The electric vehicle industry has registered significant growth over the past year, making it one of the most profitable industries amid the COVID-19 pandemic. With lower maintenance costs and higher efficiency, as well as supportive government policies, the momentum of the EV industry is likely to continue in the long run. Global EV sales are expected to rise by 70% in 2021, according to an IHS Markit report.
Also, China’s EV market, which is the largest in the world, is expected to rebound quickly in tandem with the country’s economic growth.
With rising per capita income increasing the demand for EVs, Wall Street analysts expect Li Auto, Inc. (LI) and Niu Technologies (NIU) deliver solid returns in the future.
Click here to checkout our Electric Vehicle Industry Report for 2021
Li Auto, Inc. (LI)
Headquartered in Beijing, China, LI is engaged in the designing, development, manufacturing and sales of smart electric sport utility vehicles (SUVs). The company offers Li ONE, which is a six-seat electric SUV equipped with a range of extension systems and smart vehicle solutions. LI also sells peripheral products and provides related services, such as charging stalls, vehicle internet connection services and extended lifetime warranties.
LI delivered 2,300 Li ONEs in February, which represents a 755% year-over-year increase. Also in February, LI established a new research and development center in Shanghai dedicated to the development of cutting-edge EV technologies. And in January, the company’s Li ONE received a G rating, the highest safety rating per the safety evaluation results published by the China Insurance Automotive Safety Index Management Center.
LI’s total revenue for the fourth quarter, ended December 31, 2020 came in at $635,.54 million, which represents a 65.2% rise sequentially. The company’s non-GAAP net income increased 621.5% sequentially to $17.69 million and gross its profit increased 45.9% sequentially to $111.05 million. However, its non-GAAP loss from operations was $10.89 million for the fourth quarter and its non-GAAP EPS was t $0.02.
Analysts expect the company’s EPS to remain negative for fiscal 2021. However, a consensus revenue estimate of $688.79 million for the quarter ending June 30, 2021 represents a 128.8% rise year-over-year.
The stock has gained 60.5% over the past six months and closed yesterday’s trading session at $26.02.
Of seven Wall Street analysts that have rated the stock, six have rated it “Buy.” Moreover, the analysts expect the stock to hit $40.21 in the near term, which indicates a potential upside of 57.4%.
Niu Technologies (NIU)
Based in China, NIU is a provider of smart urban mobility solutions. The company is engaged in the design, manufacture and sales of smart e-scooters. Its products consist of three series — N, M and U — with multiple models and specifications for each series. NIU sells and services its products through city partners and franchised stores, third-party e-commerce platforms and the company's online store.
In January, NIU announced that Formula E World champion António Félix da Costa would be an official ambassador for the company. NIU also opened its first Scottish flagship store in Edinburgh, on December 4. The flagship store was launched in partnership with Flex Electric and Sinnis Motorcycles as a collaborative project.
NIU’s total revenue increased 25.3% year-over-year to $102.99 million for the fourth quarter ended December 31, 2020. The company’s revenue from e-scooter sales from the Chinese market increased 13.7% year-over-year. Its operating income has increased nearly 5% year-over-year to $9.55 million and its gross profit increased 20.6% year-over-year to $25.91 million. However, NIU’s net income per ADS decreased 7.6% year-over-year to $0.11.
A consensus EPS estimate of $0.85 for fiscal 2021 represents a 107.3% rise year-over-year. NIU has surpassed the consensus EPS estimates in two out of the trailing four quarters. A consensus revenue estimate of $81.41 million for the current quarter ending March 31, 2021 represents a 144.6% rise year-over-year.
NIU has gained 404.7% over the past year and closed yesterday’s trading session at $40.02.
All three Wall Street analysts have rated the stock a “Buy.” Moreover, the analysts expect the stock to hit $45.17 in the near term, which indicates a potential upside of 12.5%.
Click here to checkout our Electric Vehicle Industry Report for 2021
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LI shares rose $0.05 (+0.19%) in after-hours trading Friday. Year-to-date, LI has declined -10.89%, versus a 5.40% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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