$IDEX - Update Report – Oct. 14, 2020 - Intro-act, LLC
MEG Division Takes Centerstage and Drives Growth
Growing Contribution from Medici Motors Works to Drive Topline Growth and Margin Expansion, Looking at a Strong Finish in 3Q
▪ Key takeaways from IDEX’s latest (July and August) operational performance update.
▪ Business momentum remains strong as MEG division invoiced delivery of 25 heavy trucks and 178 taxis.
▪ Growing contribution of heavy trucks – Medici Motors Works – in revenue mix will boost both topline and margins. Launched Medici Research Institute focused at developing fuel cells.
▪ Team strengthened by appointment of Dr. Liqing Hu as Chief Scientist to lead Medici Research Institute.
▪ Business momentum remains strong as MEG invoiced 203 electronic vehicles after completing delivery in July and August. MEG delivered 25 heavy trucks and 178 ride hailing taxis over the two-month period between July 1 and August 31, as it continued to fulfil the orders received in previous months. These units have been delivered to the customers and delivery notes obtained which reaffirms its commitment to accelerate deliveries post the lifting of COVID-19 related restrictions. MEG also invoiced 557 ride hailing taxis to customers and their delivery will be completed soon. September is a seasonally strong month, and we believe that IDEX will end the quarter on a strong note with record sales.
▪ Growing contribution of heavy trucks in revenue mix will boost both topline and margins. Medici Motors Works, MEG’s heavy truck business, remains IDEX’s core focus area. IDEX is gradually seeing a favorable product mix with higher contribution of heavy trucks to overall deliveries, compared to previous months, which will not only boost topline but also aide margin improvement. IDEX has increased its focus on its trucking business and is taking multiple steps to drive this business.
▪ On September 23, Medici Motor Works announced launch of Medici Research Institute to focus on the core components of fuel cell membrane electrodes, bipolar plates, stacks, hydrogen supply systems, heat dissipation systems, fuel cell engines, and vehicle layout design and integration – all with independent intellectual property rights. This will put IDEX at forefront of hydrogen fuel cell and battery electric vehicle innovation.
▪ China is the largest hydrogen producer in world, with 21 million tonnes hydrogen produced in 2018 and a large vehicle market which provides a solid foundation for deployment hydrogen fuel-cell in China’s automotive market. China plans to provide the market with at least 50,000 fuel cell-powered cars by 2025 and MEG’s initiative to develop fuel-cell technology will help IDEX capture a significant share in this market.
▪ IDEX is now taking a lead in promoting the use of non-combustion vehicles in China. With an already-strong presence across the electric vehicle (EV) value chain in China, IDEX is also emerging as a leader and innovator in hydrogen-fuel cell space which will help China fulfil its ambition of reducing carbon footprint from automotive use.