accepted the purchase of various consumer goods and even large consumer goods on the Internet. Therefore, it is not appropriate for Mavericks to completely push the increase in inventory and the decline in sales to the epidemic.”

He further said that the current two-wheeled electric bicycle industry is affected by the epidemic. According to Mavericks, everyone’s sales and profits should fall, but the performance of several other major players is not the same.

On July 13, Emma Technology released a performance forecast, which is expected to make a profit of about 690 million yuan from January to June 2022, an increase of about 120% over the previous year. The next day, Yadea Holdings also issued a notice, indicating that the company’s net profit in the first half of the year increased by no less than about 50% year-on-year.

From the comparison of financial report data, we can know the gap between Mavericks, Yadi and Emma. In 2021, the total sales volume of Mavericks’ two-wheeled electric vehicles will be 1,037,900 units, a year-on-year increase of 72.5%, and the sales volume will exceed 1 million units for the first time. During the same period, Yadea Holdings sold a total of 13.9 million electric two-wheelers, including 6.1 million electric scooters and about 7.7 million electric bicycles, an increase of 28.3% over 2020; Emma completed the sales of 8.67 million.

The average unit price of these two products is between 1,500 and 1,800 yuan. Chen Yan said, “Actually, I think Maverick’s continuous increase in prices after April 1st may be the one that has cut its sales by half. important reason.”

Figure / Mavericks Electric Tmall Flagship Store Figure / Mavericks Electric Tmall Flagship Store


Toys & Tools

Niu Electric disclosed in the announcement that the company is the world’s leading provider of urban smart travel solutions, engaged in the design, manufacture and sale of high-performance electric motorcycles, mopeds, electric bicycles and electric scooters, which can meet the different needs of users. travel needs.

However, from the observation of the bullet financial concept, comparing the products originally created by Mavericks with the new products released now, it is found that its current design is more inclined to pursue uniqueness, high-end and niche. For this reason Mavericks began to expand continuously. Circle, hoping to use the group effect similar to game equipment players to help the expansion of their products.

For example, in the cooperation between Mavericks and Razer, its latest two cars, NIU x RAZER SQi player limited model and NIU x RAZER NQiGT player limited model, not only built-in the classic elements of Razer, but also put Razer on the mouse and keyboard. Some special effects are also designed in it. This may be the basis for Mavericks to increase the unit price, and it is also the basis for its belief that it can improve the acceptance of young consumers.

Photo / NIU x RAZER SQi Photo / NIU x RAZER SQi

“Although this kind of cross-border cooperation is packaged as a new concept of consumption, it is basically the content of marketing and the corresponding laws of economics.” Chen Yan said to the bullet point of wealth, Mavericks is trying to stimulate the personality of young people by The way to obtain income is not impossible, but depends on the market atmosphere and the concentration range of consumption ability.

In his opinion, the products released by Mavericks in the past had modern elements, which could attract the attention of many young people, but now the eye-catching effect of Maverick’s new products is gradually degrading, or the halo is gradually lost, “The fundamental reason is that many young people People’s consumption outlook has undergone fundamental changes.”

The repeated epidemics in the first half of this year have made many young people realize that consumption is the cornerstone of life. Only by grasping a good and rational concept of consumption can life become more orderly and convenient.

Superimposing the current situation of young people’s unsatisfactory employment and income, young people have gradually returned to the nature of transportation when purchasing two-wheeled electric vehicles, rather than pursuing personalization, and have returned from “buying a toy” to “buying a tool”. “consumption concept.

Chen Yan believes that this is the main reason why Maverick Electric’s revenue in the first half of the year did not meet expectations, but Yadi and Emma’s profits exploded. “Under the current social background, people who buy electric vehicles and other people with certain spending power actually have a completely different market segmentation. These people who use electric vehicles as means of transportation prefer to buy them at the most reasonable price. products.” Chen Yan analyzed.

In his opinion, the target customers of Maverick Electric are more concentrated on those electric car players, who should use electric cars as their second cars, or highlight their own personalities with the personalization of vehicles .

Now, due to market uncertainty and lower income, these people have gradually become more pragmatic, and this kind of consumption centered on entertainment itself has decreased. This is also one of the real reasons why Maverick Electric’s second-quarter earnings report has dropped too quickly. .

In fact, the trend of the market is sometimes closely related to the trend of the economy. When economic expectations are not good, pragmatic consumption will become the mainstream of the market, and only when the economy is overheated will personalization become the vane of market development.

Therefore, if Mavericks wants to maintain a good development trend, they must adjust their business strategies, find ways to reduce costs while ensuring personalization and technological content, and launch affordable two-wheeled electric vehicles to gain a good market share. Otherwise, I am afraid that the market space will become more limited.

Sometimes, the change of the company’s play style is not the purpose, but there will be problems with the same.

*The title picture in the article comes from: Vision China, based on the RF protocol.

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