31-Aug-2021:  Euroz Hartleys coverage of Vmoto Results (see attached file) - Buy/$0.74 PT

Analyst: Harry Stevenson

Half Year Results, Key Points:

VMT has released it’s half year accounts showing continued strong growth ahead of our forecasts.

• Revenue of $39.3m (EHL $34.9m) generated on total unit sales of the 13,723 (~$2.86k per unit vs EHL $2.5k).
• Revenue up 50% YOY (1H’20 $26.2m)
• EBITDA of $5.4m up 100% (up $2.7m in PY).
• NPAT of $4.0m (EHL $3.1m) up 119% on 1H’20.
• Vmoto Soco Manufacturing; the groups JV with Super Soco Intelligent Technology generated profit for the period of $1.2m – VMT’s 50% share $.61m
• Cashflow from operating activities of $1.7m with a cash position of $16.7m as at 30 June up from $15m as at 31 December.
• NTA of $39m
• On annualised half year results VMT trades circa ~11x P/E; with second half likely stronger again.

Investment Thesis

VMT has delivered a strong 1H’21 result ahead of our forecasts. Margins across the board were stronger than anticipated with increasing returns to scale. VMT management have highlighted that they remain confident that they will be able to deliver strong sales and revenue growth for the remainder of FY’21. We maintain our Buy Recommendation and $0.74/sh Price Target.

Vmoto Ltd (VMT)

• Share Price: $0.33 (31-Aug-2021)
• Price Target: $0.74
• Valuation: $0.74
• Shares on issue: 278.3 m(dil)
• Market Capitalisation: $91.8m
• Enterprise Value: $75.6m
• Debt: $0.45m
• Cash: $16.7m

Disclosure: I do not hold Vmoto shares.

03-Mar-2021:  Euroz Hartleys: Vmoto (VMT (Buy): Strong Full Year Results

Analyst: Harry Stevenson - Industrials Analyst, +61 8 9488 1429

Recommendation:  Buy, Price Target: $0.78/sh (up from $0.72/sh)

Strong Full Year Results

Investment case

VMT has released unaudited preliminary final results for the full year ended 31 December 2020. Results for the year were strong across the board with the company exceeding our previous forecasts (adjusted for impact of share based payments approved late in the year). With the award of the of VMT’s largest B2B order from strategic partner Greenmo Group in early FY’21 we look for a step change in unit sales through FY’21 with the company set to benefit from easing of lockdowns across Europe and continued transition to E-vehicles. The company launched a range of three new vehicles in late February which we expect will be well received given the welcome bump to performance. We have pushed through some adjustments to our full year FY’21 forecasts to reflect FY’20 results and as a result price target rises to $0.78/sh.

Key points

• Total revenue of $61m (vs Euroz $61.3m) up 34% YoY.
• Revenue per unit of $2,591 vs $2,287 in prior year; however this is muddied by inclusion of parts sales. We model FY’21 on a conservative $2,500 per unit.
• GP margins were stronger than anticipated at 23.5% (EHSL 21%); up from 21.1% in prior year.
• Growth in GP margins appears to be a reflection of the operating leverages within the new jointly owned manufacturing company “Vmoto Soco”. While we suspect Vmoto can do a little better we model FY’21 on 23% GP margins.
• EBITDA $5.8m up 101% YoY, adjusted for the impact of the share based payments $6.9m up 319% YoY.
• Strong operating cash flows of $4m; up 139% on PY.
• NPAT of $3.7m up 102% on PY.
• Total sales of 23,547 up 18% YOY, however down on EHSL forecasts of 24,528; given the lower than anticipated Q4 sales results.
• With the receipt of $13m B2B order received from Greenmo Group for 5,904 and record Q1 orderbook position VMT is on track to deliver 10,000 units in Q1’21; 45% of FY’20 total sales.
• Balance sheet position leaves VMT capitalised for future growth with $15m in cash and no debt.
• We have updated our forecasts to reflect FY’20 results as a result price target increases to $0.78/sh.

Vmoto Ltd, Year End: 31 December

• Share Price: 0.47 A$/sh (0.445 on 1-Apr-2021)
• Price Target: 0.78 A$/sh
• Valuation (DCF): 0.78 A$/sh
• WACC: 9.2%
• Terminal Growth: 2.5%
• Shares on issue: 276 m
• Market Capitalisation: 130.8 A$m
• Enterprise Value: 116.3 A$m
• Net Cash Cash (December): 14.5 A$m

Click on the link at the top for the full report, or open the attached file below.

06-Nov-2020:  Euroz Hartleys Securities: Vmoto Limited (VMT $0.41): Buy: Quarterly Update and Change in Chairman

Analyst:  Harry Stevenson, 6th November 2020, Price Target: $0.72/sh (up from $0.70/sh).

• Share Price: 0.41 A$/sh
• Price Target: 0.72 A$/sh
• Valuation (DCF) :0.72 A$/sh
• WACC: 9.2%
• Terminal Growth: 2.0%
• Shares on issue: 276 m
• Market Capitalisation: 113.0 A$m
• Enterprise Value: 97.7 A$m
• Net Cash Cash (30-Sep 20): 15.3 A$m

Quarterly Update and Change in Chairman

Investment case

VMT announced Phillip Campbell will step down as chairman and as a non-executive director. Phil was instrumental in development of the 2017 strategic plan that has seen a major turnaround in the company’s performance. While of course it is disappointing to see VMT lose an experienced chairman with a good track record at the company; in our opinion the change in directors signals that VMT is potentially looking to enter a new phase of growth and consequently we remain very buoyant around future prospects. In addition VMT have recently provided a Q3 update, achieving record sales for the quarter, we have updated our full year unit sales estimates and financial forecasts to reflect this. We have made some slight tweaks to our forecasts and as a result Price Target increases to 0.72/sh. We maintain our Buy Recommendation, with expectations for VMT to continue strong sales momentum through FY’21.

Key points

• VMT have reported record Q3 international sales of 6,134 and total unit sales of 7,009. Orderbook remains healthy with 6,152 units. Sales are recorded upon delivery to distributor, noting this sales for the upcoming quarter do not directly track orderbook.
• We have adjusted our full year forecast looking for full year unit sales of 24,528 (previously 23,965) and 31,886 units in FY’21. Revenue and GP is up on previous forecasts however we have made some slight tweaks below the line to reflect 1H results, consequently we continue to look for full year NPAT of $3.9m, forecast NPAT growth up 200% on PY.
• We look for a slight acceleration in sales through FY’21 with VMT benefiting from an increased marketing push on the back of recent raising.
• Long term outlook for two wheeled vehicles remains healthy with VMT well positioned in the market and continue to take market share from key competitors.
• VMT has pulled back from recent highs to $0.41/sh on the back of concerns around European lock downs and order book strength, in our opinion there is no change to long term investment thesis and we remain positive for the company’s growth prospects.
• We look for full year results to better highlight the full impact of Super Soco Joint manufacturing agreement, which we envision should see further improvement in margins.

--- click on the link at the top for the full Euroz Hartleys report on VMO ---

31-August-2020:  Euroz:  Quick Comment:  Vmoto Limited (VMT: $0.57), Buy, FY’20 Half Year Report

Analyst: Harry Stevenson, 31st August 2020, Price Target:  $0.70/sh, Recommendation: Buy 

FY’20 Half Year Report

Key Points

Vmoto has delivered strong 1H’20 growth and continued its strategy to focus on the higher margin international markets.

• Consolidated revenue from continuing operations up 55% to $26.2m from $16.9m PCP.
• NPAT after tax of $1.8m delivered for 1H’20 up 501% on PCP.
• EBITDA of $2.7m up 188% on PCP.
• VMT is well placed to deliver ESL full year estimate forecast of NPAT $3.9m on the back of these results.
• Total units delivered 10,510 for 1H20 up 41% on PCP.
• Group’s cash position at 30 June stood at $7.4m. In August group raised $9.6m following strong demand for an institutional placement.
• Group delivered 240 units of the CUX Special Edition Ducati – which already exceeds the full year contracted minimum by 20%; we continue to look to the possibility of an expansion to this existing agreement.
• GP margins remained at 21% for the half, a solid result in the midst of wider Covid-19 disruptions.
• VMT is in discussions with a number of potential ride sharing customers in Brazil, Bulgaria, Columbia, France, India, Mexico, Portugal, Slovakia, Spain, Switzerland and Turkey. VMT has also established new exclusive distribution agreements for the B2C range in a number of regions during the period.

Investment Thesis

VMT has delivered half year results which reflect a strong period of growth for the company. Our investment case continues to be built on growing unit sales with increased returns to scale. VMT’s balance sheet is well capitalised; which will support VMT’s ability to grow through coming periods, as demand for electric two wheel vehicles continues increase globally. We maintain our Buy Rating and Price Target at $0.70/sh.

Vmoto Limited (VMT)

• Share Price: 0.57 A$/sh
• Price Target: 0.70 A$/sh
• Valuation: 0.70 A$/sh
• Shares on issue: 276 m (dil)
• Market Capitalisation: 157.1 A$m
• Enterprise Value: 152.4 A$/m
• Debt: 2.6 A$/m
• Cash: 7.4 A$/m

--- click on link at the top for more ---

13-August-2020:  Euroz:  Vmoto Ltd (VMT):  Quick Comment: Strong Institutional Demand for $9.6m Placement

Analyst: Harry Stevenson, 13th August 2020, Buy, PT: $0.70/sh

Strong Institutional Demand for $9.6m Placement

Key Points

• Vmoto has secured commitments for a $9.6m placement following strong demand from institutional and sophisticated investors.
• 21,411,108 fully paid ordinary shares will be issued at $0.45 per share, representing a 7.4% discount to the 10 day VWAP.
• Proceeds from the placement will be used to:
  • Accelerate potential opportunities in the growing B2C and B2B electric two wheel markets in both new and existing geographies of operation.
  • Implement further international marketing initiatives.
• The placement was cornerstoned by Perennial Value Management.
• Following this placement VMT’s balance sheet is well capitalised with ~$15m cash (cash balance at 30 June ~ $7.3m) and well positioned to support future growth.

Investment Thesis

The VMT investment case is built on growing unit sales with increased returns to scale, which is supported by the latest Q2 update. This placement puts VMT in a strong position to capitalise on growth opportunities, while bringing institutional investors onto the register. In our opinion the strong take up of this offering by institutions should signal to the wider market that VMT has evolved in the minds of institutional investors.

30-July-2020:  Euroz: Vmoto Limited (VMT $0.44) Buy - Initiation of Coverage

03-August-2020:  Euroz: Quick Comment: Vmoto Limited (VMT $0.45) Buy (Market Update)

From the second (and latest) link:

Market Update

Key Points

Vmoto has provided a Q’2 market update

• Record sales delivered during the quarter with 6,389 unit sales (5,972 international sales) representing an increase of 55% QonQ and 105% PcP.
  • Unit sales for 1H’2020 10,510 – Euroz FY20 estimates ~24,000 units. 
• Firm international order book as at 30 June stood at 6,353 units.
• Strong operational cashflows ~$1.5m supporting a cash position of $7.3m after ~$6m capital contribution to Vmoto Soco Manufacturing (VMT’s new joint manufacturing company).
• Company continues to receive interest from new customers in both the B2B and B2C markets; with demand fuelled by Covid-19, government incentives and changing consumer preferences.
• Discussions continue with Ducati for expansion of existing relationship; we see this as the possibility for an expansion of the successful “Special Edition” range.
• 2000 units of VMT’s ride sharing product delivered to Go-Sharing Netherlands; with an additional 1,500 on order to be delivered from July to December 2020.

Investment Thesis

The VMT investment case is built on growing unit sales with increased returns to scale. VMT has had a strong start to the FY20 financial year and in our view will be able to maintain this growth into FY21. VMT is well positioned to benefit from government incentives, changing consumer preferences, maturing technology and a growing ride share market. The establishment of the Vmoto Soco manufacturing company continues to set the pathway for further collaboration between the two entities over time. The electric two wheel market is set for growth over the coming years, in our opinion, VMT is well placed to benefit.

Vmoto Limited (VMT)

• Share Price: 0.45 A$/sh
• Price Target: 0.70 A$/sh
• Valuation: 0.70 A$/sh
• Shares on issue: 251 m(dil)
• Market Capitalisation: 113.1 A$m
• Enterprise Value: 108.5 A$/m
• Debt: (December 19) 2 A$/m
• Cash: (December 19) 6.6 A$/m

--- click on link above for the full 30-Jul-2020 report and for the 03-Aug-2020 client note ---

[I am not a VMT shareholder]