777poker| CITIC Construction Investment: Demand for two-wheeled and four-wheeled vehicles has stabilized in 24 years. The share and profit margins of Chinese motorcycle companies are expected to increase

Zhitong Financial APP learned that Citic Construction Investment released a research report that overseas motorcycle companies have disclosed 2024Q1 financial results one after another, the emerging market demand performance in the field of two-wheelers is better than that of Europe and the United States, Japanese and Indian companies have achieved growth, European and American brands are under temporary pressure, while overseas consumption upgrading trend is significant, promoting unit price and profit margin. In the four-wheel vehicle sector, due to the previous high inventory level and weak demand, the head manufacturers' promotion led to a decline in profit margins, but the current demand has stabilized and the high-end market segment continues to grow, and follow-up inventory and demand are expected to continue to improve. Looking forward to 2024, the demand for two-wheelers and four-wheelers will remain stable, and the trend of structural upgrading will continue, and the share and profit margins of Chinese motorcycle enterprises are expected to increase.

The views of CITIC Construction Investment are as follows777poker:

Two-wheeled cars: growing demand in emerging markets and structural upgrading overseas.

On the demand side, demand in emerging markets is growing, and inflation in Europe and the United States has led to a decline in demand, so Japanese brands such as 2024Q1 Honda, Yamaha, Kawasaki and Suzuki, as well as Indian brands such as Heroes, have generally achieved quantitative growth, while European and American brands are under short-term pressure. From the structural point of view, the consumption of overseas motorcycle market is upgraded, the demand for medium and large displacement and high-end models is growing, the optimization of product structure promotes the increase of unit price and profit, and the profit margins of overseas enterprises are generally optimized. Looking forward to 2024, demand from Europe, the United States and emerging markets is expected to maintain steady growth. Japanese companies are expected to achieve single-digit growth in mature markets such as Europe, and maintain a steady growth trend in Asia-Pacific and other emerging markets. European and American enterprises are affected by Japanese and Chinese brands to seize the share, sales are expected to decline. China exports, Asia, Africa and Latin America account for nearly 90% of fuel and off-road motorcycle exports, and the export structure continues to improve. Chinese motorcycle companies are expected to enjoy demand growth in emerging markets and overseas consumption upgrading dividends.

Four-wheeled vehicles: demand recovery inventory decline, there are incremental opportunities in the high-end market.

From the demand side, European and American industry demand stabilized and gradually rebounded, mainly due to the promotion of various brands, volume increases and prices fell, and the income and profits of the head manufacturers generally declined. From the inventory point of view, the current Polaris dealer inventory is flat, with the continuation of 2024Q1 brand promotion activities, industry channel inventory is expected to return to a healthy level. From the structural point of view, UTV/SSV sales growth and share increase, the future global all-terrain car market is mainly driven by high-end products, North American leading brands such as Polaris and Bombardier occupy product and channel advantages, as Japanese and Chinese brands increase the layout of the high-end market, product structure and profit margins are expected to continue to optimize. Looking ahead to 2024, the head manufacturer expects the all-terrain vehicle market to recover, and the UTV model will perform strongly. The head manufacturer will iterate over the products. Kawasaki's Mexican plant will begin mass production, doubling its production capacity from 50, 000 to 100000, with a volume target of about 60% growth in fiscal year 2024. China's exports, European and American exports account for more than 70%, European exports continue to grow, North America begins to replenish inventory, and the overall increase in export average prices reflects the trend of overseas structural upgrading. The export scale and structure of Chinese motorcycle enterprises are expected to increase quarter by quarter.

Investment suggestion: the power sports industry is in the fast track of growth, consumption upgrading and increased demand for leisure and entertainment promote the penetration of all-terrain vehicles and medium-and large-displacement motorcycles. Chinese motorcycle enterprises have improved their product strength in recent years and have obvious cost-effective advantages. It is expected to seize overseas market share, product structure is constantly optimized, market share and profit margin continue to improve.

Risk tips: lower-than-expected overseas demand, risk of freight and exchange rate fluctuations, trade friction and tariff risk.