Tuesday, September 3, 2013

Vmoto Limited launches five new models of electric two wheel vehicles in China

Vmoto Limited (ASX: VMT) continues to build momentum and customer interest in the rapidly expanding electric two wheel vehicle Chinese market, with the company launching five new models into the domestic market.
Vmoto now has eleven models in the Chinese market, with margins expected to be up to 16%.
New models specific for China
The new models build on the interest generated from the first six models and have been developed specifically to target the Chinese market, with the design being modern and fashionable, and at a reasonable price.
The additional models provide Vmoto with a wide range of products to meet demand, with the company continuing to develop new versions and new models.
Charles Chen, managing director, commented: “The addition of five new models of electric two wheel vehicles to the Company’s existing range provides a wider range of products for distributors and customers and was driven by the significant interest generated upon first launch of our Chinese models in June 2013.
"A wider range of products mean more sales avenues across the country and I wish to thank again the R&D department who have contributed in developing the new models of electric scooter in the past few months.
"The company is looking forward to seeing these models on the road and continuing to expand its product range to meet Chinese demand.”
Analysis
The new models will assist Vmoto in continuing to grow market share in the Chinese market, with additional sales supporting revenue growth and potential profits.
Vmoto has proven that the China market can be tapped which helped deliver the company's maiden profit in June which was followed by another profitable month in July. In total Vmoto has exposure in 27 countries.
With three shop fronts already and more in the pipeline, Vmoto's in-country exposure, demand and potential profitability from the region is set to ride higher.
Proactive Investors maintains its target share price (set in February 2013) of $0.035 for Vmoto based on a 2013/14 target Price to Earnings multiple of 12.0 times, which reduces to 10.0x in 2014/15.