June 10, 2021

Venturing into electric motorcycles

■EuroSports Global Limited (ESG)distributes and provides after-sales services for luxurious automobiles in Singapore.

■New business development: since 2018, ESG has commenced the development of its own-brand fully electric motorcycle.

■ESG reported a net loss of S$3.4m in FY3/21.

Luxury product distributor

ESG has been the only authorised dealer for Lamborghini automobiles in Singapore since 2001,and the exclusive distributor of Alfa Romeo automobiles since 2004. The group also carries customised automobiles supplied by Touring Superleggera. In addition, it operates the only authorised service centre in Singapore for all the automobile brands it represents. ESG is also the exclusive distributor of the deLaCour brand of watches in Singapore, Malaysia, Indonesia, Thailand and Brunei. Its subsidiary EuroSports Technologies Pte Ltd (EST, Unlisted), is currently developing a next-generation fully electric motorcycle.

Scorpio Electric

Since 2018, EST has been developing its own premium electric motorcycle (e-bike) under the brand Scorpio Electric. EST is involved in the research and development of the e-bike and clean energy charging ecosystems. According to the FY3/19 Annual report, EST will be responsible for the regional distribution of the e-bikes. On 10 Mar 2021, EST unveiled the X model prototype of this e-bike (featuring smart connectivity via mobile app, targeting more than 100km/h and a range of 200km on a single charge) with pre-orders to be opened later this year. On 19 Apr 2021, EST signed a non-binding Memorandum of Understanding (MOU) with Strides Transportation Pte Ltd (Unlisted), to develop, market and supply smart electric motorcycles.

Management’s outlook statement

Management guided that given the volatile global economy and prolonged Covid-19 outbreak, the group’s performance is expected to be negatively affected due to demand slowdown. The automobile industry outlook remains highly challenging amid intense competition and a highly regulated environment in Singapore. EST will continue to incur development expenses and is not expected to generate meaningful revenue in the next 12 months.

Loss making in FY3/21

ESG reported a net loss of S$3.4m in FY3/21 and trades at an historical P/BV of 4.33x. It has not paid any dividends in the past five years. ESG also reverted into a net cash position in FY3/21 from a net gearing of 0.52x in FY20.

NON RATED by CGS-CIMB Research. Share price closed at $0.26.