Recently, Niu Technologies (NASDAQ:NIU) has started to pull back after shares made new highs on the heels of the epic run in Tesla (NASDAQ:TSLA) shares. However, this doesn’t mean the party’s over for Niu stock. If anything, this pullback provides a solid entry point for those not yet in the stock.
Source: kaykhoon / Shutterstock.com
How so? For one, they’ve built a lifestyle brand around its line of e-scooters. By doing so, they’ve developed a product fine-tuned for their target audience (urban millennials).
Inexpensive and eco-friendly, Niu’s line of scooters offer millennials exactly what they want. As a result, the company now dominates the growing Chinese e-scooter market.
And the success it has had on it’s home turf could translate into global success. Not only across Asia. But in Europe and America as well.
With shares rallying from around $10 per share in June, to around $18 per share today, you may think you’ve missed the boat. Yet, with massive runway ahead, you can buy today, and still get in on the ground floor.
Catalysts in Motion for Niu Stock
You may think e-scooters have less potential than say, electric cars. But, the growth opportunities in this emerging space are hiding in plain sight. Electric scooter sales in China are rising fast. Forecasts call for it to become a $12.5 billion market by 2025.
And that’s no surprise. Not just because the Chinese government is incentivizing the shift to electric-powered scooters. Also, millennials are highly conscious of choosing an eco-friendly way to get around.
Niu Technologies knows this full well. And they’ve fine-tuned their product to meet the wants and needs of this target demographic. Firstly, by offering an inexpensive product. Secondly, and more importantly, by emphasizing its impact (or lack thereof) on the environment.
With these two factors (regulatory and consumer preference) working in tandem, e-scooters will quickly capture the lion’s share of the two-wheel vehicle space. Right now, they make up just 10% of the motorcycle/scooter market in China. Yet, by 2030, the IEA estimates their share will skyrocket to 90%.
In other words, massive runway for Niu stock. But, “crushing it” in its home market is only the start. The company has made headway expanding its global reach. First, in adjacent markets like India and Southeast Asia. And now, its sights are set on Europe and America.
China Is Just The Start
The novel coronavirus may have been a hiccup for Niu. But, with China in recovery mode, they’re back on track. Also, as this sell-side analyst recently noted, the “new normal” post-pandemic may be a tailwind for the company’s sales.
But Niu Technologies isn’t just a play on the rise of e-scooters in China. Much like its EV peers, its long-term goal is to become a global powerhouse. And with nearly 15% of 2019 sales coming from outside China, they’ve already achieved international success.
Opening up flagship stores across Europe, the same factors fueling its growth in the East could repeat themselves in the West. Like in China, European regulators are proactively pushing for the shift from gas-powered to electric-powered vehicles. Also, European demand for electric-powered motorcycles and scooters is rising rapidly.
But, that’s not all. Niu has entered the North American market as well. Partnering with moped sharing service Revel Transit, the company’s e-scooters have hit the streets of New York City.
Granted, scooters may not be as popular in the U.S. as they are in Europe and Asia. But, things may be changing. This is where the company’s focus on the millennial market comes into play. With this cohort highly concerned with choosing vehicles with minimal impact on the environment, Niu’s products more than make the grade.
Niu’s ambitions to capture the U.S. market may be a stretch goal for now. But, it does show this company has significant potential far beyond its home market.
Niu Technologies Is Just Getting Warmed Up
It’s understandable that Niu stock has taken a breather after its rapid rise in June. Excitement over electric vehicle plays has turned major stocks in this space parabolic. Yet, don’t take that to mean the music has stopped.
This company’s catalysts aren’t going away anytime soon. E-scooters are fast gaining critical mass in China. And soon enough, they’ll capture major market share across the world as well.
With this in mind, Niu Technologies remains a solid play on the future of transportation. Consider shares a buy on the pullback.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.
The post The Pullback In Niu Technologies Stock Is a Buying Opportunity appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.