Please ensure Javascript is enabled for purposes of website accessibility

Why Niu Technologies Shares Jumped 56% Last Month

By Jeremy Bowman - Feb 1, 2021 at 11:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A strong fourth-quarter report helped lift the EV stock.

What happened

Shares of Niu Technologies (NIU 13.80%) jumped last month as the Chinese electric-scooter maker got a boost from a strong fourth-quarter sales report. Investors also continued to be bullish on the broader electric vehicle sector .  

The stock finished the month up 56%, according to data from S&P Global Market Intelligence

As you can see from the chart below, Niu picked up momentum after the Jan. 7 sales report and gained through most of the month.

NIU Chart

NIU data by YCharts

So what

Niu shares jumped 16% on Jan. 7 after the company said scooter sales rose 41% in the fourth quarter to 149,705 units. That wrapped a year of 42.6% growth to 600,892 units sold. That rise came in spite of the COVID-19 pandemic. China, which makes up the vast majority of its sales, also saw strong sales growth, rising 35% in the quarter. The company credited new models like the G0, MQi2, MQiS for this bump. These models now make up 43% of China's market volume. International markets also accelerated, with sales nearly tripling to 12,119. Investors clearly approved of the report.

A Niu scooter.

Image source: Niu Technologies.

The following week, Niu got a bullish note from Needham analyst Vincent Yu, who raised his price target from $36 to $46 and kept a buy rating on the stock. Yu also said he expected to see strong demand in China due to new national safety standards for EVs that could help boost the replacement cycle. Yu further noted that partnerships with ridesharing operators could drive sales overseas.

Now what

Electric vehicles hit a tipping point for investors last year as a number of EV stocks surged. That momentum looks set to continue this year. The Biden administration is expected to push for EV adoption, and General Motors also plans to go fully electric by 2035.

As a scooter maker, Niu offers investors a different avenue into the EV sector. It also trades at a significant discount to many of its peers. Considering that the company sold more vehicles than Tesla last year, this stock is worth considering for any investor looking for EV exposure.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Niu Technologies Stock Quote
Niu Technologies
NIU
$8.33 (13.80%) $1.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.