Diamond Equity Research Releases Research Report on EZGO Technologies Ltd. (NASDAQ:EZGO)

Rhea-AI Summary

EZGO Technologies Ltd. (NASDAQ:EZGO) is highlighted in a recent investment report by Diamond Equity Research, focusing on its promising position in the micro-mobility market. The report notes a projected 65% CAGR for China's e-bicycle market, driven by new regulations and rising demand due to COVID-19. EZGO's innovative AI and IoT integration in e-bicycles enhances user interaction and market reach. Its current valuation at 3.70x EV/revenue is notably lower than industry peers, presenting potential growth opportunities if the company successfully expands its market share.

Positive

• Projected 65% CAGR for China's e-bicycle market until 2022, indicating substantial growth potential.
• EZGO is well-positioned to leverage new regulations in the e-bicycle sector, enhancing market share opportunities.
• Innovative AI and IoT features in e-bicycles may boost customer engagement and product offerings.
• Valuation at 3.70x EV/revenue presents a lower entry point compared to peers, suggesting upside potential.

Negative

• Investment in EZGO is risky due to its small capitalization and exposure to the volatile Chinese market.
• The company's business is still in its early stages, posing challenges in achieving consistent revenue growth.

NEW YORK, April 22, 2021 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research and corporate access firm with a focus on small capitalization public companies has released an investment summary report of EZGO Technologies Ltd. (NASDAQ:EZGO). The report includes detailed information on EZGO Technologies' business model, services, industry, valuation, and risks.

The full research report is available here. Highlights from the report include:

Large Market Opportunity

EZGO is targeting the enormous micro-mobility market driven by the increasing public adoption of electric bicycles, as well as China’s implementation of new regulation on e-bikes which presents massive market opportunity. The global e-bicycle market has witnessed exponential growth driven by the increasing adoption of electric bicycles for commercial and personal use, as well as the expanding EV technology penetration over the last decade. The rapid development of emerging e-bike sharing, food delivery, and express delivery industries also expand the demand for e-bicycles and promote the growth of the micro-mobility market. In addition, the recent outbreak of COVID-19 further stimulated people’s demand for e-bicycles with sales exploding globally, as they bring more convenience and flexibility to transportation while enabling people to remain socially distanced. The Chinese e-bicycle market is projected to grow at a CAGR of 65% to 2022, with penetration increasing from 13% to 44%, as the April 2019's implementation of the New National Standards on electric bicycles is driving a historic replacement cycle of almost 90% of the existing electric bicycles to lighter, more portable lithium-bicycles within 1-3 years, with sales potential of approximately $70 billion. We see extraordinary business opportunities emerging in the e-bicycle industry and consider the new regulation a positive development for Chinese lithium-ion EV players like EZGO which has developed a strong understanding of the market and appears ready to leverage this opportunity to gain market share.

Proprietary AI Capacity and Integrated loT Technologies

EZGO operates as an innovative AI-enabled short-distance transportation solutions provider in China. The company designs, manufactures, and sells e-bicycles and e-tricycles, and engages in the sale of lithium batteries; and the sale, franchising, and operation of smart charging piles for e-bicycles and other electronic devices. Unlike most conventional e-bicycle manufacturers, EZGO is committed to creating an innovative platform integrating communication, entertainment, and power. The company’s e-bicycles are equipped with its proprietary smart screen and advanced AI system, enabling customers to communicate directly to achieve voice interaction; real-time navigation; driving records; movie entertainment and other functions. The company has also embed GPS and Beidou Navigation System in its “Dilang” e-bicycles to deliver IoT services for customers to learn about the vehicles’ situation through their mobile phones, which enables EZGO to reach end-users directly after the products are sold, and brings the company potential opportunity of developing e-commerce business as its customer base grows. EZGO is ideally positioned to capture market share with its innovative e-bicycle product and service ecosystem, its state-of-the-art AI technologies and well-regarded IoT platform.

Attractive Valuation

It is challenging to value EZGO given its current business is still in its early stage and the limited number of publicly traded electric vehicle companies. In our comparable company analysis, we screened for small capitalization companies within the electric vehicle industry. We used a blend of these companies to arrive at a median enterprise value to revenue multiple of 6.36x, compared to 3.70x of EZGO. From our analysis, the company could have its valuation shift higher more in line with larger public peers such as NIU Technologies (NIU) trading at premium valuations, contingent on successful execution by company and continuous expansion of market share.

Compared to a peer set of direct-to-consumer public electric vehicle companies, EZGO trades at an unassuming valuation, assuming management’s ability to execute. Investors need to understand the risks of investing in China and small capitalization equities, as such this is intended for high-risk tolerant investors.

About EZGO Technologies Ltd.

EZGO Technologies Ltd. designs, manufactures, and sells e-bicycles and e-tricycles in the People's Republic of China and internationally. The company also engages in the sale of lithium batteries; and the sale, franchising, and operation of smart charging piles for e-bicycles and other electronic devices. EZGO Technologies Ltd., formerly known as EZGO IOT Tech & Services Co., Ltd., was incorporated in 2019 and is headquartered in Changzhou, Jiangsu, China.

For more information, visit http://www.ezgotech.com.cn/Investor/.

About Diamond Equity Research

Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on premiere institutional investor platforms including Factset, Morningstar, and Thomson One. The firm is headquartered in midtown Manhattan.

For more information, visit www.diamondequityresearch.com.

Disclosures:

Full disclosures pertaining to this report can be found at the end of the report and on the Diamond Equity Research website disclosure section. EZGO Technologies Ltd. has paid for this report as company sponsored research, which is meant to subsidize the high cost of creating the report and monitoring the security, however the views in the report reflect that of Diamond Equity Research. Diamond Equity Research LLC is being compensated by EZGO Technologies Ltd. for producing research materials regarding EZGO Technologies Ltd. and its securities. All payments are received upfront and are billed for research engagement. As of 04/22/2021, the issuer had paid us $11,000 for our services, which commenced 03/24/2021 consisting of two research reports.  Additional fees may have accrued since then. Investors need to be aware of the high risk in small capitalization equities.

FAQ

What is the growth potential for EZGO in the e-bicycle market?

EZGO is targeting a 65% CAGR in China's e-bicycle market, driven by regulatory changes and rising public demand.

How does EZGO's valuation compare to its industry peers?

EZGO's valuation stands at 3.70x EV/revenue, significantly lower than the median of 6.36x among comparable companies.

What technologies does EZGO integrate into its e-bicycles?

EZGO incorporates advanced AI and IoT technologies, enabling features like real-time navigation and smart interactions in its e-bicycles.

What risks are associated with investing in EZGO Technologies?

Investing in EZGO carries risks due to its small market capitalization and operational dependence on the volatile Chinese market.