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Vmoto (ASX:VMT) share price flat despite record sales

The Vmoto Ltd (ASX: VMT) share price is flat today despite the electric scooter maker announcing record sales in its market update.
The post Vmoto (ASX:VMT) share price flat despite record sales appeared first on Motley Fool Australia. –

electric scooter zooming along signifying surging share price

Australian electric scooter maker Vmoto Ltd (ASX: VMT) announced a market update on its activities for the third quarter ending 30 September.

The company reported record growth in sales of 7,009 units during the quarter, and record international sales year to date of 15,847 units.  This is 35% higher than the corresponding period in 2019, and 107% up on the same period in 2018.

The Vmoto share price is trading flat at 51.5 cents at the time of writing. 

Who does Vmoto do?

Vmoto is a Perth-based company that manufactures and distributes electric-powered two-wheel vehicles. Its factory is located in Nanjing, China.

The company has marketed itself as a premium maker of electric scooters with chic European design, coupled with German engineering. Vmoto is also involved in the manufacture of petrol-based scooters, however this represents a small part of its product line-up.

Highlights from today’s market update 

In 2020, Vmoto has undergone a strategic review on its operations to focus on the international sales of its high margin electric two-wheel product segment. Although 91% of sales are in China, the company wants to give more focus on the European market. 

The highlights of the announcement today include:

  • International sales in 3Q20 beat its biggest competitor Niu Technologies (NASDAQ: NIU) – 7,009 units for Vmoto vs 5,596 units for Niu Technologies. This validates Vmoto’s competitiveness in international markets.
  • A net cash position of AU$ 15.3 million. This is net of debt.
  • There are significant inquiries from the business-to-business (B2B) segment especially from food delivery and ride-sharing companies. Advanced discussions are under way to secure those contracts.
  • A European government’s initiative to subsidise the purchase of electric two-wheel vehicles will have longer term positive impact for the company.
  • The company has secured international orders for 6,512 units to be delivered post 3Q20.
  • The company has consistently delivered increasing sales every year since 2018.

The share price of Vmoto has increased by 117% this year at today’s trading. It has a market cap of AU$148.5 million at today’s value. 

The current state of electric motorcycles

The COVID-19 pandemic has accelerated the purchase of two-wheeled vehicles around the world – both by individuals as well as companies such as food delivery. In the city of London for example, new motorcycle registrations in 2020 were up by 31% compared to the same period last year. Food delivery company Deliveroo has seen its riders doubled in the UK within a year, with similar numbers across Europe. 

However, the electrical segment still only represents a small percentage of the motorcycle market.  In India, which is the world’s largest motorcycle market, it’s still less than 1%. 

The key to mass adoption of electric motorcycles will be the provision and ubiquity of Electric Vehicle (EV) charger stations in metropolitan areas. Some European governments  have begun discussions with private entities to install these EV stations around the major cities.

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Motley Fool contributor dsunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Vmoto (ASX:VMT) share price flat despite record sales appeared first on Motley Fool Australia.

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