The Zhitong Finance App learned that on May 22, Luyuan Group Holdings (02451, “Luyuan” for short), a new Hong Kong stock listed company that has received much attention in the market, successfully held its 2023 performance exchange meeting. Luyuan's senior management team attended the conference, including Ni Jie, Chairman of the Board of Directors and Executive Director; Hu Jihong, Executive Director and CEO; Chen Guosheng, Executive Director, Chief Financial Officer and Joint Company Secretary; and Ni Boyuan, Group Vice President. In view of Luyuan's strong development momentum and core competitive advantage in recent years, the conference attracted the attention of many well-known investment institutions, senior analysts and media.
At present, the global electric two-wheeler market has entered a critical stage of heated competition. With its independent R&D capabilities and strategic strength for key technologies, Luyuan has successfully achieved both revenue and gross profit growth. What is particularly remarkable is that Luyuan's revenue in 2023 broke the milestone of 5,083 billion yuan for the first time, and gross profit reached 681 million yuan, a sharp increase of 21.4% over the previous year. Thanks to the continuous expansion of the company's sales scale and continuous optimization of the product structure, the company's gross margin showed a steady upward trend from 11.7% in 2022 to 13.4% in 2023.
Against the backdrop of increasing uncertainty in the industry, Luyuan has achieved a sharp increase in quantitative profit, demonstrating the strength and sustainable profitability of Luyuan's steady growth in the fierce market competition.
“In the increasingly fierce competition in the global electric two-wheeler market, Luyuan has successfully pioneered a market breakthrough with a precise technological innovation campaign with independent research and development capabilities for key technologies such as motors, electronic controls, and batteries.” Ni Jie, Chairman of the Board of Directors and Executive Director of Luyuan Group, emphasized at the performance conference: “In 2024, we will deepen our strategic layout, increase investment in technological innovation, and optimize our product structure to meet the diversified needs of domestic and foreign markets. We will adhere to the belief of establishing a technology enterprise. Facing many uncertainties in the industry, Luyuan will continue to achieve steady growth and sustainable development.”
Independent research and development of key technologies “technology war” spawns Luyuan's core competitive advantage
According to the report, Luyuan significantly increased R&D investment in 2023, with a year-on-year increase of 25.8%. By the end of the year, Luyuan had accumulated nearly 500 patents, leading the industry in invention patents in particular.
Thanks to long-term technology reserves and R&D investment, in 2023, Luyuan once again achieved major breakthroughs in key technologies, such as liquid cooling 2.0 systems, solid-state electrical systems, and digital battery technology, which not only met users' needs for durability, but also consolidated its leading position in technology in the industry. In addition, Luyuan has also introduced an IPD integrated development system, which has greatly improved development efficiency and production and assembly efficiency through innovative measures such as frame platformization, power platformization, and generalization of components. These measures reduced the development cycle by 20% and increased production and assembly efficiency by 30%.
With innovative achievements in key technologies, the models equipped with these technologies launched by Luyuan quickly won the enthusiastic popularity of users as soon as they entered the market. In 2023, Luyuan carefully launched more than 50 new electric models. These models covered the seven major product lines of the S series, Moda series, the Extreme Shadow series, the INNO series, the Cola series, the Liva series and the Carle series, which fully met the diverse needs of different consumers.
Of particular note is the S70, the best-selling model of the year. It is equipped with PCDS (Private Customized Design System) technology and an innovative digital battery maintenance system developed independently by Luyuan. The perfect combination of these two cutting-edge technologies not only brings users an unprecedented riding experience, but also greatly enhances battery safety and durability through innovation in digital battery maintenance technology, and can guarantee a stable output of battery capacity even under cold weather conditions, thus providing users with more stable and long-term battery life. According to the data, the S70 achieved a shipment volume of nearly 200,000 units in 2023, making it an annual hit that has attracted much attention in the industry.
In order to meet market needs in different regions, Luyuan has invested in the construction of a fourth intelligent manufacturing base in Chongqing to deeply radiate and serve the southwest China market. Looking forward to the future, the annual production capacity of Luyuan's four major bases is expected to exceed 10 million units, greatly increasing Luyuan's market coverage and production capacity scale. Through the construction of R&D PDM and MES, the four intelligent manufacturing bases have perfected unified information-based management of production data from product research and development to various digital workshops. Combined with automatic reading and analysis of product quality data, the quality status and warning functions of each workshop are connected in real time to achieve safe and intelligent management, continuously optimize production processes, improve production efficiency, and ensure that every electric two-wheeler has high quality and high performance.
Another key technology is expected to recreate the “liquid cooling phenomenon” in 2024
“Achieving independent research and development of key technologies is the undertone of Luyuan's technological innovation. Luyuan has always been committed to solving the 'stuck neck' problem that restricts people's beautiful travel.” At the conference, Ni Jie emphasized the company's insistence on independent research and development of key technologies.
According to iResearch's “2024 China Two-wheel Electric Vehicle Industry Research Report”, users' car purchase choices are forming a comprehensive evaluation process. Among the top ten factors that users pay most attention to when buying a car, vehicle durability topped the list with a ratio of 38.3%, followed by battery and battery life with 35.9%, and intelligent functions (31.7%), braking safety and stability (29.1%), and comfort (27%) ranked in the top five. There is not much difference between the factors, and they are all within the user's scope of consideration.
Since 2019, Luyuan has established a key technology research and development path with users as the core, and launched China's second-generation electric vehicle — a liquid-cooled electric vehicle. Liquid-cooled electric vehicles use liquid cooling+solid state technology innovation, and are equipped with advanced technology such as ceramic brakes and steel wire tires as standard, which not only enhances the performance and quality of electric vehicles, but also brings a comfortable and safe riding experience. In addition, Luyuan also set the first durability standard for electric two-wheelers and increased the warranty for core components to 3-10 times. Since the launch of liquid-cooled electric vehicles, the cumulative sales volume has exceeded 10 million units, which is known as the “liquid cooling phenomenon”.
As time progresses, Luyuan's key technology R&D layout has expanded significantly, forming five core systems, including liquid-cooled motors, solid-state electrical systems, safe driving systems, digital battery maintenance systems, and intelligent interconnection systems. These five core systems not only reveal the deep logic of Luyuan technology development, but also clearly outline three technical levels: vehicle durability level, safety and battery life level, and intelligence level. Each level brings together Luyuan's pursuit of superior performance and cutting-edge technology, further consolidating its leading position in the field of electric vehicles.
Among the current battery safety issues that society is generally concerned about, Ni Jie thoroughly analyzed the research results of the “digital battery maintenance system” independently developed by Luyuan in terms of battery safety. He stressed, “This system is like equipping each battery with an 'intelligent warning device', which enables safety information to be shared in the cloud, and also ensures that the data can be reduced to a specific level of use, so that government departments, enterprises, and consumers can collaborate to jointly monitor and warn safety data, including battery temperature and battery usage.”
In the future, Luyuan will develop closer cooperative relationships with government departments at all levels to work together to improve the level of battery safety in the context of smart cities and smart fire protection.
In response, Ni Boyuan, vice president of Luyuan Group, said, “In 2024, we will strive to enable every Chinese to enjoy the dividends of key technology research and development results. Achievements such as digital battery technology and liquid cooling technology will be applied to more models, forming a product matrix with different high, medium and low levels, covering the needs of different consumers in the market. Industry insiders said in this regard that products equipped with digital battery technology and liquid cooling technology have greatly satisfied current user pain points and are expected to create another “liquid cooling phenomenon.”
With technological breakthroughs and improved product matrices, Luyuan's offline distribution network in 2023 has covered a wide range of 324 cities in 30 provincial administrative regions in mainland China. At the same time, its global market layout is progressing steadily, and its products have been exported to 46 countries and regions, including Thailand, Indonesia, the Philippines, Australia and the Americas. In 2024, the company will give full play to its core technical advantages, promote diversified medium- and high-speed electric motorcycles to the international market, and implement a localization strategy in key overseas markets such as Indonesia, Thailand, Malaysia, and India.
In recent years, Luyuan has also successively introduced a number of welfare service measures, such as “24-hour road rescue” and “20 free services”, and is committed to making more electric vehicles last more than 10 years. In 2024, the company plans to explore and implement models such as charging and switching, car rental, etc., and expand a diversified service ecosystem, including platform-based after-sales service systems, charging and switching models, car rental models, and derivatives.
Hu Jihong, executive director and CEO of Luyuan Group, said, “The company will seize the growth opportunities of the global electric vehicle market, expand production capacity, and deepen domestic and international market share. At the same time, Luyuan will continue to strengthen independent research and development of key technologies, ensure product competitiveness and technological leadership, promise to bring long-term stable returns to investors, and give back to society and shareholders with excellent performance.”
In 2024, with the implementation of mandatory national standards of the Ministry of Industry and Information Technology's “Safety Technical Specification for Lithium-ion Batteries for Electric Bicycles” (GB 43854-2024), the electric two-wheeler industry will enter a new era of high-quality development. At the same time, various parts of the country, including Shanghai and Zhejiang, have issued “Notice on Certain Measures to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In” to encourage electric two-wheeler companies to actively participate in trade-in activities and accelerate the upgrading of old electric two-wheelers.
In 2024, Luyuan Electric Vehicle may rely on its leading key technology and excellent product quality. Driven by both industry and consumer policies, it is expected to take another step ahead in fierce market competition, thus achieving a new leap forward in performance.