Earnings call transcript Q4 2022

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Operator

Good day, and thank you for standing by. Welcome to Niu Technologies Fourth 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 Zhao, conference of Senior like speaker to Niu now Wendy today, Investor would hand over the your Technologies. I Relations Manager ahead. go Please

Wendy Zhao

and Thank website have XXXX. call soon. from The replay call call press today's website. a release, results you, This and Welcome is as on earnings the discuss the will financial our presentation spreadsheets Relations for of Niu webcast Technologies posted the company's operator. conference available quarter fourth well, corporate everyone. been IR Hello, being of to be to Investor

Please the XXXX. note today's discussion Private will the of contain forward-looking statements safe made provisions Securities under Act harbor Litigation Reform U.S. of

involve results statements The uncertainties, materially factors. expressed other company's may today. Forward-looking actual assumptions, different risks, and be from those

the company's any assume as statements, risk in and required included Securities the by regarding forward-looking public with to Commission. is The does the Exchange law. except update any factors information company filings obligation not Further

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

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

call the turn Yan. me to let Now, over

Yan Li

the Thank representing quarter volume you was for a XX.X%. call joining XXX,XXX year-over-year our total today. on everyone In fourth units, XXXX the us of sales decrease of

XX.X% market by year-over-year XXX,XXX units about decreased by XX,XXX and to in in sales XX.X% market sales the China Specifically, overseas drove the units. the to

for the sales [ph], XXX, a representing year a year-over-year billion] wrap of XX.X%. Total which been for the significant decrease year a X.XX was for units of entire challenges entire XXXX, revenue revenue decrease XX% year-over-year. in QX [RMB up XXX us. This volume [ph] results RMB Total [decrease/increase] was a million, XX.X%. total year XXX has of was The with financial

about QX headwinds COVID in XXXX. resurgence battery prices markets stemming and in in our from China dropped starting lithium-ion in China by units. sales face particularly, the Now, increase year-over-year the operations market uncertainties XXX,XXX to The the total from the XX%

Our RMB in total market the about dropped [ph] billion] to [about in XXXX. China revenue XX% X.XX

only the delayed the several R&D where to we’re peak to long also resurgence the lockdown launch center market several disrupt demand, Shanghai in unable month COVID due us products, is key the our XXXX The in not release key to causing until products located, sales period. miss of September but

lithium March for lithium-ion for impact battery from material But Apart down rate COVID [throughout] also XXXX, us battery since the used the disruptions, raw a lithium-ion lithium-ion penetration of [ph] the faced the on battery more had from hikes majority of significant our market. nearly slow hikes XX% the e-scooters the significantly we electric increase sharp a batteries. price since two-wheelers The had headwinds price experienced price China

gross a had to maintain and premium increase QX we optimize of product by our started healthy the X% To our portfolio XXXX. in XX% to price to margin, average towards product of

the QX a volume growth, and XXXX decreased to impact. quarter As XXXX in the result, XX% quarter year-over-year we of a year-over-year X, the X XX% the lithium due where have by sales for to achieved price QX except

more XXX,XXX XXX has in in kick sales scooter with year-over-year scooters, sectors, behind mobility growth to to type year-over-year a million. the the the for specifically remarkable XXXX significant in micro XX% increase in force a accounting than coming a international experienced our the The units units, main sales. search unit Now, about growth market XXX% revenue XXX,XXX was RMB driving to

market in was However, the The market of most of led XXXX. two-wheeler XX% the decline the market electric the XX% of of to a total XX,XXX in share sales due in share raise additional electric [indiscernible] not XX,XXX in two-wheeler a the which did decrease electric for of overseas. over to sales operators shutdown drop selling share to for the sales units, nearly loss a as sales in total capital two-wheeler mainly The accounted units drop in expansion.

sales our market battery XX% price lithium in motorcycles battery the market, the tubulars in us the the overseas market challenges selling like the increase rate lithium by had price also exchange The selling China impact from of increased coupled market [euro] faced Now, in rising increased previously. of Dollar the sold hike we average U.S. in the our consumer to particularly where of the [ph] Europe. to electric European our price that and price XX% with electric necessitated

market. has reflect lithium-ion shift [the [ph] battery products, penetration year, we the our prices in ion on impacts as lithium Now, significant the level uncompetitive this and operations. entry representing past motorcycle the XX% the reversed surge electric has they market and on] dynamics XXXX on negative China, in in sales render bicycle market volume in our In of

of international increase, in or XXXX. of electric be share that and we market adapt essentially shutdown market not market, our make that revenue. volume one-half the of sales tubular the recognize the We adjustments of temporary to the conditions one-third tubular both lithium-ion may battery than shift electric besides in to the start In zeroed change our to strategic more has the

quality and XXXX, long a sustainable resulting take but growth Those the short-term in in time some it would setbacks run. in create adjustment did

focus lithium-ion a the product XXXX, mainly advantage and focused In in development the product products premium Niu China XXXX. i.e. entry cost. market, lines, in lines on we the high-end market the to level have low we battery taking shifted First, to of product in [indiscernible] products our mass R&D

impact products gross lithium-ion price increased. negative revenue those search, battery a one-time contributed level although margin a on had the once it entry However,

to the drive well. shorter as Additional the and suffered recognitions due image customer brand range

to development us improve allowed to both and In low our mid-end [indiscernible] product introduced XXXX, [indiscernible] battery on asset at we graphite solutions electric pivoted premium motorcycles, We lines our product focus products. strategy cost. and further back for bicycles for which

and strengthen our was mid-end and that the position lines margins enabled our product improve product us brand from To [indiscernible], Our of lines at so SQi gain in highlight and XXXX, mention functionality I'd market. new sales prices. achieve in like practically product development the and to high-end the part high-end on volume far enabled the us affordable revolution achievements our UQi+ to mass to to the long-term our recognition combined market

with X X SQi material months in The the It X,XXX and motorcycle the market. the at debut for innovative RMB product technologies for customers by SQi deliveries. cutting high-end market our is was design to electric bicycle well plus most received like waiting edge boost [indiscernible] priced with

on our series. life U that capability been ready widespread has UQi+ brand testament XX,XXX nearly enhanced a new trends additional leadership launch media for generated at The garnered and The functionalities in to significant have popular XXXX. personalization new its product improved positive units all-time addition with is planned that the UQi+ has smart and to controls, designs, the ordered most is QX a and social attention since UQi+ newest alone. products more we our first creation with month reception in This exciting economics

a to over product the about series [VX] simplistic the style, Now, line, a GX bicycle XX% larger introduced is electric and It's were on a capacity, with light [VX] with it charge the XX% popular kilometer of [ph] upgrade we batteries. our design and large electric FX, asset is with released with in was [ph] and but battery XXXX. which GX and in on the motorcycle range factor. a form mid-end XXX XXXX graphite GX The design than single –XXXX XXXX.

XX% with peak lithium-ion was three the probably season, during by in also late quarter designed sales focusing those we in and missed Even our start September, by ASP exception quickly just to introduced though reclaim XXXX. the GX, of we're battery the cost which and the the margins. products hikes product more gradually the QX months mitigating XX% all end fourth than our newly on strategic work also of This to impact gross us This the the in launch. the products, introduced premium increase quarter-over-quarter helped represent adjustment of of

strategy the and pivoted investment continue the Now, premium also to a to fueled user introduction but also better us brand. This our focused help product to centric. UQi+, be get on enhancing new marketing by SQi ROI allowed our of marketing and product

XXXX, example surrounding products Just views in our across platforms. all the marketing the UQi+ of to X.X a campaign new SQi resulting the list launch of and in a billion few total of

events. We XX also what, innovative [ph] [a new to] a new plus influencers local mean, to program launched also user ambassador new core host strategy, I and were centric co-create with users marketing

ambassadors XXXX During Scooters demonstrated mobilized shows. World Cup. we seeing the Scooter from those customized new World and our for World painted elements [Indiscernible] the shows, Scooter Cup, Cup

in gain scooters demonstrated social X.X China's just a total platform across million weeks. Those views media two of

the beyond international our beyond years. the diversified European has the past expand our electric geographic that for strategy portfolio market, regions the main in two-wheelers product market been two Now,

new in the investment markets early This new strategy red market process. market success the partially electric offset improving products growth as in demonstrates over credit and line in new the has the share in XXXX in product upfront and two-wheeler the downturns new only the

$XXX. since portfolio expansion, mix of the and to achieved scooter with introduced in launched last category low-end awareness the our at strategically this mid in price priced we'll product gradually have $XXX the early start and On electric quarter and category enter in has from high-end in the XXXX and $XXX the ranging brand we market, the product product to XXXX kick with product establish We success $XXX scooters. and [indiscernible] kick

brand slow a by Award mobility Niu helped a was new initially entered Riders' company the ramp awarded the caused scooter building presented that the best up with Choice categories. the XXXX as strategy This in micro award.

KX as TechRadar] media some [indiscernible]. tech product such [Tom's of also received high-end the top [ph], from Guide, Our and the coverage outlets

a Amazon. sales focusing gradual channels, on with also of online category, launched In channel, terms scooter took like first kick we the approach

the in multiple offline kick due online primary Ready at towards sustainable on Best in Amazon Number in list XXXX though Number Our like solid second Prime the campaigns. and Europe Day models beyond. in the North momentum ranked growth and foundation channels, in XXXX the U.S. enter during to we half for believe [indiscernible] the from first, Amazon Buy countries America of scooter those We approach, with X, the network sales bestseller slow Europe to XXXX. X started and

Southeast Indonesia to grow stores Asian transition two-wheelers gas that regional high-growth with market Asian the effort our the to the in expansion the we market, hope as of continued spend the range wide those in network. traditional the from two-wheeler working partners number and opportunity we of with on Southeast local we fuel sales market, Now, in electric two-wheelers. a a we expanding sector, the in and In mainly part of trend Thailand, Asian in see Southeast market Nepal, the growth electric

be to effort scooters during GXX police transportation. by the the used Bali, Niu XXXX, product electric local In in to support government's to Indonesian Summit green national provided officials

a Now, sales as market electric year-over-year. result Southeast of from in the the efforts, nearly two-wheeler those XX% increased Asia

our of with promote to direction. marked the to living, in committed as customers We the smart we're vehicles in first in another environmental-friendly our impact year Lastly, advocate reduce to two-wheeler – of our sustainable that entire our dedication providing ESG XXXX also report industry development year. the help environment. released eco-friendly this

riding reached cumulative billion which the of vehicles. means a billion today, data kilograms of with reducing compared X carbon kilometers, few XX emissions, As

with to users spread our included trash new campaign a has take review, global in the been technology, a initiative positive its Guatemala. in green impact futures across launched Day [indiscernible] the further brand on four areas, idea journey campaign To like and up places since in the global during in at [ph] our The Sustainability XXXX. inception sustainability Earth we our we core building pride making sustainability which continents public [Bali] the users. of through of and Day cleanup, mobilizes clean including Earth a

with the to recover pre-price we QX to we is delay growth impact have confident a increase adjustment made to and our starting XXXX. the adjustment compared launches When due QX of and in XXXX to in sign into XXXX shows price we in QX. negative on Now that regain XXXX, XXXX impact XXXX are product still to QX behind basis, a strategic a positive in us, hope year-over-year a

believe with the China development XXXX product market. Now, to and we regain year growth the and are in sales for we place, the the able in whole marketing, branding as and overseas channel strategy both in expansion

on this with Now, the particularly continue leadership, mid-end drive X,XXX-plus to growth premium retail optimize segment efficiency drive new quality the the we'll our franchise improvement the products focused marketing in to same-store and the market, to growth in stores. product in China user-centric ROI

motorcycles, QX this from few new high-performance a covering Gova side, series, in China, starting motorcycles On focus for Those product plan we premium the a will battery, We product year. bicycles be from our product the on XXXX. key product have with China light battery products powertrain high-end series, lines premium on lithium XXXX, QX [FD] NCM platform to mid-end [ph] started they batteries. graphite will with electric schedule in those in and and led-acid released to lithium development

differentiated mobility, extend co-branding our Now, leading driven may product propositions, and and Niu continue also lifestyle. strategy, we urban to product as by on market brands the in focus the just with [philosophy] [ph] expand to unique a central for [indiscernible] beyond product. lifestyle brand company building similar Besides this our with we initiatives plan

[XXXX] Razer brands each XXXX, successfully designed partner, lifestyle In we and continue we model [ph]. with to in global with such and leading plan like Diesel product with co-branded launched collaborations success

same-store that XXXX, [pilot sufficient] crucial and have aftersales channel, sales [ph] drive services. driving stores sales test the recognize to on which launched as offline improvements focus a initiatives QX to in center Now we

the are from store, approach, and retail to experience able provide offline online. for users And stores. this supporting and our We sales number generated better after-sale our [indiscernible] for OXO we're our to with pre

project a create to materials standardize optimize and consistent, a high-quality each launched store also brand image. the and to store have marketing layout for We

will to growth. Additionally, in we help their traffic Those better and stores conversions. digitalization platforms, program aid resulting achieving have a initiatives product same-store and stores health potential X,XXX over showcase the

to two expansions. we'll effort significantly the will diversification last in start focused revenue and both diversification for both our and portfolio product strategy growth the with Now, in contribute in market, years the the process. international laser remain in geographic Those

offline, micro-mobility with a of both comprehensive the We'll has growth in establish Media with XXXX. category, channels portfolio like the XXXX and on a growth XXXX, in micro-mobility Markt. Buy partners sales retail it product First, Xx and the growth volume the been high and in building on near superfast segment Best with continue

also product With the comprehensive to options XXXX plan refreshing the layout enrich mix scooter keep kick product our XXXX, in product in users. our to we for offerings

launched over product, is the kick U.S. e-bike lightweight recently officially besides with BQi miles. our March Now first The with BQi swappable scooters, in maximum XXXX. market CX the a batteries two also riding of we XX CX two-battery to e-bike distance

Now, stores will [ph] the plan channels near with network Best [sold States the along with established CX up future. the online sold built last year, within] the the the Canada XXX-plus in sales be Buy be we and United BQi in in to

having foundation micro-mobility and confident Now profit. XXXX in both and and substantial in accelerated XXXX, will invested three to the since the in growth product building building, market the brand the revenue last in are we that contributions will lay make in portfolio channel both out drive years

market we Now setback, of a in the the had electric due operation share categories, to shutdown in XXXX. two-wheeler

expansion on be expect expansion. to We XXXX and through path again fast the growth product in geographic

in order all do hyper products plan to motorcycle, On the side, in electric compete RCi product offerings, new Europe. capturing we growth the quite in as electric the demand to such product the performance two-wheeler

Indonesia, Southeast [ph] countries underway, annually. market trials and up which expect [petrol] geographic this launch partnering swapping we we the solutions Thailand. motorcycle Asian Asia, the growth several XX Those than in XXXX, already expansion key by like batter more plan will to build on in the we million hosted Southeast sales in finally to for are us, On operators have with the products open enabled the achieved and

market, XXXX. to million XXXX, are million total expect Now, growth, compared a for volume strategies sales units China those to our X.X in as and representing XX% to with X implementing grow XX% we to both growth international we

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

Fion Zhou

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

if are our quarter As otherwise, performance, unless monetary to fourth all review the specified. referring in say I figures are financial RMB, we figures the I and not

we just Yan XXXX. in mentioned, multiple facing have challenges As been

to for was fourth total volume period sales by last units, decreased of quarter year. Our the XX%, XXX,XXX the same compared

and was scooters, managed year-over-year XX% overseas to growth market a volume units, the up market, XX,XXX units. maintain speaking, XX,XXX was units. volume the decent market In kick we Specifically sales to overseas XXX,XXX China for

the units including For and units, total the markets. XXX,XXX China volume from was XXX,XXX XXX,XXX sales market full-year XXXX, overseas from units

China a from and volume as market series, dropped sales Although by XX% decreased whole premium year-over-year by and Gova together, Niu only XX%.

scooter as mentioned. market and of [to e-moped sales units increasing to to XXX,XXX showed just overseas The aggregate be Yan the the in kick orders, due growth momentum mainly to around volume sales decreased sharing] the termination [ph] strong XX%, by due up

The million, RMB raging, China XX% RMB by the to To XXX segments. premium scooter to total decreased only The the fourth execute were compared in volume break strategy was quarter year. X% quarter. XX% period revenues by Gova began since in by to down scooter the we last a refocus million, took revenues on total same the revenue the the from entry of markets fourth domestic and series XXX down the mid-end

ASP scooter a a result, XX year-over-year the were e-motorcycles due overseas by [ph] reached Blended year-over-year was The basis. with China scooters, contribution scooter revenues, higher a [RMB decreased one-fourth XXX,XXX] higher million. lower X,XXX, on to ASP As RMB and sales market overseas of including ASP. RMB in kick e-moped scooter kick of market

the Series Accessories, services than high-end the priced year-over-year reduction of scooter's XX%, However, kick shared the sales from by pack KX and XX% parts US$XXX to due like proportion RMB battery spare at due decreased XX%; to kick scooters to mobility US$XXX. million, XX ASP quarter-over-quarter, were increased higher the operators. more revenue overseas

to total whole, a saw The sales by China XX% scooter billion. – total year-over-year RMB our XX.X% XXXX, as decline. X.X full-year For the revenue, decreased revenue

by by total products scooter RMB the increased scooters, including revenue, services XXX to international XX.X% due spare to to X%. accessories, scooters. the international the XX% only However, of fast and growth million. the dropped contributed The And revenues mid- total revenue, of to-high-end parts, kick

mix at year in among better The XXXX. scooter scooters [branded] a look increase. price domestic X,XXX to X,XXX, ASP kick XXx. of the overall a the rest is ASP International X.X% X,XXX, is [ph] the to to due proportion [ph] last XX% scooter increase, product versus up] was quarter which a and X,XXX is Let's The premium decrease due increase. since the [went X,XXX, ASP the compared ASP versus the half

e-motorcycles scooter's XX% the XX%, and both kick ASP respectively. and and While increased ASP

The gross the for same [ph] fourth ppt] [X.X higher a and ppt] than of the XX.X%, margin quarter [ph] year lower was than last [X.X quarter. the previous period

the For XX, XXXX, Chinese XX.X% to XX.X%, the and the hikes battery while cost compared up sales the December market The margin on was year gross margin product basis. kick dragged X.X by an by annual down brought better the [ph]. ppt] in the gross scooters of contribution ppt, [X ended margin mix higher gross

Specifically, by the China [ph]. increased [X.X margin markets from gross ppt]

quarter higher higher of The OpEx level. a selling percentage of and as Talking at the million XXX while operating to the was the OpEx RMB million, were expenses than a X OpEx to revenue RMB rose about X base. period expenses. mainly million, stay due last almost year-over-year. And same same million XX% XXX The fourth XX%, revenue RMB amount lower the marketing year, from RMB

a million. expand to overseas while the million increased increase, by XX new footprint environment. we domestic selling by stores scooter expenses conservative decreased RMB we of X retail and our sales, continue the X fuel under amortization since volatile were expense expenses growth to of Out as XX.X The of that took position depreciation million RMB promotion kick million

of G&A year-over-year, million, outsourcing X credit of X million in the development XX caused of than to expenses million, mainly decrease by mainly loss, by increase the fee were for million. offset and X fourth XX professional million Research RMB a financial RMB RMB service quarter an million higher RMB due provision in And XXXX, expenses lower fees. RMB RMB decrease XX were

higher and depreciation domestic business kick full-year XXXX RMB for and the million XX out RMB XXXX, RMB the XXX stocking, for XXXX, OpEx in credit million And warehouse trafficking, R&D due the expenses XXXX. loss, by million, XX than kick store scooters particularly XX selling scooters like impact increased For overseas million insurance, was million, mainly marketing RMB increased increase increase new scooters, XXX promotions. the online expansion, ongoing offsetting RMB the new in million, XX XX was RMB rolling by million cetera, product and decrease and et expenses from to

XXX million, of the under a expenses, previous period of of XX.X% RMB XX measure, million, net year. income operating X.X% had to And from RMB an fourth excluding XX.X% XXXX. XX.X in period net this year to had margin compared the income million calls. quarter, in revenue, our representing for compared expenses same for net tax XX non-GAAP RMB a of compared of of benefit income The the million we with last quarter, negative tax stated in share-based to And same net margin compensation, million a GAAP we RMB with XX were loss RMB the X.X% the last

expenses, factors, a On the lower-than-expected battery positive full-year increasing in the business XXXX. share-based mentioned margin we income had and sales, of basis RMB cost with RMB X.X overseas but negative due domestic loss compensation X.X%, we as deliver net still XX expansion, net excluding a net to million a million of above, pressure including

and to restricted cash, ended We our balance sheet short-term the in deposits flow. year RMB cash, billion with And term X.X investments. turning cash and

international for RMB XXX mainly payable due to warehouses million, in used as reduction was was million orders. the of cash responding operating On for RMB outflow, quickly in suppliers basis, QX cash the result XXX operating full-year to a flow partially net kick to incoming in inventory scooters activities seasonality. increase an due at Our to

in expansion compared continuing CapEx performance RMB our XX a basis, million. XXX strategy to to million, to was XXX down the million And fast slow RMB store was from QX full-year on channel RMB improvements. Our CapEx market China as shifting

on XXX we volatile let's decrease to of range strategy turn premium revenue markets, in the focused guidance. domestic representing first mid-end RMB expected and market our and RMB the a million now be of quarter to of is to Please relating as to million, on aware XXX information be In-light change reflects the and preliminary current that to available and based year-over-year. XX% XX% which the is of date due the company's various to factors. to expectations, this outlook uncertainties subject And

the now any questions for let's you that, Operator, With have call that may ahead. please us. open go for

Operator

Thank you. ahead. [Operator comes Instructions] from Chen] of Our the [ph] question CICC. line go first from Please [YaTing

Your line is open.

Unidentified Analyst

I'm [ph] and I two questions. [YaTing] have Hi. from CICC

could first is plan channel The is, my channel expectations the in you introduce first your ratio for do please feel your XXXX? is And one of expansion impact on on how in what you question. XXXX? And This marketing and this about expansion expenses? selling

Yan Li

also more. Okay. a bit channel and Maybe add then And I'll I mention marketing part ask address Fion I'll expense. the think the expansion to

XXXX, at parts. we look think I two

in China take we a like we it's expand XXXX of did but still what the couple significantly, years we moderate On bit, last in a I approach market do more side, where or the think not to little XXXX. expect

is focus for really the the to think improve I China same-store sales.

be think that still optimization have some in the currently, had stores are think to and are the there we need expand, stores more having growth. there more counts, regions may feel need we of regions actually are regions like some I to terms we that I than think I we we needed, that. in we there where to and actually store stores is there sufficient optimizations support absolute – said about But X,XXX is China that, what sales sufficient where that

U.S. to the of the more expand for be European in with the channel sort focus most, those both channels that's scooters we're for Now, Southeast market, and entered the Asia already the and international footprint part, on I are think offline e-bikes. where the market market, going our the And kick U.S. European would about market. expansions on the and the the

Buy, in a For in both Best example, scooter, stores. display were stores. XXX kick XXX shelf now we the with about And we with have

the our in and – to with Southeast – talking into network scooters actually traditional dealers. get Asia, it's working dealer So with the

is this on channel part. think actually I the

question your expense. about think the sales, I next is marketing

I think the Difficulty] think at – [Technical there's compared spend plan we I sales Speakers] marketing and sales [Multiple on definitely look expense if the to marketing that we percentage a overall and year-over-year,

Fion Zhou

I'll take it's marketing think my side. I'll is I question year. and expenses Actually, selling ratio my a Yes, from the special Yes. take Fion. side. in from This this XXXX,

As the from XX% percentage of marketing shifting percentage a high domestic was to as expenses from selling, that QX revenue, marketing only we're QX. strategy late and up and of considering – revenue, almost

While in the meantime, for kick the continuing XXXX. we expansion kept in of scooters footstep the the

So XX% results that we got of around selling and expenses. marketing the

If [ph] at our only retail in revenue the XXXX, expenses in and we're of also [e-cycle] a as selling percentage the was the look we expansion the we marketing – traditional market XXXX, in X%. and international ratio e-moped balancing only and And in business domestic the market.

level expansion it marketing in year. also that, products this is scooters expected the I in as rolling XXXX, at and international out same marketing ratio stay will and same we to kick XX% in So continuing and think at around And level at our XXXX. the target, overall balancing X% expenses we domestic expect the with the selling selling ratio new the in XXXX, the ideal expenses

Unidentified Analyst

decrease question share you've Okay, store trying And are improve my my performance. clear. as of to the to is store, that's benchmark if second more very the could is, decide question. improve Yes, store For And you you And the its what will mentioned, we example, China we profit? with is how please performance? it?

Yan Li

– sorry, repeat you the the what of benchmark what? Can is

Unidentified Analyst

[to more opening your the decision is channel to benchmark [ph]? of just or What close it] one

Yan Li

Right.

answer I – me let think the so second one first.

all are our I self-profitable stores because are think the whether the stores. one easy, franchise second actually stores is

keep not it's difficult to profitable, be to store But year, actually tend owners profitable. So, in are monthly open. the profitable stores the the not then throughout profitable, These even keep the it's stores store reality, if may they year, the basis, are entire store the for open. a not

– that's so city regional this will at we think we I look city, at by it's look and basis. – be –

is, stores. One are the do I more terms traffic of the think how things to sales two improvement, store there in at. looking really Now, we get we're

year, So JD this stores what generated little actually actually, from Tmall. this year, mentioned, we as and really, sales but leads started planning with online last we're year, bit basically providing is a is we

our So, XX% basically purchase year, to can leads. sales offline at year, Last XX% store. pick-up from online roughly it represents make online scooter And our the an we that our Basically, only users decide coming to the online, to or so OXO sales. boost XX% the than call of about this what method. to looking we're and sales less the of

actually stores. be increased to traffic that So will the

think actually we're list to the a in second is the stores initiatives that I of rate. conversion help implementing

the increase the the purchase. portfolios things because store traffic will we in traffic, cities. recognize the be how about to product you regions, once also and do different layout Those optimize the it's stores different you So, convert like

product extensive some have actually sells product We portfolio, but in better some regions.

the to to communicate coming was buy. such optimizes potential the carries there sure when product or the portfolios to clear And that that is message easy staff, customers store. need a store we users make come to customers the in the there their in store So, trainings and to clear what

[ph]. sales sales of think also and a are I – the percentage great profit] it's the lastly, accessory actually [store And store recognize we

tons the they I make to like the store there’s particular of which additional actually scooters, – that the customizations, call profit. for with our be can can sell for can besides think such product, really assessors UQi, accessories product selling developed

But the are think things said I what the three theme, underlying be is and that's three there – think attractive having product that, the an is things taking. we're really to competitive. has itself which I

new bunch year. this what new online, this to have second actually second products is I in starting we of ready confident the or So, a our is roll-out we quarter quarter think very having the this year product feel

that demonstrated helps – have we product And quarter fourth last received newly help sales with positive really actually quarter, news year, Once performance. the out, last we boost well, is the the store also it improve new the we and the Hopefully answers product. from question. have defined all

Unidentified Analyst

very all my Okay. Thank much. you That’s questions.

Operator

our question. Please on you. We'll move to now Thank next standby.

from ahead. from question next go [Xinchi of CITIC. Please Our [ph] comes line the Yin]

Your line is open.

Unidentified Analyst

it from product have you [indiscernible] the some first, questions. at indeed see Securities. looking would that the year, in wonder positioning because how – position my question. sales can demand pressure, And our the in CITIC the past but to I’m commuting Fion. first will industry. Yan I'm focus is faced two here's And the and epidemic of the the like growth has last resumption stimulated about situation after I line I I know two future? This near months, the we of the product seems of our

reductions, we also impact could respectively? show of change see your and sodium second how product, question, if our also our you better we battery as the it such financial insights, lithium-ion And on some wonder evaluate and batteries could price could I do upstream performance, be

Yan Li

Yes.

those. me to great let so address try – think I Those are questions.

on positioning. product First, the

the case. basically always the market. been offerings our from the I product And has think I think been mid-end premium-end has the to of always that

product, entry-level that gross lithium roughly Now, happened for margin mid-end that which actually and our the impossible made competitive mid-end our price with and market the of make. the it – level to product that really, at XXXX, level, view, below [indiscernible] point just the increase the series, which or priced slightly is battery in issue

So, well. the on volume as pressure revenue sales the on that's actually created

into I mid-end premium to this this new focus in heading So bringing think, product we're on going one, year, market. and the

we introduce really battery but product scooter solutions acid led-acid of last the year, starting to we the have yet. don't increase, led-acid – on to a we graphite Second, battery price enough graphite on offset started half lithium – the second

hike out more supporting in to solutions us that the have coming competitiveness battery we the help offset product the price market. mid-end product acid can regain lithium-ion So, that the graphite

So, that's positioning. the think on I product

that basically price. has lithium – did for also the we batteries battery The pressure upstream price on then lithium to the downward down. And come observed there's has has we recently, observe coming a down also the material triggered the price cell, second, that the down

majority margin I as the volume we sales because were our that will were [positive of lithium position sales we coming well a lithium. really, down were from plus] think price – or think, and the a significant having as I [ph] be well in our to

And lithium far, will lithium down will said company Hopefully, I gross our price impact it internal help our come us if price so our down, questions. addressed taken having our means the the down pricing margin, the But in did I've think, that yet. the benefit as that, coming when price of sales. we that actually product of into both most. consideration most. the will well regain significantly, significantly, the basically and improve as terms outlooks more lithium coming to So, we But budget, really increased got we XXXX, we financial when haven't

Unidentified Analyst

our game. noted forward Hopefully looking to Well, understood. – to you. Thank Yes. and rather back

Yan Li

Thank you.

Operator

to question. now you. Thank We'll next our move on

comes from Our Ma Alice UBS. ahead. line of go from Please question next the

open. line Your is

Alice Ma

and our have one actually. market market. taking two regarding the is other regarding is for overseas Thanks questions. One the questions domestic the I

question And terms to of one, market – markets, these the benefit mid year the think I consensus, means view after for do a days? will that you in they is, grow the of is which towards believe the will premium growth, that year? For two-wheeler from will, reopening recovered my what XX% volume market to in this electric that China. the terms in growth the But expect consumers premium like sector first or of of achieve power to consumption that the you higher-than-average the most overall your this around mid the this company do it electric of that domestically trend? actually think premium by

how mentioned product that the market you view you potential? really overseas is And plans market. the just I'm view your I'm Thailand Thank into you. competitiveness Indonesia you the question your about into do now. the about like expansion And wondering, how in market? other the or this curious specific do market,

Yan Li

Yes.

with first the market let So, address medium one. one – mid-to-premium the me

my optimistic par. don't of slower So, in would grow average. is, the faster or would on I it of either I will It actually this it kind – like think medium in less than slightly market, the one imagine a slower. grow grow that terms think market premium I to will think I view sense on the maybe just

competition, China, major competitors X,XXX demand price being year, issue this in observed already industry and growth are looking a our this doing at QX in The slashing of entry-level of through which when actually basically prices market a growth, that less. RMB lot we entire lot product or players basically on around consumer most you're

to competition – really So the basically that been slashing the price sort case industry. and shooting drive of price actually volume, that for this for that has always

actually, growth. some So, think that's time, fuel the I to market

units went segment. to year units all the entry of of [ph] mid-to-premium had before, right? at about said think So lot faster up, mid-to-premium don't market market, pricing but we this doesn't the we it our actually it's we did is because than I – look grow from – XXX,XXX the drop And doesn't about and units. but – [XXX-something-thousand] lithium of think our of increase average that did the right? – a same view, room having in we about to was market, it year, gain last auto that mean still that, for market, some if I The the of point will XXX,XXX you market, only product, still Because that us price And exist.

million exist in least market the still this at units think market – of is terms X market – plus. I mid-to-premium

like to part at X I us, million million million least, to X So, X the least premium at think, premium, and and basically to mid-end units. for the X mid like million,

percentage. units So were us, for only last small still year's XXX,XXX

but we have but like fast the that it know we as have design focused a product, market competitive be a competitive price overall grows, less So, has about concerned more can to But how great can we're product. on whether we market well. in

question. I think that first addressed your

your the market, Southeast think I I on on recall second clearly. repeat Asia you can which question didn't down

Alice Ma

Thailand or about the entrance you. question Okay. My second Thank of the market. Indonesia

mentioned will into this the for wondering I market your with the do how the And swap battery local the your how Thank advantage I'm leverage you You. introduction you – that see product do you in partners And think Southeast that market? mentioned competitiveness? in view potential You market. you like Asia

Yan Li

Yes. Thanks.

about So, basis, I And million Indonesia for view, million XX or past, electric annual to was of point X for what's there it's that at I or is the think think South was talking about market, consumer on think – – or do Thailand, been right? happening petrol at think, and electric motorcycles too I market in moped of is for I basically Malaysia, least million everything. price that an – market. million It's they scooters pricey units a from years. Asian The few about – entire so the huge. petrol XX motorcycles least XX market we've for

year. were there gain units. an XX% So, But less about last We it's able – difficult than talking to entry is about point. we're growth XX,XXX to numbers, still, find small

actually rental there sort think different are there are it. I buying battery. is One solutions the the battery solutions of looking lease where people the or So, scooters, into two battery – solution or but swapping rental battery

So the as battery fee cost. opposed cost actually, booking monthly to on a upfront

lower also will speculation There subsidies. on help we're so upfront cost. government are that second to So, the potential –

of kind of just motorcycles. Asian even think like the you here, units India markets, market, petrol about XX bigger where an Southeast I million example they're give to the Indian market.

Indian is was market years electric annually, from, they It's units $XXX the the X year, The Southeast with grow XXX,XXX units two-wheelers in similar very the had electric to than to Southeastern India and Indian minimal. Their is XXX,XXX, about market, of is able motorcycles. subsidies, government about But in market subsidy market about or where pricing less $XXX. electric very last market. Asia but right two-wheelers the XXX,XXX last a now,

we've couple of So, market. years if at multiple to least to have the two think potential think that we do see been actually to we market, for the next India the years. a size Southeast you of planning grow – And markets, the there in those compare do Asia

there. some able capture So, this think do is we that market growth potential we're years of in the next actually – the to of high is couple the

Alice Ma

Thank clear. some that wish you. years. Thank the we [break-throughs] also Okay. following you. have Very And in [ph]

Yan Li

you. Thank

Operator

question. We'll Thank next on our you. move to now

Please Our line next [ph] go from the Credit [Scarlett question of Kannegieter] Suisse. ahead. comes from

is line Your open.

Unidentified Analyst

Thank you one I question. taking my question. have

the they to guess entrants, makers how who Hyundai and RMB motorcycle launched the I you overlap For RMB from transfer new competition price with electrified for those all is products entrants to potential products. are field? between there have some brands new to range X,XXX example, and [indiscernible], view motorcycle price from X,XXX. traditional ICE the are So, some do the trying example, landscape or new

how product terms do you. brands those in difference of – of you some sales or between those channels in other Thank the products or So, view aspects? new with and terms

Yan Li

Yes.

So brands units units million Scarlet, million I think in, think a I – But such coming account market market. China brands. markets say, big it's for is XX huge is year, a a XX that more a I year, to with us, are that's million market, still may it's XX more able – think some a still It's first, year.

our actually it's because about like, X perspective, that perspective even a X% the only in what, from worry – of from less units do it's market. So, we China, it's million

So it's come in. – we brands more concern when have less

premium similar – Zoomer, I forgot it's the the two year models And petrol the three – that the I ones, other did or actually but what's brands raise I would our be coming well-known either like industry. more like electric. position leveraging those like the product, actually, brand like, they buzz – it actually which models, I products models think, like a think, to really made their, quite it or a not Honda be with think I right one about a will are the related their think actually last buzz one in

more market. with to come better you push will reality, pressure be competition So, push as Honda's create the models just market product brand, I with product. a of in that think, competition will lightly. competitive the we in don't this as that and the us legacy sort We for premium recognize, as in recognition or take with well and with think And those people us it more especially really the

assume I se. – market think per on your China is the question I

Unidentified Analyst

Yes. Thank you very much.

Operator

Thank no this further you. at There are questions time.

you. hand I'll back conference So, the to

Yan Li

right. All

thank your our and progress. questions, thank no and to there's next and today's all participating to again for you you, support. you quarter appreciate operator, on if Operator? So, forward on We reporting interest for your call look

Operator

conference today's call. Thank concludes participating. This for you. you Thank

now disconnect. may You

Niu Technologies (NIU) 20 Mar 232022 Q4 Earnings call transcript