---
title: "Net profit exceeds 1.2 billion! Yadea's profits halved"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/26384012.md"
description: "Yadea is accelerating its fall from grace. On December 27, Yadea Holdings, listed on the Hong Kong stock exchange, released an earnings forecast indicating that for the fiscal year ending December 31, 2024, Yadea expects to achieve a net profit between 1.2 billion and 1.4 billion yuan, compared to 2.64 billion yuan in the same period last year, reflecting a certain degree of decline. If calculated based on the upper limit of 1.4 billion yuan, Yadea's net profit for 2024 will drop by approximately 47%. Extending the timeline, this would mark Yadea's first earnings decline in five years. Behind the earnings decline..."
datetime: "2025-01-02T01:14:19.000Z"
locales:
  - [en](https://longbridge.com/en/topics/26384012.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/26384012.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/26384012.md)
author: "[侃见财经](https://longbridge.com/en/profiles/3206955.md)"
---

# Net profit exceeds 1.2 billion! Yadea's profits halved

Yadea is rapidly falling from grace.

On December 27, Yadea Holdings, listed on the Hong Kong stock exchange, released an earnings forecast indicating that for the fiscal year ending December 31, 2024, Yadea expects to achieve a net profit between 1.2 billion and 1.4 billion yuan, compared to 2.64 billion yuan in the same period last year, showing a significant decline. If calculated based on the upper limit of 1.4 billion yuan, Yadea's net profit for 2024 will drop by approximately 47%. Over a longer period, this marks Yadea's first earnings decline in five years.

Behind the earnings decline, there are naturally macroeconomic factors at play.

After the previous wave of replacements under the "New National Standard," the electric bicycle industry entered a downturn. According to institutional forecasts, domestic sales of two-wheeled electric vehicles in 2024 will decline by 9.1% year-on-year. With demand weakening across the entire industry, even Yadea, as the industry leader, couldn’t avoid the impact.

However, although the macroeconomic environment is indeed worse than before, Kanjian Finance found that under the same conditions, many "peers" have achieved solid results.

For example, Ninebot, which focuses on high-end electric vehicles, reported a net profit of 969.7 million yuan in the first three quarters of 2024, a year-on-year increase of 155.94%. Meanwhile, Aima, the second-largest player in the industry, achieved a net profit of 1.554 billion yuan in the same period, down 0.25% year-on-year. Although its performance also declined, the drop was significantly smaller than Yadea's.

# **Significant Decline**

In May 2018, the mandatory national standard "Safety Technical Specifications for Electric Bicycles" was released and officially implemented on April 15, 2019.

The new policy introduced stricter requirements for vehicle structure, configuration, components, and electrical safety. Additionally, it established a transition period for phasing out non-compliant electric bicycles.

The introduction of the "New National Standard" spurred replacement demand for electric bicycles. In 2019, production and sales of electric bicycles rebounded and surged in 2020, with output reaching 51 million units. In the following years, 2021 and 2022, demand remained high. According to data from the China Bicycle Association, by the end of 2023, China had over 400 million electric two-wheelers in use.

As the industry leader, Yadea reaped substantial benefits during those years. Taking 2023 as an example, Yadea sold 16.5 million electric two-wheelers (including 4.9 million electric scooters and 11.6 million electric bicycles). With total domestic sales of two-wheeled electric vehicles reaching approximately 55 million units in 2023, simple calculations show that one out of every three electric two-wheelers sold that year was a Yadea.

Why did Yadea sell so well? There are two main reasons: First, Yadea accelerated the expansion of its retail network during those years, establishing a vast sales system. According to statistics, by the end of 2023, Yadea Holdings had over 4,000 distributors in China, with more than 40,000 sales outlets under its subsidiary distributors—three times the number in 2019. Second, Yadea focused on the mid-to-low-end market, with products priced below 4,000 yuan. Data from Frost & Sullivan shows that electric bicycles priced above 3,500 yuan accounted for about 20% of sales, with high-end products making up 23% in 2023, while 77% of sales still came from mid-to-low-end products.

However, these former advantages have now become "shackles" for Yadea's further development as industry 红利消退. Take its focus on the mid-to-low-end market as an example. During the industry's rapid growth phase, this strategy ensured profit growth through "volume over price." But by 2024, this approach no longer worked. According to interim report data, Yadea's total sales of electric scooters and bicycles in the first half of the year dropped from 8.21 million units in the first half of 2023 to 6.3826 million units, a year-on-year decline of 22.26%. Following the sales slump, Yadea Holdings' revenue fell by 15.4%, and net profit dropped by 12.95% in the first half of the year.

From the current perspective, although Yadea still holds a market share advantage, its lead has narrowed significantly after the industry 红利消退. This is also reflected in its market capitalization. As of the close on December 31, Yadea Holdings' stock price was HK$12.94 per share, with a total market cap of HK$40.3 billion (approximately RMB 37.9 billion). In comparison, Aima Technology and Ninebot, listed on the A-share market, had market caps of RMB 35.3 billion and RMB 34.1 billion, respectively.

# **Difficult to Break the "Bottleneck"**

For Yadea, without industry 红利， its former strategy of "extensive retail network + low prices" has lost its effectiveness.

To break the bottleneck, Yadea must find a new strategy. Currently, the industry generally adopts two approaches: either moving upmarket or expanding overseas.

Both strategies are easy to understand. Moving upmarket means ensuring higher profits through premium pricing, so even if sales and revenue decline, profits can be maintained. Expanding overseas means seeking new growth in larger international markets.

However, for Yadea, both strategies present significant challenges.

First, regarding upmarket efforts, Yadea attempted this as early as 2021. It launched VFLY, a high-end mobility sub-brand, whose main selling points were lithium battery upgrades and smart display applications. However, due to its high price, VFLY failed to gain traction. Later, Yadea introduced the 冠能 series, but this premium sub-brand also underperformed.

In the highly homogenized electric bicycle market, achieving success in the premium segment is extremely difficult. Beyond R&D investment, sufficient differentiation is required to stand out.

For example, Ninebot, a leader in high-end electric bicycles, offers products that not only 智能监控车辆运行状态 but also boast strong interactivity and social features—users can easily track 骑行轨迹 and share 骑行体验 through a dedicated app, features Yadea lacks.

Second, regarding overseas expansion. In 2020, Yadea founder Dong Jingui proposed a global doubling plan: "In the future, Yadea must capture at least 35% of the market—one-third of the pie."

According to market research firm Counterpoint Research, Yadea holds about 28% of global sales. However, most of this comes from the Chinese market. In its 2022 interim report, Yadea stated, "As over 90% of revenue and operating profit come from sales of electric two-wheelers in China, we have not disclosed sales or shipment data for overseas markets."

Currently, all major electric bicycle companies are targeting overseas markets. Aima has set up flagship stores in Europe and is planning one for North America. Xinri exports to nearly 100 countries and regions through overseas agents. Niu has entered 48 overseas markets. It’s clear that Yadea will face increasing 阻力 in its overseas expansion.

In summary, after encountering difficulties domestically, Yadea faces an uphill battle to "break through." From this perspective, although this year's net profit has declined sharply, Yadea's "hard times" may have just begun.