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Gogoro (GGR) completed their merger with Poema (PPGH) on April 5th, and it's done well thus far, sitting above NAV at $15. There's no doubt that the EV market is still growing rapidly and that Gogoro's future is looking bright, but now that the merger is complete, I want to reexamine their 2022 projections. I believe by doing so, we can assess whether the Gogoro deserves the valuation at $15/share. I will talk about each of the four countries that Gogoro operates in, and how they can contribute to an improved 2022 forecast.
For 2022, about 90% of Gogoro's revenue will come from Taiwan, and for 2021, it's around 98%. Their operation is just getting ramped up in China and Indonesia, so this makes sense. Gogoro announced recently that their unaudited 2021 revenue is ahead of projections ($326.9M) by about 10%. Gogoro's current 2022 projections show $445M from Taiwan, if we translate this 10% into 2022, the expected revenue from Taiwan bumps up to $500M. Incidentally, Gogoro had two strong months in 2022 already. They sold a combined 7,308 units in January and February, representing an increase of 132% over the same period last year. Historically, scooter sales varies from month to month, so this may not sustain. Nevertheless, they are off to a great start.
We can expect to see further growth in Taiwan as well. Currently, e-scooters account for 11.6% of total scooter sales in Taiwan, so there is still plenty of market to capture. Taiwan government is also helping the push. They are looking to raise EV sales to 30% by 2030, 60% by 2035, and 100% by 2040. Even though Taiwan is a small market compared to the other three, it is still an important part of their revenue stream for the foreseeable future.
I wasn't able to find direct sales figures for Gogoro in China, but I was able to find related data points. China initially had a target of getting to 20% EV market share (of new vehicle sales) by 2025 (this may have updated recently, not sure), and in Sept 2021, China already boasts 18% EV market share. This shows that the EV boom in China is growing quicker than anticipated.
I also found some data points on Gogoro's partner, Yadea. They reported 10M units sold in 2020 and 13.8M units sold in 2021. Unfortunately, I'm unable to find data for DCJ, but I suspect DCJ is a smaller piece between the two. The latest investor presentation shows the projected unit sales in China is based on 2020A data. Yadea and DCJ's combined 2020A sales is 12.691M, which means DCJ is only responsible for 2.691M, or about 21% of it. I don't know how much growth was included in Gogoro's projections, but I believe Yadea's 2021 sales exceeded expectations.
Last bit of info is that they have 100 cabinets in HangZhou, 20 cabinets in Wuxi, and will start deployment in Kunming this month. I don't know how significant these numbers are, but it is something to watch moving forward.
Gogoro announced a partnership with Gojek back in Nov 2021, and started a pilot program consisting 250 scooters and 4 GoStations. The plan is to ramp this up to 5000 scooters (no time frame given). Further, Gojek has 2 million riders in their network that Gogoro can eventually tap into. The key thing is that Horace (CEO) said “We haven't updated our financial forecast to add increases from Indonesia.” Seeing how the pilot program just started 4-5 months ago, we may not see updated projections in the next ER, but I think it's reasonable to expect updated projections for 2023+ before EoY.
India is probably the most bearish of the four. Although Ola Electric, one of Gogoro's major competitors in India, is currently being probed by the Government (their scooter caught fire), their sales have been gaining momentum. There are also news and concerns regarding government regulations with swappable batteries. There are no clear indications that Gogoro's expansion isn't going well, but I also haven't found anything to suggest things are progressing better than expected. Since Gogoro won't go into India until late 2022 (at least no financial projections for India for 2022), it shouldn't affect their outlook that much this year.
Given all of the above, I believe we can expect to see an improved forecast for 2022 (and beyond) in Q1 or Q2 2022 ER. The growth in Taiwan has been spectacular and China's EV growth is equally impressive. Additionally, it seems Gogoro is ahead of schedule with Indonesia expansion. India is the only one that could pose some problems, but hopefully things will turn around as the year progresses.
It's hard to put a number of how much projections will improve, but I think a 10% increase isn't out of the question. I also think that $15/share sounds about right at the current moment. Given Gogoro's potentially strong performance and the recent surge with EVs (e.g. TSLA), it isn't hard to imagine Gogoro staying $15 now and pushing $20 heading into 2023.
As with every company, there are risks. These are the main ones that I am looking out for:
Disclaimer: NFA, do your own DD
Disclosure: 12000 warrants of GGR