Today is a great day to take a position in the e-scooter market. The electric car market has already received a lot of attention, but electric scooter maker Niu Technologies (NASDAQ:NIU) is part of an industry that has yet to hit the mainstream. Niu Technologies stock, therefore, should still have plenty of room to run.
Niu is not only in the right market at the right time, but also in the right geographic location to sell e-scooters. Sales of electric two-wheelers (including electric scooters and motorcycles) in China are forecast to reach a whopping $12.5 billion by 2025. An increase in environmental awareness is, at least in part, helping to drive this trend.
The spread of the novel coronavirus did have a negative impact on Niu’s e-scooter sales. But the company’s recovery is well underway now. And, a new product launch will make e-scooters more affordable in China while also adding to Niu’s value proposition.
Niu Technologies Stock at a Glance
By all indications, Niu Technologies stock was scooting along nicely during the fourth quarter of 2019. By early 2020, there were seemingly no problems on the horizon. In fact, a price ramp-up from $5.50 last summer to the $10 area was in progress during this time frame.
Unfortunately, the onset of the coronavirus created a speed bump for NIU shares. By March 23, the stock was approaching the $6 area. However, buyers stepped in and showed that Niu Technologies stock wasn’t out of gas.
And in June they really stepped on the accelerator pedal, powering the shares all the way up to $18. Their next objectives will be to break through $20 and $22 on strong volume and, just as importantly, to hold those key levels.
Back on the Road Again
The e-scooter movement was underway at the start of 2020. Yet, a black-swan event like the spread of the coronavirus was bound to impact this burgeoning market. The fact is that lockdowns and shelter-in-place mandates made it challenging to sell vehicles of any type.
So, as we might expect, sales and revenues declined on a year-over-year basis during the first quarter. However, it appears that Niu is already engineering a turnaround.
CEO and COO Yan Li explained how the Chinese e-scooter market, and therefore Niu, are already on the road to recovery:
“The per store sales has improved by 12% year-over-year in the month of April. Now heading into June, the China retail market will most likely continue to improve as many cities like Beijing and Shanghai even suggested no mask necessary when on site. In addition, the need for personal commuting solution is very high. So we’re quite confident and positive about the near future growth in China.”
A New Niu
Indeed, April was a pivotal month for Niu as the company returned to day-to-day operations. Keep in mind that the recovery from the pandemic happened earlier in China than in the U.S.
As further evidence that Niu is moving forward despite the pandemic’s impact, the company released an announcement of a new product launch. Specifically, it’s an affordable e-scooter called the G0.
The G0 is part of the company’s Gova series. The Gova lineup “is targeted at the mid-end e-scooter market, representing good value for money and high quality.” A 400-watt motor and a lithium-ion battery will power the G0, and the scooter will be available in two models. Consumers will be able to choose between “sports” and “tour” offerings.
Offering an affordable e-scooter is a savvy move in an economically challenged world. Not everyone is willing or able to go all in on an electric scooter purchase. The advent of Niu’s G0 model could introduce e-scooter technology to a new generation of travelers.
My Final Word on NIU Stock
In time, more investors should catch on to the e-scooter movement. The NIU stock price suggests that traders are already positioning themselves for more upside. Clearly, the stock has momentum, and so does this fascinating electric scooter revolution.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.