Dongwu Securities: Motorcycles go overseas to open a second growth curve, recommend Chunfeng Power (603129.SH), etc.

The Zhitong Finance App learned that Dongwu Securities released a research report saying that the overseas motorcycle market space is vast. Currently, exports of Chinese brands are shifting from small-displacement brands to overseas with large emissions, switching from a manufacturing model to a consumer goods model, and competitiveness continues to improve, which is expected to open up a second growth curve for domestic motorcycle companies. We recommend Chunfeng Power (603129.SH) +Longxin GM (603766.SH, follow) +Qianjiang Motorcycle (000913.SZ, follow), which has a high market share in high-displacement exports and continues to increase its overseas share.

The main views of Dongwu Securities are as follows:

The overseas motorcycle market has nearly a trillion yuan space, and there is great potential for exports

In terms of sales volume, in 2024, the overseas motorcycle market sold more than 40 million units, with a large displacement of about 3.44 million units, which is 8-9 times the domestic space; in terms of revenue, the size of the overseas motorcycle market in 2024 was 932 billion yuan, nearly a trillion dollar market. According to the Motorcycle Chamber of Commerce, in 2024, Chinese brand motorcycles were exported 1.02 million units, with an overseas market share of 25.7%. Of these, only 359,000 units were exported with large displacement, and the overseas share was 10.4%. There is plenty of room for Chinese brands to increase their overseas share, and there is great potential for exports.

Europe, America, and Australia lead the amusement market, while Asia, Africa and Latin America dominate the market for road vehicles

In terms of revenue, major overseas markets include Southeast Asia (230 billion yuan), South Asia (270 billion yuan), Europe (160 billion yuan), Latin America (130 billion yuan), and North America (56.2 billion yuan). The demand structure and competitive pattern of different markets are very different. Japanese brands dominate the world, European and American brands lead the high-end market, while local brands are flourishing everywhere.

In terms of segmentation, North America: the United States accounts for 90%, the high-end market with a scale of about 600,000 vehicles plus large displacement penetration rate of 90% or more, mainly Japanese+local brands; Latin America: the mid-range market with a scale of about 4.5 million vehicles and continuous expansion + large displacement penetration rate of 10%, mainly Japanese+local brands, all have a certain share. In addition, Chinese brands are OEM and export for local brands; the five core European countries: the high-end market with a scale of over 1 million vehicles and continuous expansion, with a large emission penetration rate of 60%-70%, is driven by strong demand for fun and play Small under 125cc Displacement vehicles are popular, with Japanese and European brands leading the way, while second-tier countries such as Italy and Chinese brands have also made breakthroughs; Turkey: a volatile market that broke out in '22, mainly road cars, local brands and Japanese brands, Indian and Chinese brands also have a certain share, with spring wind accounting for 2.5%; Southeast Asia/South Asia/Africa: low-end market with a total sales volume of over 30 million vehicles in Southeast Asia/South Asia, the largest market in the world, led by Japanese+India; Oceania: 100,000 High-end markets with large emissions above vehicles, mainly Japanese, followed by European and American brands .

From OEM to independent brands going overseas, when Chinese brands go overseas in large quantities

In 2016-2024, China's total fuel motorcycle export sales increased from 6.93 million units to 1.02 million units. Of these, in 2024, products under 150cc accounted for 83% of sales, and 250cc or more accounted for only 3%. Motorcycle exports are still dominated by small displacement, most of which are OEM models. High-displacement exports have accelerated since '23, CAGR 67.5% in 22-24, and 359,000 high-displacement vehicles in '24. In terms of export flow, large emissions were mainly exported to the European and Latin American markets, which accounted for 69% in 2024; in terms of split increments, the main incremental markets for large displacement exports in 2024 were the CIS/Latin America/Europe, which contributed 7.5/147/30,000 vehicles in 2024 (accounting for 27.5%/53.9%/11% of the increase, respectively).

Three autonomous brands, Chunfeng/Longxin/Qianjiang dominate high-emission exports

The export share of Chunfeng/Longxin/Qianjiang in 2024 was 18.6%/14.2%/11.6% respectively. Among them, Chunfeng showed the most impressive performance. The high-displacement export volume rose from 0.49,000 vehicles in 2020 to 66,800 vehicles in 2024, with a 4-year CAGR of 92.15%, becoming the leading high-displacement export market in 2024.

Risk warning: geopolitical risks, fluctuations in overseas economies, intensification of trade wars.