Vmoto Ltd (ASX: VMT) has provided the market with an update into its second-quarter operations this morning in what management described as a "very busy period for the business". With a market value of just $65 million, Vmoto is a company unbeknown to most investors.
In short, Vmoto manufactures and distributes 'green electric' two-wheel vehicles, or scooters, which are becoming increasingly popular internationally. The group said that trading was in line with expectations during the quarter with more than 22,000 units sold — up 13% on the first quarter. However, sales were actually down slightly on the second quarter last year.
This was predominantly driven by sales from the group's "International" segment, which grew 40% year-over-year, and a 16% increase in sales to Chinese retail stores and distributors. Pleasingly, international sales are expected to continue growing strongly with many customers placing orders that will flow through to future quarters.
At the same time, Vmoto is also progressing opportunities with potential new customers from North America, Denmark, Switzerland and New Zealand. Also worth noting is that the Company is in the process of establishing an online-based retail sales network and system which should open a new sales stream for its products which should broaden its reach in international markets.
Should you buy? Vmoto is still a speculative bet, but could be worth a second look for investors willing to take on a little extra risk. Indeed, the company has demonstrated its ability to continue growing sales while its products could continue to rise in demand, especially in markets such as China where there is a desperate need for cleaner products to help with the nation's pollution.
The stock is currently trading at 42.5 cents per share after rising 1.2% this morning compared to a 0.2% fall for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO).
