Stock markets see a drastic correction after a high rise during the pandemic Bicycle Stock Chart turns red in 2022

MUNICH, Germany – The events of 2022 had a huge impact on financial markets; it was a disastrous stock market year. The pandemic was barely halfway over when

Vladimir Putin launched his attack on Ukraine. The war disrupted the global energy and food markets but also led to high inflation in Europe. How are the listed e-bike and bicycle industries affected?

Jo Beckendorff

The record-breaking 2021 stock market year made it foreseeable that a correction would follow in 2022. It was inevitable that the market could not continue developing like in the previous year. Still, the war in Ukraine made this correction come much harder than expected. The stock indexes on the world market turned in unison into the red last year. While the US Dow Jones stock index is still doing quite well in a year-on-year comparison with just a 9% drop, the Japanese Nikkei and the European Euro Stoxx 50 indexes ended the year with an 11% decrease. The largest stock index on the US electronic stock exchange Nasdaq, the Nasdaq Composite, rattled off even as much as 34%.

A year of cancelled IPOs

As far as IPOs go, 2022 was the big drought after two successful IPO years earlier. This can be seen in the Bike Europe bicycle stock chart, which had fewer than five new IPOs in 2021 and none in 2022. The cycling businesses that took their companies to the stock market in 2021 fell flat on their faces the year after. The newly listed companies Bike24 (down 74.8%), Bike Exchange (down 91.9%), hGears (down 67.1%), Signa Sports United (down 42.2%) and USWE Sports (down 62.4%) all roared to the bottom in 2022. The respective companies all reported sound financial reports, but the future is what is traded on at the stock exchange. History has shown that in times of pandemics and wars, the future looks doubtful. The bicycle industry saw two leading companies pulling out of the stock market: Dorel Industries and Accell Group. In January 2022, Dorel Industries announced the sale of their bicycle business operating under Dorel Sports (Cycling Sports Group and Pacific Cycle Group) to Dutch Pon Holdings (among others, parent of Pon. Bike). Dorel Industries is still listed on the stock market but is no longer shown in the overview. All Accell Group were taken over by private equity firm KKR, and the company was officially delisted on 22 August, while Swedish safety helmet manufacturer, Hövding Sverige, went private in June.

The bike-share platform Donkey Republic is new in the Bike Europe bicycle stock chart. The Copenhagen-based startup has been listed on the stock exchange since May 2021. The company operates in over 70 cities in 13 European countries and is expanding rapidly. At the end of 2022, Donkey Republic stood at plus 6.3% at DKK 8.56. That is a remarkable achievement in the challenging 2022 stock market.

The 2022 bicycle industry stock chart consists of 42 share values. Of these companies, 36 saw their stock being dumped by investors. Only six share

Bicycle Industry Stock Chart 2022

CompanyRate on 01/01/23

YOY % change

Capitalization52-wk-low52-wk-high

AccellGroupNV,Amsterdam---Delisted-------AllegionPLC,NewYork*US$105.26-20.0EUR9.25blnUS$87.33US$133.52 AntaSportsProductsLtd,HongkongHKD116.90-12.5HKG277.60blnHKD67.85HKD134.20 ArayaIndustrialCo.Ltd.,OsakaJPY2,020+19.7JPY11.25blnJPY1,380JPY2,670 AsahiCompanyLtd.,TokyoJPY1,372-5.2JPY35.83blnJPY1,260JPY1,450 BafangElectric(Suzhou)Co.Ltd.,ShanghaiCNY106.99-52.6CNY12.87blnCNY98.13CNY233.72 Bike24HoldingAG,FrankfurtEUR3.79-74.8EUR167.17mlnEUR2.36EUR16.46 BikeExchangeLtd.,SydneyAUD0.01-91.9AUD12.08mlnAUD0.01AUD0.18 BridgestoneCorp.,TokyoJPY4,949-5.2JPY3,21tlnJPY4,042JPY5,509 BrockhausTechnologiesAG,FrankfurtEUR22.40-2.2EUR245.23mlnEUR13.50EUR26.40 ChengShinRubberInd.Co.Ltd.,TaipeiTWD33,90-6,1TWD109,88blnTWD31,80TWD39,85 CompassDiversified,NewYorkUS$18.23-40.6US$1.32blnUS$16.32US$31.35 ContinentalAG,FrankfurtEUR56.40-45.9EUR11.22blnEUR44.99EUR97.81 DonkeyRepublicA/S,CopenhagenDKK8.56NEWDKK137.02mlnDKK5.80DKK10.05 DorelIndustriesInc.,Quebec*****-----------FoxFactoryHoldingCorp.,NewYorkUS$91.23-45.6USD3.86blnUS$69.28US$171.80 GiantMfgColtd,TaipeiTWD200.50-41.9TWD82.02blnTWD197.46TWD351.00 HalfordsGroupPLC,LondonGBP209.00-39.5GBP457.56mlnGBP123.90GBP36780 hGearsAG,FrankfurtEUR7.24-67.1EUR75.30mlnEUR5.22EUR24.00 HLCorporation,Shenzhen**CNY7.14-28.5CNY2.63blnCNY6,28CNY11,28 HövdingSverigeAB,Stockholm---Delisted--------HwaFongRubberInd.Co.,TaipeiTWD14.50-13.7TWD4.05blnTWD13.70TWD16.90 IdealBikeCorporation,TaipeiTWD16.50+24.1TWD4.98blnTWD10.85TWD24.95 KendaRubberCo.,TaipeiTWD30.30-2.6TWD27.56blnTWD29.35TWD38.85 KMCInt‘lInc.,TaipeiTWD140.00-29.1TWD17.64blnTWD135.50TWD208.50 LeattCorporation,NewYork***US$19.00-37.7US$110.71mlnUS$18.00US$33.04 LeeChiEnt.Co.Ltd.,TaipeiTWD20.15-26.1TWD4.50blnTWD19.85TWD28.30 MeridaInd.Co.Ltd.,TaipeiTWD167.00-49.0TWD49.93blnTWD162.50TWD334.00 MichelinGroup,ParisEUR25.99-82.0EUR18.54blnEUR21.99EUR38.93 MIPSAB,StockholmSEK429.90-63.8SEK11.25blnSEK281.00SEK1,242.00 PelotonInteractive,Inc.,NewYorkUS$7.94-78.7US$2.7blnUS$6.66US$40.35 PiererMobilityAG,ZürichCHF67.10-28.6CHF2.26blnCHF50.60CHF96.00 SamchulyBicycleCo.Ltd.,SeoulKRW7,340-31.7KRW8.62blnKRW7,200KRW10,700 ShanghaiPhoenixCo.,Ltd.,Shanghai****US$0.39-7.1US$491.79mlnUS$0.37US$0.42 ShimanoInc.,TokyoJPY20,920-31.8JPY1.90tlnJPY20,110JPY31,750 SignaSportsUnitedN.V.(SSU),NewYorkUS$4.91-42.2US$1.90blnUS$3.23US$9.90 SunRaceSturmey-ArcherInc.,TaipeiTWD40.55-17.1TWD2.43blnTWD40.05TWD61.00 TandemGroupPLC,LondonGBP257.50-55.2GBP14.34mlnGBP223.00GBP608.00 ThuleGroupAB,StockholmSEK217.70-60.3SEK22.76blnSEK199.60SEK556.50 TubeInvestmentsofIndiaLtd.(TII),BombayINR2,775.55+58,2INR535.94blnINR1,441.95INR3,046.20 USWESportsAB,StockholmSEK22.40-62.4SEK101.73mlnSEK20.30SEK79.20 VistaOutdoorInc,NewYorkUS$24.37-46.2US$1.38blnUS$22.97US$52.69 YadeaGroupHoldingsLtd.,HongkongHKD13.06-14.1HKD38.59blnHKD7.59HKD18.74 YoungoneCorp.,SeoulKRW46,950+7.6KRW2.06tlnKRW36,650KRW53,000 ZhongluCompanyLtd.,Shanghai****US$0.80+73.3US$996.50mlnUS$0.45US$1.41 Composed by Jo Beckendorff (no liability assumed)

* Allegion is an Irish-based spin-off of Ingersoll-Rand and traded at NYSE (hence US$).

** Shares of HL Corporation from Taiwan is traded on the Chinese stock exchange in Shenzhen (hence CNY).

*** Shares of South-African Protection Wear supplier Leatt are traded OTC (Over-The-Counter) in USA (hence US$).

**** Shares of Chinese Shanghai Phoenix Enterprise and Zhonglu are taken from the US stock exchange (hence US$).

***** Excluded from the table after the company sold its bicycle division Dorel Sports to Pon Holdings in January 2022 values in the overview, including newcomer Donkey Republic, escaped the downward trend.

Out of those 36, a staggering 31 shifted down by double digits last year. The largest drop was reported by the Australian online marketplace, Bike Exchange. After the IPO in February 2021, shares slowly decreased. In 2022 they plunged to -91.9% – a record in this overview. The second biggest loser on the list was French tyre manufacturer, Michelin, with an 82% decline, and Peloton, down 78.7%. Considering the overall situation, six stocks were treated rather mildly by investors and lost only a few percent of their value. These include Nippon bicycle specialty chain store Asahi (down 5.2%), tyre maker and Bridgestone Cycle parent Bridgestone (down 5.2%), German Bikeleasing Service (BLS) majority owner Brockhaus Technologies (down 2.2%), Taiwan’s tyre producer Cheng Shin Rubber

(down 6.1%), Kenda Rubber (down 2.6%) and Chinese OEM Shanghai Phoenix (down 7.1%).

Contrary to all these losses, five companies in the bicycle industry performed very well and four saw their listing increase in value by double digits. Despite all hurdles of the global market, the Korean majority shareholder of Scott Sports Group, Youngone, successfully cycled against the general downward spiral. The share value increased by 7.6%. Some companies even achieved double-digit increases. Nippon component maker, Araya, was up 19.7%, Taiwan’s third-largest bicycle producer, Ideal Bike, was up 24.1%, TI Cycles’ Indian parent Tube Investments was up 58.2%, and Shanghai Forever bicycle producer, Zhonglu, was up 73.3%. It is unclear why this group was so popular among investors and why their share value increased so much against the other bicycle companies as well as the trend on financial markets in general. The listing on five different stock markets makes this performance even more remarkable.

Outlook stock markets

Where do our bicycle stocks go from here? The unpredictable Ukraine war makes everybody cautious, while the forecast for the cycling market is still gloomy. But how will the financial markets respond to all these uncertainties?

Experts believe inflation levels will continue to decline since this trend started in December. They will, however, remain at a high level. Financial experts expect that the interest rates will not drop for long. On the positive side, the transformation to a climate-friendly economy has gained considerable momentum, and the bicycle industry certainly benefits from that development.