EuroSports' EV venture not expected to generate meaningful revenue in the next 12 months: CGS-CIMB

CGS-CIMB Research analyst William Tng issued an unrated report on Eurosports Global (ESG), highlighting the company’s electric motorcycles venture under subsidiary EuroSports Technologies (EST).

In the June 9 report, Tng provides a quick re-cap on ESG, noting that it is the only authorised distributor for Lamborghini and Alfa Romeo vehicles in Singapore since 2001 and 2004 respectively. The group also carries customised automobiles from Touring Superleggera.

ESG is also the exclusive distributor of the deLaCour brand of watches in Singapore, Malaysia, Indonesia, Thailand and Brunei.

On its foray into electric vehicles (EV), Tng notes that EST has been developing a fully electric motorcycle under the brand Scorpio Electric since 2018. “EST is involved in the research and development of the e-bike and clean energy charging ecosystems,” Tng says.

The X model prototype of the e-bike was unveiled in March, featuring smart connectivity via mobile app and targeting more than 100km/h and a range of 200km on a single charge. 

In April, EST signed a non-binding Memorandum of Understanding (MOU) with SMRT’s Strides Transportation to develop, market and supply smart electric motorcycles.

Given the ongoing Covid-19 situation and challenges within the automobile industry,  ESG management expects performance to be negatively impacted due to a slowdown in demand. 

"EST will continue to incur development expenses and is not expected to generate meaningful revenue in the next 12 months," notes Tng.

This comes as ESG reported a net loss of $3.4 million in FY2021 ended March, while it currently trades at a historical P/BV of 4.33 times. Tng also notes that ESG has not paid any dividends in the past five years. 

As at 4.47pm, shares in ESG are up 0.5 cents or 1.96% higher at 26 cents.

Photo: Eurosports Global