Financials
Financials — What the Numbers Say
Yadea earns ¥37.0B in revenue and ¥2.9B in net income (FY2025) selling electric two-wheelers, batteries and chargers — about 18m units a year — at an average gross margin of ~17% across a decade. The story today is a wide gap between accounting quality and market price: the company holds ~¥17B of net cash (≈58% of market cap), throws off ¥5.2B of free cash flow (FY2025), earns 27.8% ROE, and trades at roughly 10× earnings. The FY2024 trough — revenue ‑19%, EPS ‑52% — was a real demand air-pocket as Chinese provinces re-wrote e-bike safety rules, not a structural break. FY2025 reaccelerated on national trade-in stimulus: revenue +31%, operating profit +118%, operating cash flow +1,904%. The single metric that decides the next year is gross margin — whether FY2025's 19.1% recovery holds, or whether it normalises back toward the 15–16% range that preceded it.
Revenue FY2025 (¥M)
Operating Margin FY2025
Free Cash Flow FY2025 (¥M)
Net Cash (¥M)
Return on Equity FY2025
P/E (trailing, FY2025 EPS)
Dividends Paid FY2025 (¥B)
Reader primer. Operating margin = operating profit / revenue (how much of every ¥ of sales becomes profit before financing and taxes). Free cash flow = cash from operations minus capital spending (cash the business produces after paying for its own growth). ROE = net income / shareholders' equity (return on the book equity that funds the company). Net cash = cash, term deposits and marketable securities minus interest-bearing debt — the "war chest" that sits on top of the operating business.
Revenue, Margins, and Earnings Power
Yadea's revenue has compounded at ~21% CAGR for nine years but the path is anything but smooth. Three regulatory inflections shaped it: the 2019 GB17761 new national standard (which obsoleted millions of legacy e-bikes and triggered the 2020–2021 scrappage cycle); the 2024 GB17761 revision (which paused dealer ordering and crushed FY2024); and the 2024–2025 national trade-in subsidy programme (which pulled demand back in FY2025). The earnings power therefore looks much steadier when you read it as a cycle: trough operating margin ~6%, mid-cycle 8–9%, peak ~10%.
The decade splits into three regimes. 2016–2019 was the dealer-network land-grab phase: revenue grew 20–26% a year but margins compressed because Yadea was buying volume from competitors. 2020–2023 was the GB17761 super-cycle: the national rule forced replacement of ~300m sub-standard scooters, revenue tripled, and net income compounded 5× as Yadea took share and lifted gross margin to 18.1% in 2022. 2024–2025 is the new cycle: the revised rule briefly broke demand, then the trade-in scheme catalysed an even larger replacement wave that is still running.
The FY2025 gross-margin print (19.1%) is the highest in the dataset and was driven by three combinable factors: (i) lithium-iron-phosphate battery cost deflation passed only partly to customers, (ii) more premium model mix as the trade-in scheme pulled customers up-tier, and (iii) better factory utilisation as volume rebounded to ~18m units. None of these are durable on their own. The realistic mid-cycle gross margin is 16–17%, and the FY2025 print should be read as the high end of a band, not a new floor.
The half-year view exposes the cyclical engine: H2 2024 was the demand vacuum (NI ¥238M, ‑77% YoY), H1 2025 was the trade-in bounce (NI ¥1,649M, +60% YoY), and H2 2025 stayed strong (NI ¥1,263M, +430% YoY off the low base) but was sequentially below H1 — a normal seasonal pattern as scooter sales weight toward spring.
Cash Flow and Earnings Quality
Yadea's recent cash flow tells a much louder story than its income statement. Cash from operations swung from ¥299M in FY2024 (0.23× net income — a red flag) to ¥5,990M in FY2025 (2.06× net income — exceptional). The swing is not accounting magic; it's the natural rhythm of a working-capital-heavy distribution business in a downturn-then-bounce.
Free cash flow definition. Free cash flow = operating cash flow minus capital expenditure. FY2024 OCF was crushed because dealers stopped re-ordering (trade and bills payable grew faster than receivables collected), AND capex was elevated (¥1,497M building new capacity). FCF was therefore negative ¥1.2B in FY2024 even though net income was ¥1.27B positive — a textbook example of why earnings can lie when working capital moves against you.
Two observations matter most. First, the 2,000% YoY jump in operating cash flow is not a normal earnings recovery — it is dealers refilling channel inventory after running it dry through FY2024. Some of FY2025's OCF therefore "belongs" to FY2024 (the working-capital release that should have happened then). A normalised FY2025 OCF would be lower — probably in the ¥3.5–4.0B range — but still very healthy. Second, capex halved in FY2025 (from ¥1.50B to ¥0.79B) as Yadea finished its overseas factory build-out. With factory capacity now in place, capex intensity should run at ~2% of revenue, freeing more cash for shareholders.
Balance Sheet and Financial Resilience
The balance sheet is the most important slide in the deck. Yadea operates with near-zero interest-bearing leverage but very high trade-payable leverage — a structural feature of consumer-goods OEMs with bargaining power over suppliers. The right way to read it is to separate financial debt from operating liabilities.
Yadea sits on ¥18.9B of cash and cash-equivalents versus ¥1.6B of financial debt — net cash of ¥17.3B. That is 47% of FY2025 revenue and 58% of the company's market capitalisation. Read literally: investors are paying ¥30B for an operating business that has ¥17B sitting inside it, so the operating enterprise is being valued at roughly ¥13B (¥12.3B EV) against ¥3.6B of operating profit — barely 3.4× operating profit.
The reported "debt-to-equity" of 1.87× looks ugly but is misleading: it includes ¥14.1B of trade and bills payable to suppliers — short-term, non-interest-bearing, and a sign of strength not weakness. The real signal is the equity ratio (equity / total assets) climbing from 22% in 2020 to 35% in 2025 — the company has been recapitalising itself by retaining earnings while suppliers continue to fund working capital. Interest expense was just ¥46M in FY2025 against ¥3.6B of operating profit — interest coverage is meaningless because there is barely any interest.
Balance-sheet conclusion. Yadea has a fortress balance sheet by any sensible test: net cash of ¥17B, equity rising 89% over five years from retained earnings alone, interest expense below 1.3% of operating profit. The only real liability is the working-capital exposure to dealers — and FY2024 already stress-tested that, with no covenant breach and no rescue financing needed.
Returns, Reinvestment, and Capital Allocation
Returns are the cleanest evidence that this is a quality franchise, not a commodity OEM. ROE has averaged 23% over six years and hit 27.8% in FY2025. The variability tracks the operating cycle, not the business model.
The capital allocation story is consistent and gets stronger with cash generation: Yadea pays a real, growing dividend and buys back small amounts opportunistically. There is no empire-building, no transformational M&A, and no dilution.
The FY2025 dividend (¥1,251M) is 45% greater than the FY2024 dividend, the buyback was smaller (¥49M vs ¥132M), and no acquisitions were made versus a ¥185M deal in FY2024. Share count is effectively flat at ~3,040M (the buybacks roughly offset RSU vesting). At the current price, the dividend yield is approximately 4.2% and the implied FCF yield (¥5.2B FCF / ¥29.6B market cap) is 17.6% — far above any plausible cost of equity for a Hong Kong consumer-goods name.
Capital-allocation read. Management is doing the right thing: paying out the cash the business throws off rather than reinvesting it at low marginal returns. With ROE of 28% but a market that won't re-rate the share price, the buyback could and should be larger — ¥49M of buybacks against a ¥30B market cap is a rounding error. This is the part of the capital-allocation policy that could improve.
Segment and Unit Economics
Yadea reports a single operating segment under IFRS 8 but discloses a useful product mix breakdown. The mix has been remarkably stable across the cycle, which tells you the demand swings hit every product line at once — i.e., it's a category phenomenon (regulation, trade-ins), not a product-line phenomenon.
Electric scooters are now 44% of revenue and growing the fastest in absolute terms. The batteries and chargers line is the under-appreciated profit pool — it has a higher attach rate than vehicles (every new vehicle needs a battery; replacement batteries every 2–3 years generate recurring revenue), and Yadea has been vertically integrating sodium-ion battery production. As geographic mix moves more international (factories now in Vietnam, Indonesia, and others), product mix should tilt toward higher-ASP electric scooters with better gross margin.
Valuation and Market Expectations
This is the most important section of the page. The current share price prices Yadea at a level normally reserved for stressed, no-growth manufacturers — yet the underlying business has grown revenue 21% per year for a decade, holds 58% of its market cap in cash, and just delivered 28% ROE.
The 10-year history shows three valuation regimes: pre-2019 (low-teens P/E for a 5% net margin commodity OEM), 2020–2021 (peak ~40× as the GB17761 super-cycle convinced markets Yadea was a growth compounder), and 2022 onwards (steady de-rating to ~10–15×). FY2025's print sits at the bottom of that range — only the 2016 IPO year was cheaper on P/E.
The right multiple for Yadea is EV/EBITDA, not P/E, because the cash hoard distorts every equity multiple. EV/EBITDA of ~2.8× is a low multiple for a global #1 by units. A re-rating to 6× — still below the China consumer-goods average — would imply an enterprise value of ¥26B, plus ¥17B of net cash, ≈ ¥43B equity, or roughly 45% above the current ¥30B market cap. Sell-side consensus (mean target HK$15.15) sits ~36% above HK$11.27 — the framing agrees.
The bear scenario still sits ~14% above HK$11.27 because the net cash floor is so high. The base scenario (HK$14.28) lines up with the sell-side mean (HK$15.15). The bull scenario requires the FY2025 gross-margin print to hold and a partial re-rating toward Chinese consumer-discretionary norms — neither extreme.
Peer Financial Comparison
The peer set is the single most damning piece of evidence that the market is mispricing Yadea. Across the three China-listed peers and the two international comps, Yadea ranks #1 on scale, #1 on returns, and yet trades at the lowest EV/EBITDA of any peer that earns positive EBITDA.
The peer gap that matters: Yadea trades at 2.8× EV/EBITDA against AIMA's 7.8× and Ninebot's 12.7×. The simplest defensible explanation is that AIMA's FY2024 net income (¥1.99B) was higher than Yadea's (¥1.27B) and the market over-extrapolated the cyclical inversion. That earnings gap reversed in H1 2025 (Yadea NI +60% YoY, AIMA NI +28% YoY) but the multiple has not. A peer-average EV/EBITDA of ~8× would imply an equity value of ¥52B against the current ¥30B — roughly 74% above today's mark. That is the size of the gap.
What to Watch in the Financials
The financials confirm four things: (i) Yadea is the highest-quality operator in Chinese e-mobility by margin, return, and balance sheet; (ii) the FY2024 trough was real but cyclical, not structural; (iii) the company throws off enormous free cash flow when working capital normalises; (iv) management returns cash through dividends but is too conservative on buybacks given the multiple.
They contradict the bearish read that Yadea is a low-quality commodity OEM losing share. Net income grew 129% in FY2025 and operating margin nearly doubled — that is not a melting ice cube.
The first financial metric to watch is gross margin in the H1 2026 interim. If it holds above 17%, the FY2025 re-rating case stays intact; if it falls back to 15–16%, the bear case (cyclical peak, structural margin pressure from raw-material reversion) gets the evidence. Everything else — cash, returns, dividends, peer multiples — already tilts long; gross margin direction is the swing variable for the next 12 months.