Event: On August 11, 2025, Zhejiang Cfmoto Power Co.,Ltd. released its 2025 interim report. In H1 2025, the company achieved revenue of 9.855 billion yuan (+30.90%), net profit attributable to shareholders of 1.002 billion yuan (+41.35%), and adjusted net profit attributable to shareholders of 951 million yuan (+38.38%). For Q2 2025 alone, the company recorded revenue of 5.605 billion yuan (+25.45%), net profit attributable to shareholders of 587 million yuan (+36.04%), and adjusted net profit attributable to shareholders of 541 million yuan (+30.21%).
H1 2025 Electric Division Shows Outstanding Growth, ATV Leadership Position Remains Solid. 1) All-Terrain Vehicles: H1 2025 sales volume reached 101,800 units with sales revenue of 4.731 billion yuan (+33.95%). Export volume accounts for 74.05% of the industry total. The core new product U10PRO performed excellently at retail level. CFMOTO brand continues to lead market share in Europe, while GOES brand ranks among the top six. 2) Motorcycles: H1 2025 sales volume reached 150,300 units, with domestic/export sales of 79,100/71,300 units respectively. Premium positioning and globalization drove steady revenue growth (3.346 billion yuan/+3.03%), with domestic sales revenue of 1.697 billion yuan (+17.35%). Motorcycles above 200CC displacement lead the industry, while export revenue reached 1.649 billion yuan. The completion of distributor rights transition in five European countries empowers long-term development, and CFlite brand penetration continues to strengthen. 3) Electric Two-Wheelers: H1 2025 sales volume reached 250,500 units with sales revenue of 872 million yuan (+652.06%). This new growth curve shows impressive performance, with multiple new products launched targeting female consumers, premium segment, and high-performance markets, continuously enriching the product portfolio.
Q2 2025 Net Profit Margin Improved with Optimized Cost Structure and Enhanced Operational Efficiency. 1) Gross Margin: Q2 2025 company gross margin was 27.35% (-3.47pct), possibly due to tariff impacts on four-wheeler business and increased proportion of relatively lower-margin electric business. 2) Net Margin: Q2 2025 net margin was 11.04% (+0.95pct), showing improvement possibly due to overall cost optimization. 3) Expenses: Q2 2025 company sales/administrative/R&D/financial expense ratios were 5.34/4.03/5.37/-1.18% respectively, changing by -3.87/-0.64/-0.66/+0.56pct year-over-year. Sales expense ratio declined significantly, while administrative expense ratio optimization led to improved operational efficiency.
Investment Recommendation: From an industry perspective, the global ATV market shows stable volume with quality improvement, and domestic consumer education is strengthening. Motorcycle exports are trending upward, with consumer upgrade and replacement demand plus overseas market expansion driving industry growth. Trade-in programs and intelligent upgrades are expected to further stimulate demand. From a company perspective, as the domestic industry leader, brand cultivation and market expansion are accelerating, with a continuously enriched product portfolio. Four-wheeler business focuses on large displacement and scenario-specific segments, while two-wheeler new products balance performance and comfort, and electric vehicles emphasize personalized and intelligent design. Increasing the proportion of Mexico and Thailand-based production for US market output, strengthening Mexico-based local component manufacturing and procurement, and continuous supply chain upgrades are expected to support sustained revenue and profit growth. We forecast the company's net profit attributable to shareholders for 2025-2027 to be 1.954/2.443/2.998 billion yuan respectively, corresponding to EPS of 12.81/16.01/19.65 yuan. Current stock price corresponds to PE ratios of 21.08/16.87/13.74x respectively. We maintain a "Buy" rating.
Risk Warning: Stricter industry policies, changes in international trade conditions, tariff increases, exchange rate fluctuations, intensified market competition, R&D progress below expectations, etc.
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