Ninebot Q1 Revenue Grows Strongly Against Market Trends, Maintaining Buy Rating

Overview

Goldman Sachs released its Q1 2026 earnings review report for Ninebot. The report pointed out that despite a weak market environment and cyclical factors, Ninebot achieved steady revenue growth thanks to its strong product competitiveness—especially in the domestic electric two-wheeled vehicle business, which bucked industry trends and significantly outperformed the sector. Although first-quarter profits were pressured by large foreign exchange losses and rising costs, the firm believes these were largely short-term, cyclical factors. As the second quarter enters the sales peak season, currency volatility eases, and domestic product price hikes take effect, the company’s revenue is expected to accelerate, and profit margins will recover sequentially. Based on this, Goldman Sachs slightly lowered its EPS forecasts for the next three years to reflect short-term pressures, but maintained a “buy” rating and a target price of 62 RMB, arguing that the current stock price has fully priced in downside risks and offers an attractive risk-reward ratio.

Core views

Revenue performance was strong, and core competitiveness remains intact. In Q1, Ninebot’s domestic electric two-wheeled vehicle (E2W) revenue grew 20% year-on-year, sharply contrasting the industry’s 17% decline, demonstrating the company’s ability to gain market share amid a weak market. The growth was driven primarily by increased sales of electric motorcycles. Excluding B2B business, which saw revenue declines due to high base effects and delayed shipments, other major categories all posted robust growth. Profits temporarily weighed down by cyclical factors. First-quarter net profit fell below expectations, mainly due to: 1) Foreign exchange losses totaling 248 million RMB—the largest negative factor—stemming from sharp fluctuations in the euro-to-RMB exchange rate during the European subsidiary’s lawn mower robot inventory buildup; 2) Cost inflation caused gross margins to drop by 313 basis points year-on-year; 3) R&D spending rose 46.6% year-on-year, far exceeding revenue growth. Excluding the impact of foreign exchange losses, the company’s first-quarter profit was roughly flat compared to the same period last year, indicating that core profitability remains solid. Looking ahead to Q2, revenue acceleration and margin recovery are expected. Goldman Sachs forecasts that Q2 revenue will accelerate sequentially, driven by: 1) A concentrated launch of new domestic electric bicycle models and the arrival of the consumption peak season; 2) High oil prices in Europe boosting the trend toward electric mobility, leading to a surge in scooter demand and pushing the company’s European market share close to 50%; 3) Lawn mowing robots entering the European summer sales peak season, with retail activation data doubling year-on-year; 4) B2B orders delayed from Q1 will be recognized in Q2. In terms of margins, as currency volatility eases, management optimizes hedging strategies, and domestic product price hikes starting in April cover rising costs of aluminum and copper, gross and net margins are expected to improve sequentially. Valuation and forecast adjustments. Given the above cyclical impacts, Goldman Sachs lowered its EPS forecasts for 2026-2028 by 1%-13%, with a larger reduction in 2026, while raising revenue assumptions to reflect stronger-than-expected segment performance. The target price remains at 62 yuan, based on a 16x exit P/E multiple applied to the 2028 projected earnings per share, discounted back to 2027 at a 9.5% equity cost.

Analysis framework

This report adopts a typical ‘performance breakdown–attribution analysis–forward guidance’ framework. First, by comparing the company’s revenue growth rate with the industry’s overall growth rate (20% vs -17%), it quantifies and validates the company’s alpha attribute (ability to generate excess returns). Second, it conducts a detailed attribution analysis of profit fluctuations, distinguishing structural factors (such as high R&D investment) from cyclical/one-time factors (such as foreign exchange losses and short-term raw material volatility), thereby assessing the sustainability of profit pressure. Finally, combining seasonal patterns (European summer peak season), macroeconomic variables (oil prices, exchange rates), and company-level actions (price hikes, new product launches), it derives marginal changes for Q2, serving as the basis for maintaining the rating and adjusting the target price.

Methodology notes

• Valuation MethodDCF Cash Flow Discounting

  Exit P/E Multiple Discounting

  The report uses a variant of DCF thinking: first estimating earnings for the terminal year (2028), applying an exit P/E multiple to obtain the terminal value, then discounting it back to the present using the equity cost. This method is often used for high-growth companies to avoid interference from short-term fluctuations in valuation.

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Volume-Price Decomposition and Cost Pass-Through

  When analyzing profit margins, the report discusses prices (raising prices to offset rising raw materials) and costs (constraints on aluminum, copper, and plastics) separately, evaluating the company’s ability to pass cost pressures downstream through price hikes.

• Macroeconomic framework

  Currency Exposure and Hedging Analysis

  The report pays special attention to the impact of euro-to-RMB exchange rate fluctuations on the company’s overseas operations (particularly during the European subsidiary’s inventory buildup period) and assesses the effectiveness of management’s hedging strategies—a key macro variable in analyzing multinational manufacturing firms.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Ninebot (689009.SS)

  Direct beneficiary, main subject covered in the report

  Strengths

  Continuously growing domestic E2W market share, nearly 50% market share in European scooters, lawn mowing robots in a high-growth track, strong R&D capabilities

  Weaknesses

  High short-term exposure to currency fluctuations, raw material cost pressures, volatility in B2B business

  Comparison

  Compared to peers, it has stronger product iteration capabilities and global channel deployment, especially with differentiated advantages in high-end electric two-wheelers and robotics

  Risks

  Currency fluctuations, rising raw material costs, international trade tariff risks

Key data

• Q1 Domestic E2W Revenue Growth+20%Significantly outperforms the industry’s overall -17%
• Q1 Foreign Exchange Losses-248 million yuanLargest drag on profits; excluding this, profit was roughly flat
• Q1 Gross Margin Change-313 bpsMainly affected by cost inflation
• Q1 R&D Spending Growth+46.6%Far exceeds revenue growth of 14.8%
• European Scooter Market Share~50%Further improved from 30%-40%
• EPS Adjustment Range for 2026-2028-1% to -13%Mainly reflects cyclical impacts in 2026
• Target Price62 yuanRemains unchanged, implying 41.7% upside potential

Impact & implications

For investors, the report’s core message is that ‘short-term noise does not change the long-term logic.’ The first-quarter profit decline was mainly due to unsustainable foreign exchange losses and seasonal cost pressures, rather than a loss of competitiveness. On the contrary, the revenue’s counter-trend growth confirms the company’s moats in product strength and brand power. Positive changes in Q2 (price hikes, peak season, improved exchange rates) could become catalysts for the stock price. For investors focused on overseas expansion and smart short-distance transportation, Ninebot demonstrates resilience in a complex macro environment (currency fluctuations, trade barrier risks).

Risks

• Macroeconomic slowdown leading to lower disposable incomes and consumer confidence
• New product launches or new category expansions slower than expected
• Intensified competition in domestic and international markets
• Potential tariffs or anti-dumping taxes reducing profitability
• Raw material costs higher than expected

What to watch

• Sales performance of new domestic electric two-wheeled vehicles launched in Q2
• Peak-season sales data for European electric scooters and lawn mowing robots
• Currency fluctuation trends and the effectiveness of the company’s hedging strategies
• Market acceptance and impact on sales after domestic product price hikes