- Earnings call transcript Q3 2022

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Operator

Good day, and thank you for standing by. Welcome to Niu Technologies Third Quarter 2022 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Ms. conference like first to now today, speaker would hand over the your I Senior Manager. Zhao, Wendy IR Thank you. Please go ahead.

Wendy Zhao

note of for Thank you, to third a today's release, results the call our and posted is financial at the company's today's Reform to will harbor available IR replay and of from earnings spreadsheets well, be safe quarter the corporate of webcast Act statements the have being soon. presentation operator. Hello, U.S. call forward-looking discuss Investor everyone. as Please Niu Relations Welcome discussion This contain the XXXX. Litigation made will press call website The XXXX. Private under on been Securities conference – Technologies of website. provisions

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

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

with call CEO, Dr. Fion Yan are the me On our Ms. today Li; and Zhou. CFO,

to call Yan. Now let turn over the me

Yan Li

those QX XXXX, prices, faced factors All and to thanks, And material Wendy. COVID of fluctuations resurgence business everyone, for today. joining operations. our disruptions you, serious aftermath in In the from Thank rising demand our on risk us challenges brought market raw from China. the call

the volume market and Total in overseas mixed was Sales the Total the a delivered down volume the category, nearly attributed China market markets. sales we China biggest down by XX.X% in volume international reached market. XXX,XXX sales international a decrease sales. [ph] by to the units sales new year-over-year XX.X% XX,XXX in quarter, experienced result kick-scooter in in in year-over-year. growth was this China year-over-year. in bringing we In dip the units, During market,

challenges over to go each I'll market Now detail. opportunities and in in

China cost, high scooters lithium-ion our in COVID experience reduce cities our the percentage the volume the year-over-year. increase are acid demand the and optimize majority us significantly sporadic battery to also has We rollouts. to across This the entry-level the continue the the lockdowns to scooters market. actively widen. batteries of gross produced top lithium-ion with accounted for The and replacing declined X QX height market new replacement percentage the the cost, Tier standard those cities. under standard X, new since loss which over We entry product Tier also of part based, for e-scooters old targeted especially products, lines as in has portfolio the impacted of national scooters product level XX% our of margins. the QX increase battery just product penetration increase slowdown has of China the lithium price impact X battery of and the beginning between First, year, QX had sharp raw in XXXX, the market the the a of difficulties The the observe rate lithium-ion market new gap in scooter battery for that for entire the we asset-based material since lithium-ion due lithium Tier X as Tier of and electric the delay price

replacements by year. of of of XX% completed For the were most overall example, Beijing declined the market last

and lockdowns our year. was the our COVID products still sales vicinities cities, not based. more partially Given rollout impacted R&D has sales our where main least, to this is this but top-tier Shanghai in Last, year, been significantly also our the in resurgence are concentrated delayed center volume due

U+, enough year new not fuel Gova products to launched sales. able released product core or this they for SQi And August Those high-end were ship sales September. late like in August, be our has GXT won't and series early we high-end the the until provided our missed XXXX in shared have like BX was seasons key Although December. the

sales the in new product rolled as positive foundation high-end and despite in for product media drop our a from also re-strengthen the This out and but lay lifestyle Now rollout, volume delay XXXX. strong newly consumers. to the helped the responses overwhelming the out the received brand brand China,

the X,XXX which material, my was We earnings RMB customed received we quarter's talked SQi and than I pre-release. more XX,XXX SQi in briefly of well First, innovative mechanism priced by revolutionary for pre-released X,XXX last have August about the look aerospace the e-bicycle call. to market. received in evolution at RMB this pre-orders With the

new we U+. around within of but the U+ XX,XXX U+ product time, our same and functionality. economics first light Another for most classic has series, The launched additional controls riding shipments time designs, nearly new a smart inherited is new U The rollout. improved designed personalization XX has its the design over high-end days and with popular

the products Double new top helped best XX category products to one number category Niu our festival, Together the the seller one During those scooter of. by has transportation in new in electric number ranked Taobao. on shopping U+ with SQi,

X-wheeler we electric position the record-breaking in reconsolidate in the sales SQi premium the With to of our and market China. U+, new lead

via events. brand of as view views all the in the billion collaborations urban across has a China, strengthen with X.X PR we again gained market Those of initiated XXXX. new a campaign total the platforms, had lifestyle launches industry. brand marketing activities product campaign media launch similar of in product marketing Xx a we new The mobility our the events off-line messages social around marketing, and of launch PR, Now product, along user

increase, product brand as our took brand price portfolio as step optimize the a towards high-end premium well a our product lithium China. our premium the the to amid re-strengthen gross we to Now as in improve margin to

entry-level while series product three series XX% XX%. XX%, percentage first product reduced the premium [ph] XX% our For X our from increase from to to quarters, new continued to

from of came X,XXX. orders XX% RMB festival shopping product e-scooter our XX over Double During online,

rise basis despite gross to significantly costs, in material So the we China by our points. in improve raw managed margin XXX

electric market, lithium demand the faced the dollar challenges from we well international of and to temporary Now shutdown prices. X-wheeler sharing rising exchange the in rate and as headwinds in increased euro the macroeconomic coming as U.S. market the the markets

First, one for last for The sales current the accounted has deployment. the focused sharing market in operators on the electric temporary but has year the of motorcycles as capital international this merely sales our year. CapEx raised sharing for third sharing additional market shutdown not expansion,

that. So this year, from sales zero experienced we a

the in which the prices, the in forced consumer the sales impacts of to prices European increase lithium Now electric also segment. the in coupled our weak euro the market, - right second, right with us motorcycles the

in So of overseas went at XX% the year-over-year. motorcycles in market electric sales end, QX down by the total

market. during of had from However, Thailand Indonesia mainly we and market, the XXX.X% quarter, significant year-over-year a growth this Asia growth Southeast the in of sales

During the the GXX in of electric government's green provided National transportation. scooter effort by Summit officials used the to Bali, to support be Indonesian local Niu Police the

X-wheelers effort happens. traditional to to have trend We gas-filled in Southeast the it market expanding from hope continued electric X-wheelers Asia as transition the grow as of with we

of first to We with market. of market, have trial micro mobility decline we the solutions motorcycles a adoption to electric also swapping the growth aid exploring in motorcycle in experienced the tremendous started Singapore. Contrary battery the electric

out market sales season rolled category, For QX had autumn in a growth a during kick soft we during the have XXX% our of category [ph] product to from sales to electric needs. XXXX, of Since significant quarter strategically of for a growth motorcycles. scooters XX,XXX kick-scooter range we of the rocketed cover units kick-scooter The QX, quarter-over-quarter. wide kick-scooter

The first KX launched proven are KX the to market. be successful and in

but During sellers one, in French, two these kick-scooter models Spanish industry. the the Amazon Italian The also recognition the only among from Best popularity products Day in sales Amazon X gain kick-scooter Summer category Prime ranked on and market. were number not kick-scooter number July, in customers,

sustainable scooter for model device the MAX best perfect top coverage by received and second U.S. overall scooter by awards. Guide KX a annual from of big the TechRadar. outstanding tech awarded place Tom's TechRadar KX best awarded by was in number electric Guide [indiscernible] also Spanish their was Pro Tom's media, It medium The a including mobility one ranked [ph] and Our a

our with It's a a offerings with covering product, XX long also miles. two $XXX from batteries to products. adult first kick-scooter children swappable drive lightweight $XXX, along launched [ph] Now is have is and two the for kick-scooter product offerings. to product a portfolio. to those during now product where the battery we Also we We KU's add product, pre-launched KX and our – e-bike QX, recently. X range KX two With complete kick-scooter kick-scooter offering expand of XX-year-old. CX price our entry-level kick-scooter range KU's continue kick-scooter product we added, product both to

our we shops, mobility Now we than our But on have channel number over from Europe only through building also to of we on momentum expect XXX expand our riding by products. year. to focused in our grow Media retail brand like and recognition was kick Through online besides North sales, online presence shops next sales markets. working craft by our Mart. point across awareness to have and not QX, the effort, with a store our solid started from Meanwhile, sales brand built we micro arms but product the gained end for Buy and achieved more Best and America, off-line retail channels, launches, scooter image also [ph] shops sold this a new X,XXX the we

and In along to believe and sales marketing content media our expansion bringing gained product potential to our articles support XXXX. big our XXX larger effort million views marketing. Friday total from PR and has articles has than of exposures I growth growth and that over with The our the more PR with category XXXX, product. mobility expansion Black views our in we in activities, product our of coming is sales, channel Those create fan over on of until million PR published a channels in exponential plus portfolio, we Now all sales a developing bases collaborate TikTok. generate marketing featuring much XXX to with micro YouTube content platforms. cover portfolio product X influencers the

cautious QX, the market Now we remain demand. outlook. quarter a in a always terms of low for been China market, quarter fourth In has

continuous. Now on of top the price be demand, the increases of impact will the

key our add addition, to markets. also uncertainty In additional sporadic COVID the resurgence

motorcycles. the market, traditionally bounce low continue the haven't an we a sharing have category. the that to We sales Now the business is quarter, on seen our positive expect from electric on increased price QX in for exist market, trend in and overseas the electric growth but saw impact a moderate back in X-wheeler we and since will a sales a international kick-scooter

the and been out has face increase we In impact a our tough year financials. macroeconomic XXXX headwinds quite and of bringing a as foundation however, promising for negative overall, uncertainties from our face operational operations adjustment made few So strong the a for mounting material a raw lay to challenges, XXXX. in we business crucial price

Now company since brand category name in quickly ambition solution in urban China globally. to the we a provider was capability, scooter smart the the technology our and establish Niu has a mobility well-recognized created and mobility. to innovation lithium-ion in lifestyle motorcycles strength our electric Leveraged formation brand global the design of become a able

Also, market months low-end three just widespread a high U+, in material facing high-quality and Gova SQi this as media as are the Those product of products leadership, testimonials accounted our XX received the and are premium of in in increasing opposed two first overwhelming The R&D market kind GXT in revolutionary products series there is as teaser first in products, was to The well time nearly and year. the U+ XX% products a to series by days and has our also to of and to new as feedback and brands our of the the new Those the product technology shift, generated on well have the Gova capability positive our mid-end its proven the debut. like the in debuts. out we BX design. their Gova next recent brand series proven quality for on are drilling series, new innovation received premium effort The in our trend a focused the with recognized China of products creation. offer Now premium of new R&D SQi in media. market. on high-quality new regain lift series first year social and product growth entry-level

observed front, Now since resilience to the gain we rebound people transportation and market that prefer COVID on commute different provider pandemic. to kick-scooters and after in solution expansion of solutions personal great with micro mobility like global according e-bikes needs. XXXX We have continued significantly made the mobility regional and The product method. show when through to progressed urban the different categories transports popularity

and market market, We positive leadership first. products kick-scooter have in year brand four channels the our X player established successfully drilling ourselves gaining recognized within response entry, in always just from online

to our of XX% in stage. growth market off-line its channel in sales off-line channels, as XX% still market, as scooter we see for early kick potential huge a Now from this our is

to the e-bike similar We the the have to in planned take a kick scooters. of approach repeat success categories

in e-bike As launch are presence, other to we customers e-bike plan online the into and also up the the product order a and product, traction. Meanwhile, marketing next also the we channels, to online bring after we building to plan the in offline shops, wider specialized brand officially e-bike first expand stores actively year, bring QX attracting awareness.

electric the sharing sharing as year our operation. setback I the still vehicles market, still for are demand the took we in believe is Now this nearly although in market, replacement motorcycle a there XX,XXX

We expect operation. some replaced of them in years XXXX in X, after will X be

addition, Asia able to we're year. several market this planning the achieve the seed, Southeast In meaningful years in growth of after

also come. cost for be years ready and the game could battery to to the solutions lower the in which swapping changer investing product consumers, have in the upfront a We are R&D for

those growth XXXX. with the we and and mindset we're Now temporary will in recover strategy our and our brand and downturn XXXX regain re-strengthen determined profitability very in execution, that then and optimistic focused from

to discuss financial to our over CFO, turn Fion, I Now results. the call will

Fion Zhou

Thank have your everyone. note for need, the that figures contains we you, and format release all comparisons easy excel and Yan, Please press to figures uploaded hello, you reference. IR our also website our

from volume, it are has by volume. was XXX,XXX financial to continued decrease. total of as this we're our otherwise, third specified. period review [ph] I figures the contributed and the XXX,XXX China are if volume international looking units, same the not the Total in been business overseas XX% our quarter to total representing a all we referring and mandatory units of compared that our X contributing of Sales the volume quarter China I XX% sales RMB As volume. and was decreased And for year-over-year overseas months, including sales performance, quarter at the year, traction. say gain growing if market fast unless sales market to XX% market last of figures third XX%

which last was remain by XX,XXX the sales last e-motorcycle While more most XX,XXX due level, Total to XX% compared sales in contributing business see was versus doubled volume mainly the volume among XX% decline to units than volume And year. in sharing thanks from quarter China our X,XXX to of defining quarter of The in sales XXX,XXX the decrease sales markets decreased impacts Europe the in volume to premium sales capital, to XXX,XXX raising new budget to facing and same volume to kick-scooter sales the together [ph] accounted the continued of units, to others. total XXXX. one of kick-scooter International be third expansion. the challenges ramp for those to This headwinds the temporary same series. two units, up. sharing sales reached which are in year, series lower-end units Gova premium our at total the third of turn, period high-speed companies their of growth, market compared volume models for the entry-level

XX% million e-moped down revenue. China our quarter of by XX% are In XX% the the which XX% compared mix X.XX looking concentrated since total market RMB XXX XXX revenue, than X,XXX, China Overseas ASP the e-scooter product mentioned by XX%, billion, revenue a scooter decreased higher e-scooters and as to the year-over-year decreased category the kick-scooter, was kick-scooters the To ranging, total accounted quarter, scooter branded by revenues. were for by scooter the is our last overseas nearly total of ASP more same overseas saw a quarter, and on of ASP RMB the revenue was million, revenue third each in reached was scooter kick-scooters, share as to now price e-motorcycles increased separately, of and threefold market ASP third XX%. first scooter premium Branded autos of scooter increased taking ASP XX%. year-over-year. improvement revenue of lower X% the on the market year RMB But ahead. only at including to greater XX% both break more by from year-over-year to was XX% in X,XXX by period decreased The RMB basis

In X% was for XXXX of less increase, ppt due market, in overseas compared X.X to proportion revenue were XX.X%, RMB kick-scooter the due Out U.S. year-over-year services and this exchange the ppt of increase the of to mix the X.X quarter battery X.X demand gross to product higher extra third to dollar X.X better ppt quarters. packs. by and due addition, parts the decreased ppt margin spare XX margin. of was X X.X accessories, China the with higher than due higher million, Gross the sales ppt ppt minus previous in lower quarter rate and

compared the of revenue quarter last expenses XX% RMB than total year. million, was XXX of for the Our the expenses higher was as third The XX% year-over-year. same operating operating to period XX% percentage

amortization around in we and a XX in market. expenses promotions higher platform are into efforts and products the Going Shopify into the were RMB is the kick-scooters cetera. of million quickly year-over-year, and the still to kick-scooter To expenses. our XXX and popularity, and and and million stores Despite e-commerce and rest for lots leader details of like RMB Amazon, online global RMB e-motorcycle, RMB being we gain new new million resources in including product new marketing domestic million Total [ph] marketing selling et depreciation XX put of expenses costs. stock-related XX

increasing. inputs to for market more level as in the expenses believe micro We those into already off-line to areas share will as sharing are believe more further downtown in Starting have new we and setting their our to lasting enter we XX we showing a rides offering is with held our stores, cities channels, global new to the become those a a paid crucial celebrate and providing fans forward feedback next mobility, October, in us glad products, of with off of each going the for market and us from promotion end us events in online series see and expand share August of of experiences test lower bring help than online kick-scooter customer excellent up riding percentage which the other. to top platform revenue leader China, and

user we marketing the core To promotions domestic in More we fans quarter. those invested more community. expenses and this being to million RMB keep in marketing importantly, to XX committed and summarize, altogether overseas

million which together The increased expenses XX% in period and portfolio was support organizational staff-related RMB RMB expand expenses nearly amortization global Design R&D marketing and a professionals representing higher, were store the we higher. million addition, other year, XXX same the an to channels will have and expenses upgrades Those million technology of depreciation new invest retail and we and RMB for our X X-year of XX new adding stores. year, footprint, resources RMB million, third [ph] XX% were last continue quarter, XX,XXX In million operating exclude on expand last and financial impact will franchise are compensation compared technology among and by of G&A increase in expenses a expenses. selling global our continuous XX expenses talent, XX we testing share-based to and development revenue. by year-over-year, to product pioneer. as total RMB our

or this and high-tech million year. we income were compared tax fourth with the the X.X% period tax XX was a in third RMB compared lower the was was XX net quarter. X.X%. quarter income income of This quarter, as same same X.X Since refund provincial tax, compared qualify margin benefit quarter of million last booked X.X% in net XXXX. expenses income last the The will enterprise, million tax RMB we RMB with in non-GAAP for X.X of a income identified had an and Adjusted corporate RMB [ph] quarter income RMB million, was as XX net Jiangsu XXXX in we margin million to

ended the X.XX balance restricted our sheet RMB term and short-term billion quarter in to We Turning cash, and cash, deposits cash with investments. flow.

the mainly to billion by a flow openings term was Inventory came the was when CapEx XX to slightly basis [ph] operating million need The fast benefits same kick-scooter from period decreased our last we in year. basis, mainly on for RMB calls. positive XX decrease down. ramp-up million Our since to mentioned increased orders of locally due million, RMB new XX was a due the year-over-year store payment RMB the sequential to The a XXX quarter suppliers. previous stock ensure cash as up and on the the mainly international RMB sales slowed in, turnover in third because to compared

to million expect XX% RMB is of Now this on light aware on go among please the based us. date CICC. uncertainties from for Jing change first Please decrease the Please of of information various preliminary the as premium to RMB recovery range subject and ahead. current to the year-over-year. any pandemic of and let's to XXX line COVID-XX you. question to - for the focused that, market, strategy With of million, a Thank go you [Operator the we expectations, now the the Operator, factors which questions peso The turning have as that from our open that be be fourth turn guidance. such related available others. comes is Instructions] quarter reflects the ahead. call and may XXX due no revenue Chang to in volatile domestic the company's the outlook and change market the In to

Jing Chang

explanation. from have CICC. Thank in Thank your Yan. I questions. is This detailed you, Fion follow-on Jing you, two Chang Hi.

expense. that of our decline? the and to And present, expected reached So do state our steady expected is see first to in expense? expected The promote marketing which from about looking our battery Fion see is And the level historic And and sustained second our selling ahead? selling part is still the can is is very At just be question expenses? we high. is a breakdowns which mentioned marketing to methods third quarterly about and quarter expense what and selling We part what And some product reduce the - pipeline. we to my have about high. cost of lithium marketing

segments So want or premium my we as domestic to market positive in strategy sales lower-tier market product on next new we for two This year, Is the some so you. market especially growth. Thank the Chinese our achieve more for questions. what city market, product? focus for as should is

Fion Zhou

question. Thank the first I answer you, This Fion. will is Jing.

XX,XXX the same level last amortization years. X from for continue sure, about for that expenses breakdown. said, and and opened questions the to depreciation at new think will as stores selling and we marketing, starting And the your you at already the to least next XXXX, stores gave expenses amortization the the will XX those Since more I months. and related for I Regarding depreciation new than

will in year we same that the years, years, for So stores addition for that the the following of we those X expenses. next we for And amortize and kind those opened selling still this marketing have new way. expenses means expenses the in the and in

which the level. we kick-scooters, marketing the reduce So with level, our at by the still expansion the significant traffic And X online the this mean as are very expenses the of operations, our were X strategy those globally. mentioned, especially million or next selling at a which around are we unless share increasing I other expenses, huge remain t I expenses level, kick-scooters. in the still be it share daily using still in which a efficiency. expenses market for part years, for promotion is or expenses. the – will increase at is expenses Otherwise, the Those around lowest market our a significant XXX,XXX promotion are units since the for major But the online will part along the should

three - next the the altogether expenses marketing execution three will And to selling efficiency. selling will beginning at reduction next lowest think, already make and improvements the expense, merged we the the For - for statements we staff quarters, summarize, staff X two question. did level quarters, whole Yan. company's of for we RMB to cost. impact those quarterly least the pass - the increased whole improve financial for the basis. guess several X teams, to that, decrease of XXX question XXX of think million only is for increase we we and for made benefit staff the I I RMB the answer to would to on see will around at quarterly on a the means your and the we I maintain But I'll since second efficiency the the several since made sure, the level cost, - already Those costs on of first then you cut see to the staff will quarters. the which later the remain million already And two obvious company's from financial XX% the or reflect remain after least This at expenses year, the the statements. for next to will

Yan Li

Sure.

down. look first on definitely we'll if add as if little to terms bit go value, of question, but absolute number, so it in a at think I just percentage you think So right? of I that the you look sales, at

look its the almost look you like If revenue. at sales the this QX marketing XX% we at and XX%, year, of

just numerators, I in growth our revenue the of as mentioned up denominator, it's as that's what right, on think partially what on you not is obviously the was terms see Fion the number, below expectation.

high in So why amount. a rollout, But percentage. see fixed example, cost like It's by lot look we percent know, in activities divided it a or - overheads, product XXXX like of keep if a you fluctuate. That's X% marketing XXXX, to a look have X% somewhere our revenue you basically and as nothing for XXXX, you we marketing you but or at right? sales if fixed guys revenue, between roughly our of

that's we the similar. XXXX. to is that absolute trying think But obviously, amount - I on I But what we're that's target probably in note. think get dollar just to

think asked second product I about investment. part, the you the

series, X,XXX I mass above RMB X,XXX the we above is Gova also mass anything we basically, the for X,XXX, to RMB the focus the something premium China think where call market, we issue what basically on will premium product the premium RMB premium anything call our product high-quality be which new actually product product. be what will

you costs, Those will it's nothing, gross at will of product, it's all is [ph] almost because at after a for become the partially that the margin be stuff. insignificant diagnostics of as if this a contribution the know, but the increases, we making actually it's did company our those focus, almost the think lithium into for not zero, entry-level be products take on when price consideration I you value point. sales deep XXXX, focus [ph] actually basically, - the least X sort series

that, what reason the we I - still premium the high. entire that's at that you if the for the entire that the on market our So said Having and mid is we're end. call product market, think focusing look

million point, our volume Given below it's at this units. X sales

that [ph] market looking at is XXX units we're not the market probably product for still will pay RMB above that least about at entire You X,XXX, more.

addressable total is I still to for us So so the think attack. large market

contributions. gross point dollars this point, attribute small feel to no to actually profit that zero we of very R&D there product additional makes like So is spend

Jing Chang

it. Get Okay.

Yan Li

So the hopefully that address question.

Jing Chang

you your for answer. Thank

Operator

next [ph] CICC. proceed. Please the from of comes Our Xue question Deng

Unidentified Analyst

and I'm are there CICC, from Xue Hello. Deng questions. three

is overseas strategy to product your for you in question I'd And what's first what the use can you to you year is The Thank more the - Malaysia? will XXXX? the what's stores channel will know I'd channel And And you like reduce us? series Gova gross or in next with question your second second third the strategy the - Will the share question focus if this in do margin domestically? sales you. volume growth of channel is, have like on? know markets or e-scooters

Yan Li

Sure.

two, Fion gross address I'll question. let I'll first the start the So and then margin

the we and the market. sort what on at micro we're motorcycle the into the looking we overseas first, market again, mobility So of strategy, call market divested

Within XX,XXX our North units bread-and-butter the market, I is anywhere market, units point motorcycle about at to America between this market think which annually, Europe electric do motorcycles. we of and XX,XXX

So year, back but in earnings we they operator of this Last this depends internal the become stuff. mentioned haven't just I on because the was took right? zero. of they XX,XXX will orders back. a kind It's As they come that focused on sort year, raised it it the capital year, - units, - operation set sharing - fluctuate, all call

grow think the year. a market I market the overall United small. with then The for XXX,XXX will like At States units this market market and this Now it's is the continuously. probably electric motorcycle the market for point, Europe

small market, a it's percent. So overall, but think XX-something we own I like

continue to the actually market. we'll grow So with

motorcycle which electric really second its the stage market. very is the Southeast early still in Asia in Now market,

units. we grow double even just X,XXX Southeast still at to probably We Southeast X,XXX market. in by market, see do that Asia small Asia market. a we looking sales we're our It's doubling still So in

market. market electric still exploring motorcycles is I in issue too like the economics petrol. price motorcycle, still is - electric different swapping battery actually models think the compared we're with with solutions is expensive trying that The that

the So actually is cost difficult. upfront the for users

battery of the see sort cost So than we're actually lower consumers. on solutions working the the upfront with of partners there swapping for sort to a

the Thailand. also early of trials trials Singapore, already but in done So some in early

on just saying, online with year, volume, But able produce know, the kick-scooters. of people year, a in can is this see kick-scooter website hey, think this I first growth million this an that exploring. a we being mobility would even still which we a units. you probably product is been units. - first this name. annual you did we high-quality together, huge recognize XX,XXX we have micro - on I quarters, X market, those the like have about Amazon, We're entire market, the like year's very the volume added are on is sort Basically, achieve the that three So think strong brand next to we're Then something basis market us a which

sort we bench XX% offline. X of haven't are stores reason that really conducted very, the million All off-line small. The that actually historically, units sales And entered very the market of being yet. of were of

So those are some have takes made just a things actually we're time. working on, but which we significant progress, it

months to enter to actually store I of the takes be sales. make to offline it able to think and actually usually start chains, those any for X X

traction been is market, that's last - kick-scooter the X think the market. I e-bicycle is in the few which actually gaining it's - tractions years. So getting on And last the

name a actually market. have a So we in help that us next year, product will to out make which

expense, micro sales done a XX% sales expense. We you right now, see on of on because operating are high we're in high and I basically going on any traffic, name online, business can that top coming sales that lot enough That's think significant of sales a on gather purchasing offline, terms even questions similar the all the stuff. terms - has enough going that, interest to in market, online, on - to strategy then previous kick-scooter expense online, offline. actually took so think a adoptions of decline I mobility – stuff sales gather the user making we follow - a the see where of start sort the expense. And you the of become early the a unit with of

the overseas the So I for the market. target think - that's strategy yet. We sort don't of volume have

to target. for give volume call think this I to too early us its

about we in domestic China, so on channels stores channels. far in I think have right XXXX domestic the now

slow very because taking lithium think we're current the year expand shift, this the to the with think with especially went a market stores stage I I battery up. price

I us for of to now, our number growth. think sustain is the right stores enough

same-store XXXX. I for per think the merely sales improve focus in or sales store to is the

So XX% by to sales the gross XX% but improve per store really we're margin the take Fion sorry. part, more focused to at on expanding not stores, looking next year. let I'll

Fion Zhou

take third - margin accounting we of of question definition It's gross the when Yeah. the rephrase since rules gross margin statements. the series, our contained let account for Gova I'll to regarding financial our me all contains rate and and the the the also cost, bond the but to also discount, the sales only it the all sales logistics not the related expenses it expenses volume. selling base contains of

to So costs unit at the accounted that means sold. the the goods direct related and all the all will cost sales of expenses

of series and So the together, all to the gross counted margin.\ Gova our including we when the to above the models, entry expenses margin around cost margin our XX% gross all range XX%. this gross And the is premium is

margin when And XX% level improved, Gova level of that quarter, lowest our the So The volume. means entry competitors. improved of the above series. since the sales the gross see XX%, margin the will our average which gross the is our this cheapest product still contains or of level you of only mix our

of sure, weighted gross to Gova improve For the the average series will margin around XX%.

about everything is margin. address question. the will this this gross So hope Gova your series I

Unidentified Analyst

Thanks lot. a

Operator

questions no May time, you to the are Thank I the [Operator for call back there line. for the At further closing? from this the management Instructions] question. hand

Yan Li

look support. supporting for interest you and operator, on and appreciate your your forward quarter you, for our all progress. participating thank you today's again to and next Thank on right. We to All call

Operator

you, Thank for and your you call. participation. management. Ladies conference concludes Thank gentlemen, that today's

disconnect. may You now

Wendy Zhao	Senior IR Manager
Yan Li	Chief Executive Officer
Fion Zhou	Chief Financial Officer
Jing Chang	CICC

Niu Technologies (NIU) 21 Nov 222022 Q3 Earnings call transcript