NIU Technologies (NIU) Overview

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NIU Technologies (NIU) – the world’s leading provider of smart urban mobility solutions.

Founded in 2014. NIU designs, manufactures and sells high-performance electric scooters, motorcycles, bicycles and kick-scooters.

Demand: Scooters are a very convenient means of traveling. Anyone who has been to SE Asia has definitely noticed that the place is packed with scooters. These scooters start to be replaced with electric ones. Scooters are also popular in other regions of the world, notably Latin America, Europe and Africa.

Supply: The company has doubled its production capacity last year. And now it's about 2 mln units/year. NIU has developed a rich network of stores around the world (3108 in China alone).
NIU has several competitors, but has a few advantages over them. Mainly it benefits from lower labor costs.

Financials

For a young company, NIU has a strong balance sheet. Positive Net Income and Cash Flow. The company does not need to issue new shares to finance its CAPEX.
It benefits from access to cheap funding as China has been easing its monetary policy. They can afford to do that as the latest inflation figure was 0.9% in China.

In 2021 revenues were up almost 52%. At about $581mln, slightly more than the current Market Cap (P/S ratio > 1, rare thing).

Nevertheless, the price went down during the latest few months because of all-out war concerns but also because Q4 & Q1 are traditionally soft quarters, due to weather. Gross margin slightly lower reflecting higher commodity and shipping costs. Which are expected to fall onward.

This year the sales are estimated to go up roughly 40%.

Valuation

52 week high of $44/share, low of $7.50.

All the analysts polled by Yahoo Finance, have a BUY/STRONG BUY stance.

The average PT is $36.

Latest coverage, comes from Citigroup, it placed a price target of $35, which implies a roughly 300% upside potential.

Downside perceived as being somewhat limited as China vowed to support the market a few days ago.

submitted by /u/orso-nero
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