NIU - Earnings call transcript Q3 2020

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Operator

Good day ladies and gentlemen, thank you for standing by and welcome to the Niu Technologies third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time.

As a reminder, we are recording today’s call.

If you have any objections, you may disconnect at this time.

the to turn will I call Mr. over Now of Yang, Investor Technologies. Manager Relations Jason Niu Mr. ahead. go please Yang,

Jason Yang

Thank everyone. made available third will Operator. and Investor Niu company’s The you Relations replay Hello press provisions financial Technologies’ United to of conference will of statements earnings be a call posted results contain discuss spreadsheets Harbor call website. have IR for on discussion corporate the XXXX. today’s This the and soon. the release, website quarter the note of been XXXX. from States Welcome of presentation, to webcast Niu’s Litigation today’s being Please Safe Private under forward-looking Reform call the Securities is Act

factors. materially regarding the may The The company’s to statements Forward-looking except not Securities involve included as factors with statements actual any the assume different forward-looking any Further Exchange information those and by other be expressed the today. law. risk public filings required in is Commission. risks, uncertainties, company’s and update does from results company obligation assumptions

call financial Our of discussions and press reconciliation measures non-GAAP this to a measures. includes release and release financial financial of certain definition GAAP of a results. The press earnings non-GAAP non-GAAP contains

CEO, On Hardy Zhang. and Dr. the are call our today our Li Yan CFO, Mr.

let turn over the to call Yan. Now me

Yan Li

Thanks Jason, and thanks everyone for joining today. us on the call

an with sales In volume market increase units, units, increase. X.X% quarters, China volume XXX,XXX a our increase, reached the sales XXX,XXX year-over-year units, first the the XXX,XXX reaching in compared with reached a a the volume had last increase. have total XX% of international in volume year-over-year The growth We in sales year. QX strong XXX,XXX whereas year-over-year XX.X% reached three XX% market units,

product by marketing, in growth driven was new channel operational our strong Our performance and expansion. in the market factors rollout, both and China

was nine The XX in months, bicycle First units in the increased market overall first to XX% quickly and the million the the Information by Ministry China. let comment of on This three by landscape overall Industry driven has increase factors. according to electric me market Technology.

post COVID-XX electric convenient, bicycles of high demand their commute. mobility more the more First, to safer devices sentiment means people daily as led for find a individual

bicycle adoption this to started of industry removal XXXX with plates, with cities such safer the China product, of and electric the environment standards, users. license more Second, regulate created a for as incompliant

was particular ion lithium bicycles costs with electric XX% with have to in market batteries of to of the to XX% product are fast XXXX. and battery in electric versus ones, new marketing, this efforts bicycle Amid growth ion and XX% bicycles ion-based Lastly, XX% It portable lithium decline, we estimated continuing become more electric accelerated rollouts, expansions. the lithium in the that also affordable. channel lithium year our

tier Meanwhile, motorcycles introduced to at and of accounted demonstrate in and we G volume. G from RMB in Furthermore, now GOVA series. The inherited and lower product, design enriched markets GX, With the G entry total capability us of sales branded volume the series the we in mid-end XX and series family QX, rollout. GX, newly more level Supported bicycle M for also In cover cover the earnings our GX, GX, to and mentioned new electric The entire we MS MX as bicycle. MX in of our sales a we launched introduced consumer with at Both XX% our prices up July. needs QX. call, the series family model accounted viewed of stores XX% the to In upgraded of continues XXXX. segment GX, design by than to product, to store of footprint customers’ allowed and in launch full was with the signature with bicycles electric QX, last the increased market starting QX MS an in open series for market. GX, for in and QX. the entry strong electric price June accounted campaign. model total As MX expand XX% entries. to the and series stores MS our sales our X,XXX our product range which dedicated GOVA China GX GOVA product, RMB JD Zero, the expansions XXX our stores, the XXXX, at more with successful our are it M series full throughout of compared close cities, we our continued serves electric increase

increased same This QX all-time Despite sales growth significantly our the an time expansion. XX% of all effort also increase stores, retail This is of highly per-store high increased to quarterly with year. sales healthiness the was new in stores indicator future by also last in retail retail enjoyed store for fast compared a our were and we retail year-over-year the operations as XX% as number good add of This expansion. profitable. demonstrated our

are To a accelerating tier in we well to retail also able the year GOVA our in position only Furthermore, store to QX. the in marketing presence but support not as series, leadership build we cities. expansion, good new in tier We cities scaled consolidate up activities our XXXX. retail with top able this openings our as were lower in QX also

WeChat brand was as all kicked buses. interaction This partnered effort and this and front, and the is of channels our and media of in with Weibo, enhance new with online online the in and a advertising called social of XXX subways a more mass the show Back competition million like lifestyle offline views, On generate total XXX exposures cool campaign, DouYin, to media a brand continue a than They to image brand. coordinated and Kuaishou, million Dance the Street, hottest show, Street advertising with QX. off campaign we China,

with cartoon market in a quite of out we on based across Japanese This Gundam product. popular to edition multiple rolled Gundam, with and Gundam XX new views build content close co-branding image hype special channels. China, We also bit brand with continued to a of co-branding This received MS million a has our efforts. our time worked

let me to the market. over overseas turn Now

as Our to were demonstrates working as China in expand from the to we interactions stores and XXX,XXX swing while across Similar to and market, without of growth growth we flagship premium of more fact X.X% premium people to QX, to we markets with individuals to X,XXX as small X,XXX in and will see flagship X,XXX a increased ship have overseas XX added so start actually with our demographics the normality the our of overseas and more back for units, had Facebook. retail to This only our social year-over-year, flagships will retail from with than core market reached back shipping. QX have orders, stores QX due Along home, date another go work, Instagram to international our are branded in able we in not in of is QX premium sales mobility. overseas XX% now in XXX our the on and footprint our this also orders premium from XX most branded a expansion, time our market Even the year-over-year. to effort for individual upped and continue the QX, we with stores our In XXXX. delayed scarcity media also sales XX% to by down continue to in close we year flagship stores. about

international While will we globally, healthy sales watching our we growth return situation that to the are in this the QX quite closely confident year. COVID-XX are

Now I discuss to Hardy turn financial to results. will over the Hardy? call our

Hardy Zhang

and Yan, you everyone. Thank hello

all figures need. you and release the comparisons press Our contains

uploaded formatted easy figures website IR the also have Excel We our to reference. for

monetary unless As I the otherwise. financial our unless figures third say noted. figures otherwise quarter referring are are performance, RMB to I review All we

sales XXX,XXX launch. due volume increased increased increased and product sales units, containers sales by network to reached XX% difficulty sales by QX shipping. lower for expansion results a to of new and volume X%, than International international COVID-XX year-over-year. as mainly our by expectations, China fill retail of result XX% volume the Our

challenges these of to into continue fourth some quarter. expect We the

initiatives currently working in different markets. continued to deliver We from growth order international on are

ASP we The for earlier. XXX and with GX GOVA the million, mid-end XX%, QX accounted launched XX% percentage gross accordingly. few volume, the N volume of line our ASP a accounted higher products, few XX%. on decrease a by in Out for total growth high of revenue new offset to Q GX by product mix XX% remaining in XX%, as models. from are changed XX%. XX% we the for of series the driven margin. a the mix, is There negative impact XX% was scooter, guidance and accounted provided series per increased The volume GOVA the for GOVA partially decline. of XX% had other for and RMB series product XX% ASP from or M and Regarding of the by from Total sales series accounted revenues GX increased model sales drivers series,

of XX%. GX First, price affected model low around sales negatively by ASP

the especially Second, of product sales around ASP affected to N lower series [indiscernible] the percentage high models, by mix negatively from products, change in X%. price

slower decrease overseas affected and from growth to X%. impact the is spare [indiscernible] operators due the sales by COVID-XX. the customers sales X% margins from to end remaining which due our counts directly around Third, relatively parts promotions in The mainly to

Gross quarter, points when is year. due similar decrease few We percentage. QX than expect to mainly a continue some XX.X%, was into lower X.X gross to margin by this last margin the percentage of factors. compared ASP expected time lower therefore was last to with these The drivers year a fourth

Because save impacted sales First, end able expense. sales marketing customers, end to discounts and the on we we by we the offer are to margin offered X.X%. to and discounts customers sales promotion

a marketing As reduced our spend XX%. by of and sales revenue, percentage

hence Second, disposal by discontinued was below margin negatively cost affected and around price we our disposed products. X.X%. of The

[indiscernible] to products our battery total various which relatively margins such in are stable impact last last of with specific and caused savings product for year. disposal to [Indiscernible] X.X%, the X%, negative by with impacts The from from in decline the and compared the and Third, volume both higher sales both are GX, quarter on by margin margin, offset lower we quarter. the this which was are QX gross components. mainly the gross cost is able around mid-end however GX impact packs has

expense RMB Our foreign The RMB million. million spend XX XX staff Higher and increased was R&D increase year-over-year. million exchange expense, was XX RMB or loss, compensation of and mainly the marketing fees. spend. higher and decreased by caused XX total professional including G&A mainly RMB surcharge, XX operating million, tax million for XX% share-based by by of Sales design and related however, costs to expense, RMB

a sales X.X%. to which affected offered we the We marketing then and earlier, were revenue discount to margin As by our end expenditures. mentioned I consumers our able reduce

As year. of share-based X.X% compared with a X.X% QX excluding revenue, compensation the marketing percentage and sales in was last expense,

Our government grants. XX.X were X.X grants year. quarter, for government million for The lower eligible company additional RMB RMB than is last in QX the million significantly this

XX We have after payment book we applied government delayed. into only statement for was government cash. from grants income receive We RMB but million government our the grants in it

were X.X grants compensation Our of the million almost an expense the last quarter. new the year, RMB Compared XX.X with quarter. share-based second we as in employees same to it RMB had what is during QX due the to million, increase

adjusted increase was one net of year. caused Our X% an million point and last than income GAAP RMB factors. margin by net income XX net was The XX.X%, lower percentage million, a QX The few adjusted was RMB decrease was XX% year-over-year. income XX

offset margin X.X%. was Our but gross higher was lower by leverage, X.X% operating was which

by net the from which affects margin grants, net negative our negatively year. the income impact government margin actually lower grants, last improved we have adjusted X.X%. has our exclude We If government against

quarter flow, the RMB improvement cash quarter. million short our cash, billion in of RMB X.X term with to deposits and sheet investments, compared an XXX term Turning balance and we last ended with

accounts RMB accounts because reduced receivable, inventory, improved XXX operating million of flow Our and profitability, was cash increased reduced payable. around

new and expenses. to openings international around and capital R&D XX related markets, store were additional machinery, expenditures in million, Our new RMB China mainly

healthy quarter. very strong a balance have the We sheet cash flow and in third

turn let’s guidance. to Now

million to We to XXX XX% year-over-year. million, quarter increase of expect XXX the RMB fourth be revenues in X% RMB an of range to

the The both decrease the change overseas product ASP in We expect and market. and we from third growth will to volume what saw similar to mix, due sales continued the quarter. year-over-year second in China

sharing parts. result but Throughout higher operators in strong year because this in addition, will ASP overseas our operators fourth from much year, order also in of and QX sales quarter. orders not COVID-XX. In continue network markets. do scooters such high sales has orders revenue they retail spare the accessories than not and operators manufactured last other to we from spare this We as parts expect had a reduced in our sharing expanding only sharing usually sales The we for are quarter, In China. significantly

new QX. in at to stores a as such open more expect We was speed

are construction for our which continued We facilities of working also prepare on Changzhou, XXXX. will us better manufacturing new the growth in in

any market for a QX, strong go began We open start recovery. had that, have book you that Operator, to recover. overseas a for may us. questions the Our which very is let’s demand order ahead. call for good With for now please

Operator

question go have from [ph]. ahead. a do We line Please instructions] first [Operator Duam the Roger of

Roger Duam

you Management, three questions. for have thank taking my Hi I questions.

how Can My second pressure continue have one. negative lockdown. Management can to from to XQ is XQ expect ASP trend and our the of percentage which in the should tied series with countries lower units quarter as there these international competition, past, can insights and Management local and international grow avoided XXXX? G G you. the given we to changed about somewhat we How continue offering competing price question largely dealerships first any by What is a regard impact it is market to for in from how we’re somewhat we with first of experience the the continue several industry them launch First, for have different re-entered the markets markets legacy of but our Thank products will for potentially question directly share international magnitude XXXX, are we think on My with sold? strategy In share share leaders? competition about makers? series. price taking have thinking these products categories, has third e-scooter to after

Yan Li

you. Thank

question to and I on ASP is cover try the questions. Yan, Hardy are think and one This great have those front. so two three, I’ll I’ll cover to

because ordering the yes, it’s market, retail, our a QX international our to quarter of closed, the were terms of sales you in was the keep QX, because a the that on the lot confidence stores so that little to usually see worst QX of April, in a like--that’s we all stores our decline think I actually terms time where case I of--the have quarterly and In May, in think gives distributors actually closed. the XX%-plus we is, mind lot see we on sales, after. ship product, international, a in of there basically

for because we think in of to really of there that international ordering in with up QX, QX But that we say of more an closed shipping door distributors confidence, are seen seeing most orders in orders have Now, XX%. seeing not that’s scarcity in what started our is uptick where not happened because a reality, to in the I starting to stores bit why and declines. about able scooters gave containers. out stores But had that’s May, actually should we and of X,XXX start open then is so huge anything, are our we we distributors

QX. are quite our of a We orders point lot are an book actually coming confident in. view, of From with order actually

We expect healthy growth for really QX.

of working ports Now, a scarce the seems market. know, international in QX issue huge at actually in containers enough This ports. a order a at order resource we’re shipping international be there’s the seeing lot But actually shipping, from is actually, point not international for to take-up the this that containers. the Europe--you perspective, an people booking the

think the is on this I side. XC

States pick-up Most year a doing the of because from people we’re Sharing for of operators. in bit opposed Europe. and this situation, United we seeing both this a not as home, a sharing little to of year orders operators by with you’re year, XB been our scooters, year from last the the operators from side, working on really are year share COVID-XX side, operators a where order share not great seeing haven’t on XB the this saw lot XB. Now well

slow. this We will where a I this for the sharing with in recovery we’re orders on the example, QX already know, in next QX year, hoping seeing bit the Rebel one, like, in, terms XXXX, been orders some of the and operators have in from they’re But but we’re sharing are that from come a the recovery United States, seeing think already in ridership because seeing States. the United operators--you

but a quite markets. we’re in international XB year, QX the going side, bit think next QX uptake see to a likely little QX, where on bit I next for probably QX year of most we’re seeing

press but are--as most entry are the this one. potentially QX healthy February official that fulfillment basically know, a in because XXXX, Now The lastly in happen number the pre-sales in question put add marketing market. Hopefully Indonesian Indonesian won’t the growth will Southeast enter we that Asia, Indonesian marks revenue, actually major order will presales actually the and the that the countries Asia. our Southeast we the market sales--you to where into in or step be starting March, entire is market. actual campaign addresses but and this XXXX we will in basically for see in we first out release, into will This be December, a the revenue year where

question to lastly, question--I’ll just question think I think two. I Hardy three, number to then on address add on I’ll number give

- more market able with that our segment, we players entering in presence promising mid GOVA results. into think so other or have think the series far where achieve mid quite we high seen GOVA to less completions, like--yes, market, that the are segment been has brands to traditional have I mid to I market we I it’s high or are--with the yes, end series, think but

RMB in up traditional come still With sitting our demonstrated--and also to product mid we product priced end, experience to terms RMB the QX brands and compete the ones XXXX, of with market in price high and XXXX, in accounts experience. end have the when we’re on that good series actually from think the I able we great we riding to a are about at It mid sales. design GOVA be range, we basically the for XX% entry RMB XXXX only of with looking in but now product with used to, end

market gain to We are traditional players. from the able share

zero target accelerate Tier where in to mid Tier cities presence an With confidence, journey, in went high. issue lower market up X to to store the you the the gain those actually store we’re we’re beginning to with added used marks sales more stores or QX, one we open XXX stronger basically by XX%, XXX are actually going this have with this because particularly Now looking the at able quarter of per-store market and X this to share cities, an the This at so our well we additional where cities, look about this that’s marked is little end also approach, where as use know, really has allow more we not--you we presence. openings XXX mid store stores, us stores the cities adds, even have end like from able as that, competitors. product, opening where in to stores us effort, in to allows all-time cities, product open our consumers tier are more

continue and record all-time to beat high, our historical we’ll in I openings. of think store terms that’s a

the Hardy I’ll address part. Now pass to to pricing

Hardy Zhang

models, ASP decline with the third quarter, product similar so at they the we seen by China and XX% the quarter the short to year-over-year. GX by sales the percentage; X% the a segment, year ASP affected a so Of That’s for ASP expect you The down parts. ASPs international spare by in tell was already the from sales XX% at China this the encourage last GX. from they XX%, QX look especially came market, third there In quarter, product we XX%. around percentage by ASP the quarter ASP look markets, will for of XX% takes remaining year, will around ASP, down around for China a [indiscernible] and no that the story. as GX, and numbers, [Indiscernible] scooter accessories different sales, coming volume. however, other was mix at changing higher from the was [indiscernible] ASP ASP you’ve third around we the year, lower compare The we fourth of sales in for the Last in have total XX%. Yes, price product. if was by affected the

year-over-year the trend in have year continue will the fixed XX% will if market the other there fourth for at look China sales over for in Then of with look international ASP forward, if therefore at ASP be the in look you you mainly in we volume if this going the in [indiscernible] we for to you increased ASP. models, quarter. improvement, small the the If some markets, there, for actually this change, the some improvement, the see international however we [indiscernible] markets change at improvement compare year, quarter [indiscernible] ASP by China our will because

is pricing. quite anywhere the Then stable, market lastly so parts international the we [indiscernible], significantly relatively see sharing international spare do relatively ASP relatively China ASP the it this parts operators. to stable; market, for So however, XXXX overseas stable stable for we services, price on market, around spare RMB - was by one the can the impacted it’s our sell always and was the to for the market accessories of much how

for the sharing as in year from do see not some operators going orders much in mentioned ASP QX, down. have we the and in QX As this call, do expected pressure therefore we

year shared and orders for coming market, of the the for both also both for begin also--from next parts. some see from we new and the international to spare operators sharing do in recovery scooters with However, the

but pressure some next For year this part, we do improvement. QX, see we potential into for see do

the fourth a quarter compare decline quarter, I fourth you do year-over-year quarter, to expect percentage, in the short, but compared in similar ASP ASP you compare improve think third quarter we with will So if quarter. will if

look how that then If This year, we for your answer next much second year. QX at QX ASPs should and you question. [indiscernible] means next had the

Roger Duam

so you clear. much, Thank very

Operator

Thank you.

the question Alex We Piper next from coming from of have line Please ahead. our Sandler. go Potter

Alex Potter

capacity first Great, my is Changzhou. regarding question thank you guys. in I guess

of you’re of next still How the in mentioned the in what now is process annual expanding capacity be capacity what much What’s to the You there. update? left it capex, and terms will year? spend your is versus

Hardy Zhang

starts. Alex, X year, new to Hopefully address complete another Yes The X quarter million total has next your anywhere including capex the units, on me the to October season question. six for the million, because to and capacity, months new capacity--the months, the land--including between XXX sometime it’s second around we land. million question. to new construction. We let from RMB Currently our this started factory RMB will million the five capacity to construction XXX answers peak this the in around six during and take total the and bring second design be us your capacity is new plan quarter, board going capacity

Alex Potter

long What you discounting you gross very a specifically, talked of ASP. expect promotions were do and bit doing what and also which keep the--what about much. on products some promoting the Okay, was were impact to promotions talk you an yes. you in Thanks wondering Was if how margin the quarter, and the about that? you little running, were price could

Hardy Zhang

question. think I good very Yes,

from promotions different this also of customers, year compared QX, with last around years have and use price, our and this our a both this they gross cash quarter. with X for margin. cash also deduction a think we our I and sales can gave We promotion end format therefore [indiscernible] [indiscernible] to spent deduct early revenue we from million to the direct for RMB

of kind have consumers, are because it ways. directly different in gave of better more promotion for full to money end price, mean, people We because QX--I it’s mainly sensitive we we therefore send than the COVID-XX, with this

quarter. therefore promotion we more these year, the promotions, this one-off to QX we from such no of attribute promotions spend, third kind However, in kind of have

Alex Potter

certain Okay, and or was this types any specific broad? products, it for was of

Hardy Zhang

customer, pick win, broad, get Initially consumer everyone to like, something. to goes it the they model so the they’ll basically goes it’s No, system. a they store end it’s and the will and the lottery then

sale Someone gets from the their that someone price. price, cash RMB be XXX which a directly sales can can deducted is [indiscernible] deduction direct get from

Alex Potter

interesting. Okay,

Hardy Zhang

[Indiscernible]

Alex Potter

are the Okay, from the when the that is you’re Can it on do and remind last you demand--because enforced, change. new regulatory sounds some exactly will you think me then question like regulation be getting us are and you think people replace that to going When to by materialize? Do the that scooters. new know I be regulation to their forced of demand you doing people most obviously now? that the do expect

Yan Li

city. depends on Alex, it city by

different new It First did years. the cities new temporary different regulation in and the was basically enforced of all, announced regulations, XXXX, XXXX. started being on actually XX, April

see, Beijing, and the the license they essentially plate, three XXXX some license plates they of scooter said the gave like have a--you can by the won’t what year. can I temporary use basically know, means which do a--you think, license starting you replacement call scooters to for For end will a in temporary city be out XXXX of early temporary expect we incompliant XXXX, years, actually which you so next example, of of use scooters or,

loosely, this much, in presence think think stores the Tier regulations cities places, our replacement quickly The more actually some X, actually stronger us much this see for also cities, those know, actually cities, regulated good I Tier cities. share model the still most for highly regulated a to X, this of where our and add are highly think Tier market expand--you highly being very is is X the thing is in is into regulated because an X us the driver cities the I Tier indicator--I in you yet. enforced won’t very--in in uptake cities, where

Alex Potter

much Okay, guys. Thanks very great.

Operator

you. Thank

next from question our the Bin Credit Wang coming have go line of Please We from Suisse. ahead.

Bin Wang

Okay, thank three you. ones. actually I have also

XX% number production The the year-over-year. about increased a about [indiscernible] because the in angle, by very top-down market, quarter, overall in three is overall first one China

actually half, I elaborate guidance guidance. why calculations have your can That’s have high momentum? [indiscernible] regulation growth, so a November correct, actually outperform, growth? one. growth second bad, my a in based the the rebound more you high correct is excluding on so XX% is some dip next November-December you if timing, [indiscernible] in different the regulation reason in huge the That’s so are growth than impact it’s number, and I [indiscernible] slowing don’t in guess, not the guidance Basically December the the the If about get high for and down end the the can and the that XXX,XXX you or high series the November-December [indiscernible]? understand cannot care, have the really the so elaborate only after actually difference on Number numbers people based can Meanwhile, the December, say, have a Meanwhile, XXXX For growth? that but bit and conclusion? November two big around whether because was and so of end, [indiscernible] what’s about such second we on how year XX% means it end yes, one. come number growth, to so revenue, to G the if [indiscernible] markets in best in is [indiscernible] quite key driver, conclusion

new see we year? why when quite next next plans so a and because see one guidance and this or doesn’t if been third one coming product, it any how past growth maybe will in have year the product, launch new you bring be [indiscernible] you RRI, in of store showcase, about few number is MRI but volume, what’s this called product one, next and meanwhile new new news, think of the Thank The more your this year, for your you. end years, volume and product about year so stores,

Hardy Zhang

I think question new the about your first [indiscernible]. all is

the XX%, of if and Technology, talking anywhere their is think information electric you’re to the about. published look volume Industry between I you Information, at depending on growth by market QX bicycle Minister which XX%

we growing [indiscernible] XX%. higher Our growth much - is definitely are about

high our in series the a end, for us grow growth correct You’re XX%. also key [indiscernible] is a MU and to driver that has China, around

high electric the models to of one that, the the key be of other customers the not I compared with to of not the enforced, growth want including high that’s high--high lot a price of the this regulation to function bicycle. new bicycles, says think definitely able bicycle add speed top functions, we after the is to rates pay the why have key the regulation [indiscernible] one lower [indiscernible] extremely therefore going reasons think to categories. do was were Because price models, I electric new price limited also, was and reasons the for

sales For your second the that volume have October-November I in question roughly ranged okay. about and December, think you

factory to December. environment make it’s the to November earnings I in to as up of used prior because [indiscernible] December. of high and of our full November of in [indiscernible] our our our you for safe for release, Because demand because work we the produce to September our the in some disruption why make also factory, to think because This of December. that, the--had already therefore did the machinery we October, and of we in huge utilization third one volume a sure have November and mentioned reason operational [indiscernible] that’s some is we in sales our the usage quarter, [indiscernible] see have factory

opened sales have which drivers significant our help for and for all--we that’s them and we continue GX so Mostly model, as to a stores stores opening open December. we volume mentioned, China we already will November reason, volume sales second continued new see launch accelerated mid-end the few as growth model. new to to increase The already us in we our--there’s process more as the us open in we [indiscernible] places have

guidance, year’s year, For making next [indiscernible] are so during we [indiscernible] next this call. won’t we

think next In terms product I Yan will will to I comment on plan. few leave a and I then of to new launch, words comment year’s

are the high product volume not--they the that actually they drive The ones products, early the therefore year, growth into they not RQi our TQi models because some reasons, overseas growth, market for for we will not and COVID-XX, new the reason therefore launched mass TQi, very are volume we EUB, the For the overseas the higher. TQi, year. postponed year for of of production of priced EUB. RQi, have also yet, RQi is production the this EUB in they achieve able for much [indiscernible] markets, and still to the not are we This mainly different and are mass they’re

For we our to believe next and the and We in sometime of products some to growth new plan we will quarter. additional be year, launch the new second key in we do models continue launch launched volume the China. models China will for during market China drive the products

We driving what we December use Since to launch launch and in year. presales Indonesia the in are drive market, market. will new question going already to the volume products to your is models Southeast GOVA began and enter the the [indiscernible] to to to volume Southeast believe the help launch that in of market, can of Asian Asian the this next growth some our Indonesia drive year, middle us are market, [indiscernible]. in answer the Yes, the this comments For [indiscernible] product market. we That’s especially our into December. overseas growth is we they the on began we in how

Bin Wang

you. thank Okay,

Operator

Thank you.

Yin with We have line question ahead. CITIC. Please from of the next our Xinchi go

Xinchi Yin

you thank questions. Basically my for Yes, two taking have question. I

to The what other What’s speed, is our sales year expansion. or to of strategy motorcycles, stores are terms I is a also know difficulties higher in our of question target. you some the export so terms sell opening Indonesia, long channel our in we details about a and can store maybe second competitors so major production, factory want on term see for channel first there, or and you target and you. whether stores. My compared one to our concerns opening brand next local product the also e-motorcycles expansions? and We our store build share going so in at Thank

Yan Li

questions. good think I Thanks,

so quarter, and stores the not year. we guess more about stores, opening this thinking add were our actually we’re capability now up for about XXX this It The actually next next we really have and able earlier, in to have ambition and we mentioned busy growth distributors higher XXX we one that relative been have the QX, for we depends--I to will wrap in QX with open open are we first more QX effort, our has game it QX where up stores quarter but how sales the year. in stores, usually willing one actually year year, to actually see than depends on store QX I the as on openings, so keep mind in

I expansion. think that’s basically on store the

easily a More so means as data went with it’s more, at if QX, even how because open with still to year on construction can we our basis. sales this on the here, XXX importantly, or XX%, stores will and we look have guidance is QX, XXX that--it quarterly can you new XXX lot that store can XXX, how adds, stores well of the get up actually actually depends a per-store That we room to by point, finished. actually faster, be in see [indiscernible] we’ll so next see this actually for fast at the there to capability open

will local--it will a with huge have I has think tariff. will Indonesian be [indiscernible] we one, it’s--yes, to--initially it market, be Now Indonesia because the

of want affordable sort of market have viewed a you the but the more enter we think the to will affordable is parts. to enter factory not--we even will now, so next we on about will in high questions. Later the a will volume product, actually to actually not luxury at we’ll product us half I If X% tariff some that China, partner the how as manufacturing that That’s Hopefully but answers a the it’s sales not being your locally product, to in Indonesia, might product. tariff We which that for actually help daily level, will the have price commute a we’re sourced, than [indiscernible], less ensure happen the want actually--right parts get of being mostly with range Indonesia. year. make and see--depends what ship build XX%, goes. because invest to pricing a the entire Indonesian to XX%, from year, have product, next assemble end actually basically product mass mass product will This to relevant. lower We on

Xinchi Yin

you. Thank all That’s you, for questions. my thank

Operator

a gentlemen, telephone. Once your you. ladies press please again to question, star, and ask Thank on one

[ph]. next question from Sebastian our Van We ahead. coming line the have of Hellen Please go

Sebastian Van Hellen

evening. good Hi,

protect series, GOVA what extent the of you to to use your Thank intend do importance sales you. to margin? upcoming the With after

Yan Li

conducted in to it’s From I as sales series. using I method GOVA stores. our with think think still the will think other similar protect sales even retail I friends be series, after after the by with margin,

they the the app level The batteries, IoT smart our the a the services LFP users because or being smart MCA level, as is the app can and at actually not actually But the look the think a--the so series series, alternative but base--basic significantly question--when have product, I it’s lower though than an our then have add-on, - without not of it’s on actual MCM it’s the support the uses--it’s people sales on after even IoT, or to download register for the can the take receive smart price cost MCM reduce the IoT, actually which the the some--because we actually actually to and well. able margin batteries but who doesn’t the series batteries. less helped using GOVA well. IoT probably at it that app, lower the where the marked scooter actually--with series, reduce of doesn’t an prices, battery cheaper less, MCA end and the it’s the does users of slightly app set actually at GOVA less. than it’s actually couple so MU percentage actually as It’s same it’s

Sebastian Van Hellen

you. Okay, thank

Operator

you. Thank

the have our from ahead. next Please Gong line Paul go question of We UBS. from

Paul Gong

question. my Thanks hi. Actually for I question. one taking only have Yes,

view? in decide You tariff that is your Indonesian mentioned so a to factory, that’s still should the how over why the is we [indiscernible], forward, the market required In XX%, of there. you build tariff the foresee view going and local the for factory

Yan Li

that’s a question. think great I

think the that actually as we the covered lot the haven’t of if like we by yet, basically solve electric will actually sort a as but motorcycles detailed are motorcycle, are actual well. saw information, well, information got detailed treaty, I issues news looking--we really then of our the actually so

rather having to actually decided get there, way is put into actually our of motorcycle That’s manufactured we is from manufactured there, Indonesia we industry, the where the so tariff factory tariff opened in parts right in example, that not up for don’t manufacturing frankly, planning. reduced it’s locally one China me in there that and really China we’d being own actually--we easier versus and We locally that land where lot why protection if the but buy change or tight everything with controls shipping there. Management complexity, everything, was actually reasons local a this understood of brands there will our have manufacturing actually insurance, to, and a build assembled Indonesia. - have Let to much [indiscernible] because it factories, manufactured our own now are significantly,

option flexible, gives the the--by us because a simply at whole more point, that that out using as on thing depending of this how partner treaty flexibility, still goes. a assembly using watching We’re

Paul Gong

helpful, thank very Okay, much. you thank you. Very

Operator

for Thank you. turn more in the queue, Seeing to Li Mr. closing no the questions me let remarks. back call

Yan Li

again and so thank and appreciate you for participating your and you. to support. Operator, next quarter Right, to interest thank our look progress. call forward you reporting on your today’s We for on all Thank you

Operator

again. the call. This you Thank all concludes

You may now disconnect.

Niu Technologies (NIU) 23 Nov 202020 Q3 Earnings call transcript