Consumer Staples

Vmoto soars after reporting increased profits

Tue 11 Jan 22, 2:02pm (AEST)
man riding on electric vmoto scooter
Source: Image credit: Vmoto

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Key Points

  • Vmoto's 2021 profit is double the previous year's
  • Vmoto sold 30,000 units last year
  • Recent director transactions suggest confidence in the company's success

Electric scooter and motorcycle manufacturer Vmoto (ASX: VMT) was up around 10% at lunch time after revealing the company’s profit guidance for FY21.   

Vmoto is expected to announce a net profit (NPAT) after tax of between $7.5m to $7.8m, a significant increase on FY20 NPAT of $3.7m.

“I am delighted to announce we will deliver a significant increase in NPAT for this financial year when compared to 2020,” says managing director Charles Chen. 

“We remain confident the underlying fundamentals of the business will continue to deliver strong growth throughout key international markets.”

What created the growth?

Vmoto sold 30,000 units last year, up from the 23,547 units sold in 2020.

It’s interesting to note that this is only a 27.4% increase, yet the company’s profits have more than doubled. This suggests there could be greater disclosure around operational efficiencies, along with diversified product offerings, revealed along with the FY21 result.

The company has also grown its business to consumer distribution, now operating with 58 vendors across 62 countries. 

Growing demand for last mile delivery and ride share services have also helped the company on the business to business front.

In today’s announcement, Vmoto also said the launch of a premium brand on 29 November helped with the company’s growth.

Will today’s news lead to fresh all-time highs?

Today’s share price spike followed a similar pattern to the last time Vmoto released its earnings. 

At the start of September last year, the company soared almost 40% in under a week after announcing a positive half yearly report. This saw Vmoto reach an all-time high of $0.455 on 7 September. 

By comparison, the stock is currently trading at $0.465. 

vmoto share price over the last 6 months

^ Vmoto's share price over the last 6 months, with trading volume shown below. Note the September spike.

Could today’s news launch a rally that crosses this previous high? 

Management appears confident in the company’s prospects.

On 20 December, managing director Charles Chen bought 600,000 shares for a total value of $220,000. This transaction restored confidence in the stock, after the premium positioning announcement saw the company briefly plunge. 

The company’s lack of debt (with zero bank debt as of 31 December) also bodes well for Vmoto going forward

Written By

Jed Herne

Content & Strategy

After graduating with a 99.4 ATAR, Jed won 3 scholarships to Curtin University, where he earned his Bachelor's degree and served as a Student Ambassador. He is primarily interested in long-term passive index funds as a vehicle for financial independence. Outside of covering financial news, Jed is a published author, podcaster, and has an unhealthy obsession with bouldering.

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