We initiate on NIU with a Strong Buy rating and $14 PT (see Price Target Disclosures). NIU Technologies is the leading market share electric scooter/light EV brand in China, with a wide portfolio across urban mobility, e-bikes, and kick-scooters.
Key Investment Thesis:
We base our rating on NIU increasing revenue to Renminbi 4.6bn in FY25E and Renminbi 5.5bn in FY26E, despite structural pressures we think consensus is underestimating (steep ASP declines -14% y/y in 1Q25, mix-down to kick-scooters, and channel destocking driven by regulatory changes), with our revenue forecasts 5-7% below the street on these risks.
NIU's ability to stabilize through cost take out, SE Asia expansion, and premium adoption as mix normalizes is materially undervalued by the market as of now. We put our $14 PT on 1.3X EV/Sales FY26E multiple, which includes both a position for our view of prudent valuation (discount to peers despite known headwinds) and premium for re-rating on execution.
We explicitly include in our model downside risk from structural margin pressure and US tariff risk, but view R/R as heavily skewed to the upside at current levels.
Bottom line:
We believe that NIU's reset margin base and scalability optionality in going international sets shares up for a sharp re-rating, with exceptional annualized upside; recommend aggressive accumulation.