Source: Securities Star

While many manufacturing companies are still involuted in the price war, the 2024 annual report of Nine Company (689009) shows the success of "high-quality growth": revenue of 14.196 billion (+38.6%), net profit of 1.084 billion (+81.9%), non-net profit increased by 157.24% year-on-year, and gross profit margin increased by about 3.1 percentage points year-on-year.

Judging from the 2024 annual report, electric two-wheelers have supported half of the sky of Nine Company, and still maintain a strong development trend in the face of the decline in the overall sales of the industry: the sales of smart electric vehicles are close to 2.6 million units, and from 2022 to 2024, Nine Company has ranked first in the global sales of smart electric vehicles for three consecutive years. The company's other business segments also performed well, with electric scooters ranking first in global sales; All-terrain vehicles are also developing at a rapid pace.

What's even more rare is that in the context of rapid business growth and abundant cash flow, Nine Company did not blindly diversify, but focused on the two main business lines of "intelligent short transportation" and "service robots", and engaged in R&D and product iteration in a down-to-earth manner. In 2024, its R&D investment will increase by 34% year-on-year to 830 million yuan.

So, why did Nine make such a strategic choice? Next, we will conduct an in-depth dismantling from the product dimension of Nine to explore the internal code of Nine to achieve high-quality growth.

01. Create a new era of intelligent two-wheeled vehicles

When the two-wheeled electric vehicle industry is mired in the quagmire of "endurance war" and "price war", the two-wheeled electric vehicle business of No. 9 Company has a performance growth rate of 70.4%, proving that intelligence is the best solution to break the involution.

As of March 10, 2025, the cumulative shipments of its smart two-wheeled electric vehicles in the domestic market exceeded 6 million units, winning the "No. 1 sales volume of high-end electric vehicles in the country". In contrast, there is no shortage of traditional electric two-wheeler companies whose net profits have been cut in half. The rise of No.9 not only rewrote the industry pattern, but also verified that technological innovation based on the essential needs of users is the key to breaking the situation.

When traditional brands are fighting on the battlefield of "thousand-yuan machines", Nine found through research that the vast majority of users are dissatisfied with the anti-theft function of the vehicle, and consumers expect a more convenient control experience. These unmet "real needs" have become the fulcrum of the No. 9 market.

It is the first to introduce automotive-grade technology to two-wheelers: equipped with TCS traction control system, the rate of slippery road skidding accidents has been greatly reduced; Equipped with a dual-channel ABS anti-lock braking system, the emergency braking distance is further shortened, and these technologies have become the standard configuration of its 4,000 yuan price model.

What's more subversive is that the Nine has redefined the intelligent standard - the user does not need a key, the mobile phone can be automatically unlocked when it is near, and the APP monitors the location of the vehicle in real time after parking, and the anti-theft recovery rate is further improved. This strategy of "turning the means of transportation into trendy products of science and technology" has made Nine lead a group of friends in the high-end and ultra-high-end model market with a price of more than 4,000 yuan and even more than 7,000 yuan. Thanks to this, the gross profit margin of the No. 9 electric vehicle exceeds the industry average.

Supporting this achievement is Nine's continuous investment in technology research and development. From 2021 to 2024, the cumulative monthly R&D investment of Nine Company in four years will be 2.53 billion yuan. In terms of technology accumulation, the company has applied for a total of 7,452 global intellectual property rights, and obtained 3,593 patents at home and abroad, including a number of technical patents such as electric two-wheeled vehicle true intelligent system, three-electric system technology, and autonomous navigation technology.

This technical barrier directly translates into product competitiveness: the Q90 series launched for female users has achieved breakthroughs in market segments through functions such as one-key reversing and cruise control, with young online users accounting for 65%.

02. In 2025, it may continue to exceed expectations

After an in-depth examination of the electric two-wheeler industry and the market performance of Nine, it is foreseeable that this segment may continue to maintain growth in 2025. This judgment is not only based on the significant improvement of the industry environment, but also relies on the strong driving force brought by Nine's own strategic promotion and technological breakthroughs.

From the perspective of the overall industry, the electric two-wheeler industry will usher in key improvements at both ends of supply and demand in 2025. On the supply side, the revised version of the new national standard for electric bicycles released at the beginning of this year has significantly raised the technical and production access threshold. The new standard not only strengthens the fire and flame retardant requirements of non-metallic materials, increases the technical indicators such as low-speed running torque of the motor, but also clearly requires enterprises to have quality assurance capabilities and product consistency, which is essentially forcing the industry to reshuffle through technological upgrading.

According to the analysis of industry insiders, after the implementation of the new national standard, it is expected that a large number of small manufacturers with backward technology and non-standard production will be eliminated, and the industry concentration will be further improved. As a technology-driven enterprise, Nine's R&D capabilities, production standards and quality control systems are all at the leading level in the industry, and the new national standard has become an opportunity for it to expand its market share.

Demand-side policies are also favorable. In 2025, the trade-in policy will be extended in many places, and the government has not only optimized the subsidy application process, but also increased the subsidy. Taking Tianjin as an example, a subsidy of up to 600 yuan can be obtained for the purchase of the old and the new, which directly reduces the cost of replacement for consumers. Coupled with the improvement of consumers' requirements for vehicle safety performance after the implementation of the new national standard, Nine Company is expected to fully benefit from the policy dividend by virtue of its products that meet the new national standard and have innovative advantages.

Company-level data is a better indicator of its growth momentum. In 2024, the overall sales volume of the electric two-wheeler industry fell by 10.55% year-on-year to 49.2 million units, but Nine bucked the trend and expanded, with the number of stores surging from 4,500 in 2023 to 7,600, and the expansion of coverage provided a physical fulcrum for its market penetration. In terms of revenue, the company's electric two-wheeler business will record a year-on-year growth rate of 70.39% in 2024, with a revenue scale of 7.211 billion yuan, which far exceeds the industry average and reflects the market recognition of Nine's product strength.

Technology iteration is the core engine of Nine's continuous breakthroughs. The release of Intelligent System 3.0 in January this year marks a new stage in its intelligent strategy. The system is equipped with the Ninebot OS operating system, which integrates AI visual assistance and electronic body stabilization functions, which not only realizes the qualitative change of the riding experience, but also builds a technical moat. From the intelligent function innovation in the 1.0 era, to the breakthrough of the self-developed drive system in the 2.0 era, and then to the operating system-level integration in the 3.0 era, Nine Company has shown a clear path of technological evolution, and this continuous innovation ability will become a key bargaining chip for it to participate in global competition.

In the diversified business layout other than two-wheelers, Nine Company also showed forward-looking. In the field of lawn mower robots, the third-generation Navimow X3 series was unveiled at CES at the beginning of the year, and its obstacle avoidance accuracy and operation efficiency have been greatly improved compared with the previous two generations. The all-terrain vehicle business has benefited from the expansion of global scenarios, and with the recovery of overseas demand, this category is expected to become a new growth pole. This pattern of multi-business synergy not only diversifies the risk of a single category, but also provides multiple drivers for long-term growth.

On the whole, in 2025, the development environment of No. 9 Company has the right time, place, and people. The structural opportunities brought about by the upgrading of industry standards, superimposed on the company's own technical reserves and channel advantages, injected strong impetus into its performance growth.