Executing a strategy to diversify their revenue stream and limit geopolitical risk, electronic vehicle manufacturer Vmoto (ASX: VMT) is comfortably on their way to achieving their risk goals with confirmation that less than 4% of their sales are now being generated in China.
For the quarter ended 31 March 2022, Vmoto sold 7,998 vehicles which are primarily scooters and motorcycles. The unit sales represented a 36% increase on the previous March quarter where B2B sales are contributing strongly to rising demand.
While the Chinese market, where Vmoto manufactures their EVs, played a major role in the establishment of Vmoto, the Company has been steadily increasing its sales initiatives in Europe over the past 12 months, including the appointment of Giovanni Castiglioni and Graziano Milone.
International sales accounted for 7,677 EVs sold in the March quarter but that number is set to increase further with Vmoto confirming they have an international order book of 9,116 to be delivered. Interestingly, repeat orders are becoming a notable segment within the Vmoto customer portfolio as mass adoption of EVs continue their global rollout both as cars and single-person vehicles.
The sharing economy is playing a large role in Vmoto’s international B2B sales with GO Sharing expected to continue its orders as they expand rapidly across Europe. Dropping hundreds of eScooters in major cities, GO Sharing EVs are becoming increasingly popular amongst Europeans that want the convenience of scooter travel without the burden of upfront expenses and parking. Most importantly – they can’t be thrown in the river (Melbourne, I’m looking at you…)
As Vmoto’s strategic B2B customer, GO Sharing is set to increase their order book in the future with plans to expand beyond their current markets in Netherlands, Belgium, Austria, Germany, Turkey and Italy which are all proving successful.
Through GO Sharing and their international salesforce, Vmoto has supplied samples and/or in discussions with prospective customers and distributors in Europe, Africa, the Middle East, East Asia and North America. In addition to these B2B initiatives, Vmoto has also opened Vmoto Soco flagship stores and corner shops in the Philippines and Romania that focus on B2C sales.
With rising sales and $6.1 million in cash on hand, Vmoto has reaffirmed its sustainable profit growth having reported net profit after tax of $3.74m in FY20 which increased to $8.08m in FY21. The Company has also confirmed that its manufacturing facility In Nanjing, China, remains fully operational and not impacted by COVID-19 lockdowns
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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