Jay Chou “rided” Emma for 15 years and the “power” ran out…–Quick Technology–Technology changes the future

After being tied to Jay Chou for 15 years, Emma has become a well-known electric vehicle brand. During Jay Chou’s Tianjin concert, Emma electric car spared no effort in advertising at the venue to gain popularity.

However, as the market enters a saturation period and industry competition becomes increasingly fierce, the traffic of superstars seems to be unable to remedy the decline in Emma’s performance.

Emma Technology (28.670, 0.02, 0.07%) recently released financial report data showing that its revenue in the second quarter of this year experienced its first year-on-year decline since its listing. Since the beginning of this year, Emma Technology’s stock price has also been ups and downs. From its high point in April this year, its market value has evaporated by nearly 40 billion yuan.

Performance declined for the first time, and market value evaporated by 40 billion

According to the latest financial report, Emma Technology achieved revenue of 10.217 billion yuan in the first half of this year, a year-on-year increase of 8.25%; the net profit attributable to shareholders of listed companies was 895 million yuan, a year-on-year increase of 29.69%.

Although Emma Technology achieved both revenue and net profit growth in the first half of the year, the revenue growth rate was the lowest in the past four years. From 2020 to 2022, the company’s half-year revenue growth rates are 31.92%, 24.42%, and 29.08% respectively, all above double digits.

If you look at single-quarter data, in the second quarter of this year, Emma Technology achieved revenue of 4.775 billion yuan, a year-on-year decrease of 1.57%. This is the first year-on-year decline in revenue in a single quarter since Emma Technology went public in 2021; it achieved net profit It was 417 million, a year-on-year increase of 11.97%, and a far cry from the same period last year.

Behind Emma Technology’s performance decline, first, the industry’s dividend period has faded.

In May 2018, the mandatory national standard “Electric Bicycle Safety Technical Specifications” was released and stipulated that it would be officially implemented on April 15, 2019. The new standard added new regulations on vehicle structure, configuration, parts, etc., and required Scrap non-compliant two-wheeled electric vehicles. The introduction and implementation of new standards has ushered in a new wave of replacement purchases in the two-wheeled electric vehicle industry.

Data from iResearch shows that before the new regulations were introduced, the two-wheeled electric vehicle industry experienced a four-year downturn, with annual sales remaining at around 35 million units for many years; after 2019, the sales of two-wheeled electric vehicles fell It began to continue to pick up and achieved substantial growth in 2020, with sales reaching 47.6 million vehicles, setting a record high in many years.

However, my country’s sales of two-wheeled electric vehicles in 2021 will be 43.5 million, a year-on-year decrease of 8.6%; although year-on-year growth will be achieved in 2022, the growth rate has dropped significantly compared with 2020. Obviously, the period of rapid development of the industry brought about by the new national standards is ending, and two-wheeled electric vehicles have begun to become saturated.

Second, competition in the industry is becoming increasingly fierce.

In the two-wheel electric vehicle industry, there are traditional brands such as Yadi, Emma, ​​Tailing, and Xinri competing with each other; there are also new power brands such as Mavericks and Nine, focusing on intelligence and high-end; in recent years, There are even Internet and automobile companies such as Haro and Wuling that have crossed over into the two-wheeled electric vehicle industry, which has further intensified competition in the industry.

The Kaiyuan Securities research report pointed out that in the unfavorable environment where the overall development trend of the industry is weak and the price war is more intense than the same period last year, the overall ex-factory price and single unit profit of Emma Technology’s two-wheeled electric vehicles will decline in the second quarter of 2023. According to calculations by Kaiyuan Securities, under the influence of multiple factors, the overall ex-factory price of Emma Technology’s two-wheeled electric vehicles in the second quarter was 1,872 yuan, a year-on-year decrease of 1.57% and a month-on-month decrease of 3.66%; the company’s net profit for a single two-wheeled electric vehicle in the second quarter was 164 yuan/unit, a year-on-year increase of 11.98% and a month-on-month decrease of 4.15%.

Amid the slowdown in performance growth, Emma Technology’s stock price has also been on a roller coaster.

In April this year, Emma Technology’s share price reached a high of 75 yuan; but as of the close of trading on September 18, Emma Technology’s stock price closed at 28.65 yuan, a drop of 61.8% in five months, and the market value has evaporated by nearly 40 billion. Yuan.

Just marketing, no technology?

Emma Technology stated in its financial report that the company takes “technology and fashion” as its brand proposition. However, Emma obviously pays more attention to fashion than technology.

On the one hand, it is fashionable design. Emma Technology’s products pursue differentiation in terms of body shape, color matching, paint texture, etc.; in addition, Emma Technology also attracts young people by inviting brand spokespersons, sponsoring variety shows, etc.

In terms of spokespersons, Jay Chou took over Emma’s advertising endorsement in 2009, making Emma’s advertising popular in the streets. More than ten years later, Emma is still bound to Jay Chou. Recently, during Jay Chou’s Carnival World Tour concert in Tianjin, the Emma electric car also gained popularity and became the work vehicle for the concert, and banners were put up inside and outside the concert venue for advertising.

Jay Chou

Emma Technology also released a new brand positioning “Fashion Emma·Free Travel”, saying that it will deeply bind the brand with fashion and firmly implant the concept of “Emma = Fashion” into the hearts of users; at the same time, with “Chengfeng 2023” “Beyond the Wind 3” cooperation, hoping to gain more user attention with fashionable gameplay.

Emma Technology’s financial report shows that its sales expenses in the first half of the year were 296 million yuan, compared with 274 million yuan in the same period last year, a year-on-year increase of 8.15%. The main reason for the change in sales expenses is that the company increased investment in marketing and publicity.

In contrast, although Emma Technology is also paying more and more attention to technology, it is still far from enough.

The prospectus disclosed by Emma Technology during its previous sprint for listing shows that most of its core components such as batteries, motors, electronic controls, etc. are purchased from external sources. For example, batteries are mostly purchased from Tianneng Shares (34.390, -0.23, -0.66%), and motors They are purchased from Jinyu Mechanical and Electrical, Bosch and Hengdilong Mechanical and Electrical.

After going public, Emma Technology also had to increase investment in research and development under the attention of the outside world. Its financial report for the first half of the year shows that in terms of industry core technology research, the company continues to promote the research and development of motors, controllers, new battery material applications and other technologies.

Judging from the current R&D expenses, Emma Technology’s investment is not too much compared to its peers.

Its R&D expenses in 2022 will be 507 million yuan, while the R&D expenses of Yadi and Nine in 2022 will be 1.106 billion yuan and 583 million yuan respectively. The R&D expenses of both companies are higher than Emma Technology; from the first half of this year Judging from the above, Emma Technology’s research and development expenses were 245 million yuan, while Yadi’s in the first half of the year was 555 million yuan.

Judging from the patent situation, according to Emma Technology’s disclosure, as of June 30, 2023, it has more than 1,800 patents; however, previous media statistics show that a considerable part of Emma Technology’s patents are related to vehicle appearance design. The gold content needs to be improved.

To get out of the current predicament of slowing performance growth, in addition to fashion, Emma Technology undoubtedly needs to improve its core competitiveness in more dimensions.

Jay Chou