Shares of Vmoto Ltd (ASX: VMT) have surged higher today after the company provided a positive outlook for 2015. The stock rose 23.1% to 4.8 cents, giving it a total gain of 50% since mid-March.
So What: With a market capitalisation of just $62 million, Vmoto is a company that most investors will never have even heard of, yet it could play a key role in helping China rid itself of its pollution problems. Vmoto develops and manufactures electric scooters which are becoming increasingly popular in China and could help reduce the high levels of fumes entering its environment.
In an update to investors today, the company provided forecasts for the remainder of 2015 which have clearly impressed the market. It expects:
- Revenue to exceed $69 million for markets in China and internationally – an increase of more than 52%
- EBITDA between $6-8 million – an increase of 50%-100%
- NPAT between $5-$7 million – an increase of 56%-119%
Those figures compare to revenue of $45.1 million in the 2014 financial year (FY14), up 79% on FY13, EBITDA (earnings before interest, tax, depreciation and amortisation) of $4 million and NPAT (net profit after tax) of $3.2 million. Underlying EBITDA and NPAT rose 186% and 433% in 2014 compared to 2013, respectively.
Now What: Although the wide forecasts provided by management make it difficult to properly value the company, it certainly seems that Vmoto could be primed for strong growth in 2015 and beyond. While the stock is not cheap, it could certainly be worth consideration for a small position within your portfolio.
