The trend of the two-wheeler industry is upward and the structure is better

3.3.2. Fuel motorcycle exports are expected to usher in a broad space and upward profitability

Fuel motorcycle exports accounted for a high proportion, small displacement accounted for the absolute majority. With the introduction of the ban and restriction policies across the country, industry sales continued to decline, and the proportion of exports gradually increased, supporting the development of the motorcycle industry, and the export volume of motorcycles accounted for 44% in 2021, and the foreign income of many motorcycle companies accounted for nearly 50%. According to the Motorcycle Chamber of Commerce, in the export sales of two-wheel fuel motorcycles in China from January to August 2022, small-displacement motorcycles of 250cc and below accounted for 95%, and small-displacement motorcycles accounted for the absolute majority.

The two-wheeler market in developing countries has a high shipment volume and a good user base. In the global two-wheeler market shipment share, Asia Pacific (China, Japan), South Asia (India, Pakistan, Bangladesh, Nepal), ASEAN, South America ranked the top four. According to Frost and Sullivan, in 2021, the shipments of two-wheelers in Asia-Pacific, South Asia, ASEAN and South America accounted for 33.33%, 32.18%, 21.39% and 6.55%, respectively, and the two-wheelers in developing countries have a considerable market. Drawing on the domestic development experience, the growth of income has helped the export demand of motorcycles to increase and the profitability to rise. In developing countries such as South America and Africa, the economic development is relatively backward and the infrastructure construction is poor, and motorcycles have certain advantages because of their flexibility and convenience and low cost. Drawing on domestic development experience, we believe that per capita income growth in developing countries will boost motorcycle demand. In the context of the current export of small displacement, consumption upgrading is expected to drive the profit of the fuel motorcycle industry, and exports are expected to continue to help the development of the industry.

4. Electric two-wheeler industry outlook: The electric two-wheeler industry will increase steadily in 2022-2025

4.1. Market size: Sales volume is expected to maintain a compound growth of 8.37% from 2022 to 2025

Taking into account the domestic shared electric bicycle delivery, takeout, express delivery and other new consumption scenario vehicles, as well as the demand for natural car replacement, the demand for car replacement under the new national standard policy, exports and other factors, in the case of gradually fading the impact of the epidemic and falling raw material prices, we are expected to maintain 8.37% compound growth of electric two-wheeled vehicle sales in 2022-2025. Sales of electric two-wheelers reached 5325, 5763, 62.7 and 67.78 million units respectively. From the perspective of sales structure, according to the data of China Automobile Association and Frost & Sullivan, the total shipments of domestic electric motorcycles and electric light motorcycles in 2021 accounted for 6.38%. We assume that the total shipment volume of electric motorcycles and electric light motorcycles will gradually increase to 9% in 2022-2025. Based on this, we estimate that the sales of electric bicycles in 2022-2025 will reach 4952, 5325, 57.56 and 61.82 million, respectively, and the total sales of electric motorcycles and electric mopeds will reach 373, 438, 514 and 5.96 million. Among them, the sales of electric motorcycles were 205, 241, 2.83 and 3.28 million, and the sales of electric mopeds were 168, 197, 231 and 2.68 million, respectively. After considering the price of various bicycles, we estimate that the 2022-2025 electric two-wheeler market size will reach 123.7, 1418, 1636 and 184.6 billion yuan respectively.

4.2. New consumption scenarios help the industry development

Demand for immediate delivery drives industry growth. China's food delivery market has maintained rapid development, and the monthly active users of Meituan food reached 56.98 million in December 2020. According to the 2021 Corporate Social Responsibility report of Meituan, 5.27 million takeout riders received income in Meituan that year, and electric two-wheelers, as a highly dependent means of transportation in the takeout industry, expanded industry demand with the increase in the number of takeout riders. At the same time, the rapid development of express business also puts forward higher requirements for distribution capacity, and electric two-wheelers have the advantages of mobility and flexibility, high cost performance and other advantages, becoming the first choice for instant distribution vehicles, instant distribution scenarios with high vehicle intensity, short depreciation period, and increasing industry demand. The demand for shared motorcycles has steadily increased. From the demand side, compared with shared bicycles, electric bicycles can better meet people's short and medium distance travel needs. From the supply side, sharing electric bicycles due to stronger profitability, major companies increase the market release of shared electric bicycles. According to IIMedia Consulting, in 2021, the number of domestic shared electric bicycles will reach 3.82 million, considering the increase of major companies, we expect that the scale of domestic shared electric bicycles will increase from 4.95 million units to 7.92 million units in 2021-2025, with a CAGR of 20%.