In FY 24, Vmoto sold 17,038 units, a 32.5% dip from 25,241 units in FY 2023. This is the second year in a row when unit sales have declined. At slightly more than 1,400 units a month, Vmoto is losing its volume efficiency edge. At the same time, the ASX-listed company has a reasonably broad product portfolio, making any component-commonisation challenging. Vmoto has been addressing this somewhat by moving most new products to the latest 2.7 kWh swappable/portable battery platform.
In September 2024, we had written extensively on Vmoto, analysing why the company has major headwinds. The Chinese market has bigger rivals like Yadea, which are also fast improving their quality levels. Their size allows them to offer products cheaper.
Then, significant markets like India are out of bounds for Vmoto as local manufacturers dominate.
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Revenue decline in China
Compared to large players like Yadea, Vmoto has a relatively small presence in China. However, the Chinese presence is still the most significant part of the company. In FY24, Chinese revenues declined to AUD 46.07m, from AUD 56.27m, an 18% drop. This is in-line with the overall drop in the Chinese market. Even market leaders like Yadea lost about 25% in sales volumes.
Except, they are Yadea and they still sold about four million units. This is Vmoto and it has dropped to 17k units. Any further drop and the company's survival would be under question.
Restructuring and New Relationships
FY 2024 was all about significant restructuring for the company. It's Shanghai-based partner SuperSoco faced bankruptcy and Vmoto had to step in to save its IP. It reached a settlement to acquire the remaining 50% shares and made Nanjing Vmoto Soco Intelligent Technology Co, Ltd, a wholly owned subsidiary of Vmoto.
In doing that, the company has also eliminated all its sub-brands (Super Soco, E-Max) and now everything is sold under the Vmoto brand name. This has to be seen in light of the company's customer focus. The E-Max brand was created to target fleet owners while Vmoto would focus on retail sales. However, Vmoto has focused aggressively on fleet sales in the last few quarters. The company reckons this would be the core sales driver in the future. Hence, a single brand.
In addition, Vmoto acquired the remaining 50% interest in its distributor in Italy - Vmoto Soco Italy - from Giovanni Castiglioni (Castiglioni) and Graziano Milone, in a share-swap deal. Castiglioni assumed the role of a global advisor to Vmoto and would be focusing on the design direction of the company while Milone was appointed B2C Chief Operating Officer of the Group, overseeing the global B2C sales and operations.
Vmoto also invested in its UK-based importer, Zenion, which provides last mile delivery services using Vmoto hardware.
This early stage investing in fleet-operator startups has been a recurring theme for Vmoto in recent quarters. We covered this in detail in a previous analysis:
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Vmoto has also invested in Evotion Labs Pte Ltd, a Singapore-based operator deploying Vmoto scooters and batteries for fleet operations.
The company has also invested in jointly owned operations in Thailand, South Africa, and Mexico. The operation of Thailand is important as Vmoto has also set up an assembly plant in the country.
The pattern is similar in all these ventures - Vmoto enters at the early stage to form joint-venture operations with local partners in fleet operations. The company's investment is in the form of Vmoto scooters, battery packs, and charging infrastructure. This assures that the investee company stays within the Vmoto fold and Vmoto is assured growth when the investee operations grow.
Fleet sales would be Vmoto's growth driver in the near and mid-term future
Delisting and problems
In December 2024, Vmoto informed that it plans to delist from ASX.
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The company said that
"...the trading price of the Shares implies a valuation that is (and has been) consistently and materially below the Company's view of its fundamental value."
Since then, a minority shareholder, 'the Munro Family Super Fund' and three related parties had requested a section 249D1 meeting, scheduled for March 06, 2025, to consider resolutions to change the Board. The applicants had asked for the removal of Blair Edward Sergeant, Martin Zhou, Aaron Reade Kidd and Ivan Teo, from the board and the appointment of Phillip Ashley Campbell and Andrew LogieSmith, as directors of the company.
The applicants claimed misconduct on the part of the Board, the oppression of minority shareholders with regards to the delisting, and the transfer of 22.6% of the company’s shares to entities selected by the Board.
In short, if Vmoto delists at the present price, it's not great news for the minority shareholders. As per close of trading today, the company has a market cap of AUD 33m (USD 20.55m), not great for a brand that is perhaps the best known of everything that comes out of China.
This matter was referred to the Australian Government Takeover Panel. The panel has today declined to proceed on the matter and for now the Vmoto delisting should move as planned.
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