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Positive & Surprising 2018 Expected for Listed Bike Companies

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MUNICH, Germany – Despite political crises and wars, 2017 was a good year for the stock market with accelerating economic growth as well as cheap money being major driving forces. What did 2017 bring for listed bike companies and what is to be expected for 2018? Bike Europe searched for answers.

Positive & Surprising 2018 Expected for Listed Bike Companies
Stock market professionals forecasts 2018 with ‘little less optimistic than for 2017.’ - Photo Börse Frankfurt

Despite hurdles like the aggressive political style of US president Donald Trump, an increasing number of IS terror acts, Brexit, North Korea and a German government that isn’t there yet; they didn’t harm the stock market in 2017. Despite all uncertainties it seems to have its independent existence nowadsys. What’s behind this unprecedented phenomena? Is it the better than expected world economy and the politics of cheap money?

Fact is that the now into its 9th year rolling bull market is even more attractive to ‘Joe Public’ as savings schemes ceased to pay off in these times of zero interest rates. It leaves little options other than entering the stock market. But that raises the obvious question: how much higher can shares go?

Dangers lurking?

A recent report by the renowned German newspaper ‘Süddeutsche Zeitung’ pointed on the one hand to the increasing number of crises resulting from an increased connectivity of global markets. On the other hands it said that more and more money is pouring into the stock markets which is also financing the world economy. Taking all such aspects into account as well as the fact that the bull market lasts already for many yea some stock market observers forecast a crash. Others like guru Ken Fisher believe that the bulls will keep moving. Nevertheless, most professionals forecasts 2018 with “a little less optimistic than for 2017.”

”The markets do generally what no one expects. A drop would surprise the herd. But with increasing profits, high and further rising economic indicators a crash seems unlikely. Therefore a great positive surprise is awaited”, Ken Fisher noted recently.

One out; one in

Viewing the Bike Industry Stock Chart overlooking a total of 22 listed companies 11 of them ended 2017 with share value increases. And 7 of them saw double digit and 1 even three digit increases. On the other hand 10 listed companies ended 2017 with decreased share values; 9 with double digit drops. Moreover, 1 listed company is taken out of the overview and 1 in. The Japanese Morita Group – among others parent company of the bicycle brand Miyata – is taken out. Reason is that the Miyata brand plays a minor role in the Morita Group which main activity is in manufacturing fire fighting vehicles.

New entry in the Bike Industry Stock Chart is sports company Vista Outdoor Inc. This US company acquired Camelbak in 2015 while in 2016 they took over BRG Sports (Easton-Bell-Sports) brands Bell, Blackburn, Giro and Riddell.

2017 winners

The most remarkable development in 2017 has been the skyrocketing rates of Sun Race Sturmey-Archer. Frankly said it’s unknow why their share value increased three digit wise. Is it because their SA business is benefitting from SRAM’s decision to stop with internal hub gears leaving only two main makers for such bicycle transmission? Moreover SRAM Taiwan announced to close its China factory in Kunshan. Contrary to that Sun Race Sturmey-Archer opened one in China to cater for the huge demand in bike sharing bicycles. It resulted in share value jumps for both SRAM and Sun Race Sturmey-Archer.

Another 2017 winner has been Indian bicycle producer Atlas Cycles. Earlier than its October 2:1 share split the rates for Atlas shares went up. And despite the share split further increases followed. All in all Atlas Cycles saw its share value increase by 81% in 2017.
Third place winner has been Fox Factory. Their impressive 40% rate increase isn’t rooted in the also growing bicycle suspension fork and rear shock business. The US company is benefitting from rising military spending in the US as Fox Factory’s suspension business for four-wheeled off-road specialty vehicles is booming.

Number 4 winner is Japanese maker Araya (plus 38%). After an end of September 1:10 share split this share value knew only one direction: uphill.

Losers 2017

There were of course also losers in 2017. In particular Chinese listed companies suffered from double digit drops (Shanghai Phoenix minus 22%, Shanghai Forever parent company Zhonglu minus 28%). Another major share value drop came to the account from the only Taiwan chart member listed at the China (Shenzhen) stock market. Last year Zoom maker HL Corp shares dropped by 55%.

Second place loser is Indian bicycle producer Tube Investments of India (TII). But looking closer to the 53% share value drop it becomes clear that the business isn’t bad. Fact is that last year TII decided to split its operation into two entities —financial services business and manufacturing business. Therefore the company moved its financial services business to TI Financial Holdings Ltd. (TIFHL). Due to the split TII’s capital was reduced.

South-Korean bike producer Samchuly is one more listed company showing a big drop. It’s been years ago that Samchuly was a leading home market player with intentions to conquer the world. Fact is that the bicycle invasion from China brought trouble to the Samchuly business in Korea. Last year Samchuly shares dropped 29%.

For all other listed companies see the Bike Industry Stock Chart 2017 overview.

 

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