小牛電動 (NIU) 2025 Q3 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Niu Technologies third quarter 2025 earnings conference call. (Operator Instructions) As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

Now I will turn the call over to Ms. Kristal Li, Investor Relations Manager of Niu Technologies. Ms. Li, please go ahead.

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the third quarter 2025 The earnings press release, corporate presentation and financial spreadsheets have been posted on our Investor Relations website. This call is being webcast from company's IR site as well, and a replay of the call will be available soon.

Please note, today's discussion will contain forward-looking statements made under the safe harbor provision of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks uncertainties, assumptions and other factors.

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

Our earnings press release and this call include discussions of certain non-GAAP financial measures. The press release and a definition of non-GAAP financial measures and the repudiation of GAAP to non-GAAP financial results. On the call with me today are our CEO, Dr. Yan Li; and CFO, Ms. Wenjuan Zhou.

Now let me turn the call over to CEO, Yan.

Thank you, Kristal. Hello, everyone. Thank you for joining us today. In Q3, we delivered solid and sustained progress across all key strategic priorities supported by disciplined execution in product innovation, channel expansion and the brand elevation. Our results reflect the continued growth of our core China business and early since transition in our overseas operations. laying a strong foundation for the next phase of growth.

For the third quarter of 2025, the total sales volume reached 465,000 units, representing a strong 49.1% year-over-year increase. This growth was driven primarily by exceptional performance in China, where sales rose to 451,000 units, up 74% year over year, supported by our strength in the product portfolio and effective channel expansion.

Overseas volume reached 14,000 units declining year over year mainly due to weakness in micro mobility sector. Our total revenue grew 65% year over year to RMB1.69 billion, accompanied by a gross margin expansion to 21.8%, up 8.0 percentage points from the prior year. or 1.7 percentage points accretion. This improvement was driven by a favorable shift in the China product mix with increased contribution from higher-value models.

Notably, sales of models priced above RMB8,000 accounted for over 10% of China sales. Net profit for the quarter was RMB81.69 million excluding the profitability momentum we established in Q2. This improvement reflects scale efficiencies from higher volumes and our continued focus on operational excellence. Those results underscore our ability to execute with discipline and resilience amid evolving market dynamics.

We remain confident in our long-term strategy and migrate achieved this quarter provides a strong foundation for sustainable growth. China remains our primary growth engine in Q3, with unit sales rising 74% year over year to 451,000 units.

A key driver was the China inventory buildup ahead of the implementation of the new national standard for electric bicycles which provides a substantial short-term boost. This performance was also supported by successful product launches, strong brand-driven demand and steady channel expansion.

The momentum builds through 2024 and into 2025 reflects our refined strategy. It has competitiveness and growing consumer preference for you. In Q3, the China electric bicycle market entered a critical transition phase and is the new national standard while production of noncompliant models ceased after August 31, and retail sales of existing inventories are permitted until November 30, 2025.

This prompt the distributors and retailers to build inventories in July and August effectively pulling forward demand from October and November and created a temporary sales force in Q3. Now to prepare for this regulatory shift, we emphasize on three actions upgrading the existing high-end electric bicycle models to capture the short-term demand, building on the new electric motorcycles unaffected by this regulation to target lower-tier cities and redesigning and returning our entire electric bicycle lineup to fully comply with the new standards for the Q4 2025 and Q1 2026.

First, to Carter's premium electric bicycle demand search under the old standard, we launched the upgraded flagship models next Auto 2025 and FXT auto 2025 version, each priced at RMB11,900. Next the auto 2025 introduced 10 major upgrades with 77% of core complements redesigned to elevate benchmark standards across power intelligence.

The FX, the auto 2025 featured a futurist performance-driven designs on the staining technology platform as the MXT ultra equipped with automotive-grade and millimeter wave radar and do channel ABS, that is a new benchmark for the segment. Together, those auto models contributed 8% of total Q3 sales, effectively serving high-end demand during this regulatory foundation.

Like motorcycles are more prevalent in the lower tier cities, Tier 3 and below due to a more relaxed regulations. This segment has history underserving our portfolio in the China footprint making it a key growth priority for us. As highlighted in the previous earnings call, expanding presence in the lower-tier cities is the core strategy reflected in our store expansion strengthen product line.

In Q2, we completed a full N-Series motorcycle portfolio covering mainstream price points from entry level 3,000 bond at RMB4,000 and RMB6,000 to the performance oriented had just under RMB10 starting Q3, we extended the strategy to F-Series broaden the price band and enhance the performance to value offers.

Now despite Q3 being a channel stocking period focused on electric bicycles are intense motorcycle portfolio supported a healthy 14% revenue contribution from motorcycle sales. We expect this year to increase in the coming quarters. A key milestone in Q3 was a successful launch of FX windstorm version on September 28.

Known for sharp distinctive styling that resonates strongly with GMV writers. The FX wind storm reinforced actors positioning at the performance powerhouse.

Priced at RMB4,799 a target RMB4,000 segments at its high first high-speed motorcycle for the young riders, equipped with 3,000 mass motor reinforced framed by the full-size FT display and 4% debates, a delivered performance comparable to model price above RMB10,000 and including 80-mile 80-kilometer power top speed and 0 to 50-kilometer power in 4.7 seconds.

The FX will strong was an instant success with 14,000 units sold in the first five hours and January RMB68 million in GMV and runs number one nonpoint.com and using and popularity. This success validates our strategic expansion into the electric motorcycles and create strong momentum for upcoming launches such as FS targeting the entry-level users.

Now alongside the high-end electric bicycle motorcycles, we dedicated significant R&D resources to the new standard compliant electric bicycles. -- the updated regulations require substantial redesign from the limited usage of plastics to form factors. We're now planning a full rollout of compliant products between late November and extending through Q1 2026.

The portfolio will include the renewed and new series offerings and also introduce new series designed to reach further consumer segments, including products optimized for female writers. Beyond the new product development, we continue to invest in core technologies, including the smart writing system, powerful innovation and R&D platformization to enhance efficiency and capabilities.

Our smart writing and the AI effort focused on three areas: expanding the foundation of safety technologies, such as ABS and into radar, developing assisted writing features for premium models such as the (inaudible) and building intelligent ecosystem to product third-party integrations through partnership with Apple and Opel with other industry leaders.

We expanded the cross device connectivity, including off-site SIFI alert and up wallet access, enhancing all our user experience. In the power tree system with advanced next-generation initiatives through a deeper mode controller R&D and the close collaboration with our battery partners.

Our efforts focused on two key objectives: delivering higher peak current outlook for stronger acceleration and the fine to oral system efficiency to extend the role driving range under the diverse commissions. The TSX Ultra and FX Boston are the stronger than polos R&D (inaudible)

The enhanced particitecture unable to 25 products that are issuing is 1.92 seconds, setting a new benchmark for urban performance for the FX into last week 3-kilowatt high-efficiency motor and optimized controllers, deliver top speed of 80-kilometer power while maintaining stable power delivery improved thermal performance and consistent power up even during the extended high-speed.

Those advancements not only elevate writing performance but also the foundation for the new generation of new powertrain platform that will still across a few chillies. Now lastly, our product R&D strategy continues to deliver a meaningful operational benefit. In Q3, it accelerated product iteration, strength and manufacturing consistency and increased economy of scale.

The improvements supported a smooth (inaudible) of 450,000 units, surpassing our preset roughly about 20%, while enhancing margins to share components and module design costs. Now in Q3, we continued elevating the new brand and deepen engagement with our core audiences, particularly in premium customers and GMV riders, our approach integrated lifestyle campaign an product launches and target digital engagement to strengthen brand equity and drive comparison.

We act as a series of use focus lifestyle campaigns, the summer right and campaign embedded into the outdoor leisure scenes such as lake diving and quick hiking across major cities generate 130 million impressions across online offline channels.

Following the FX windstorm launch, we host large steel test rate events in term and (inaudible) engaged riders in real mounted environment. This created authentic word of mouth within the key signal to provide valuable feedback. Our launch bank continue to highlight new technology leadership.

The June '17 do Ultra flagship launch center about 20,000 units five hours to the CMV exceeding RMB228 million. the FX Windstorm launch deliver 14,000 units sold in tryout 93% past ratings, resolutely strong with the Gen V and delivery writers.

Now strengthen both our offline online channels as of Q3 new surpassed 4,500 stores nationwide with 238 net new stores added in Q3 and year to date. Nearly half of new stores were in the lower-tier cities, supporting deeper market penetration.

Our digital ecosystem also scale rapidly, you now manage nine official factor accounts supported by 1,050 miles operated accounts in Q3, the net will generate plus 30,000 plus live streams, 69,000 content pieces and RMB740 million pressure the online sales representing close to 70% of our total word.

We also expanded on to a new e-commerce platform on (inaudible) piloted with 10% store RMB40 million to 50 million in monthly sales. We plan to expand store coverage and moderator snacks on price local services over 2,200 stores have joined and FX windstorm ABS long to run number two nationally to force brand resonance among generally riders in the lower tier market.

Now turning to overseas market. Q3 unfolded as expected, a transitional quarter as we continue to optimize operation and preparing for our next growth cycle. The overseas sales volume reached units with decline in micro mobility, offset by encouraging progress in the electro motorcycle.

Despite Q3 being a seasonal low for European tower demand, our electro motorcycle sales reached approximately 2,500 units, up 160% year over year. The self-operated sales accounted for 76% of total we further accelerate our self-operated dealer network expansion, dealers in those direct distributor regions grow from 120 at the start of the year to 29% in Q3, exceeding our initial target of 50 million.

This reflects the strong brand recognition product competitiveness and the growth growing retailer confidence in direct distribution market. With channel foundations now established, we will fit from capability building towards product real and deeper channel market penetration.

The product lineup and bid act position us strongly for multiyear growth. At (inaudible) largest two-wheeler show in (inaudible), we showcased our international product road map, expanding from smart executors to broader electric mobility portfolios.

Highlights included 2026, the all-new QIX Series with Google Map integration featuring 135-kilometer power NQS1000 launched in Q3 2026, the own new FTI experience for city commuters in LE and LTE version for Q3 2026, expanded ex QSC, including the 10-kilometer per hour ex-503vesi for second half of 2026.

And lastly, the concept 06 forward-looking 55-meter power platform patient intelligence other than safety. The news NTI-500 was awarded top of our 2025 by German leading motorcycle media outlet. 1,000, a strong validation of our product excellence.

Micro mobility will reach to 11,900 units, down 77% year over year, reflecting market headwinds in the US and Europe and Asia. Europe saw intensified the price competition while the US shifted towards a lower price model due to tariff dynamics. In Q3, we intentionally reduced promotion as shipment to avoid or stocking and protect margin during the period of pricing pressure on supply chain transition.

Given the current inventory levels in Europe and the US, we expect the structure structural adjustment continue for the next couple of quarters. Now look ahead, we'll continue executing our strategy of driving fast growth in the China market and scaling our international electric tw0-wheeler business was strategically a general micro mobility operation.

We expect China to remain our primary growth driver of strong execution across the for quarters were breakout product each demonstrating our capability in product definition, channel activation and brand influence. However, we back some uncertainty and softening in Q4 this year due to the timing of the new standard implementation.

The retailers are preloaded inventory in Q3, shifting some demand from Q4. A new standard compliant product will ramp up from late November to a Q1 2026 shifting part of the Q4 demand into Q1 2026. Combined, those factors will likely result in a relative flat year-over-year volume in Q4.

We expect growth to reaccelerate in Q1 2026 as the regulatory transition completed and the market stabilized. The fourth new standard electric bikes along with 300 to 400 new stores additions in Q4 will support a strong momentum into 2026. Now turning on to the overseas market.

For elect two wheelers, we expect strong year-over-year growth in Q4, supported by ongoing expansion of direct distributed network. The new product introduced at will fill the multiyear growth starting in 2026.

In micromobility, we'll continue prioritizing profitability over SACCI, releasing promotions that focus on clearing existing inventories. This will lead a lower Q4. We expect to -- the adjustment to come coin first half of 2026, with the margin return to the normal level second half of 2026.

Now with that, let me turn the call to Fion.

Thank you, Yan, and hello, everyone. Please note that our press release contains all the figures and comparisons and we have also uploaded cellphone mass figures to our IR website for your easy reference. As I review our financial results, I'm referring to the third quarter reversion at say otherwise and all monitory figures are in or not specified.

As Yan just mentioned, our total sales volume for third quarter was 466,000 units up 49% compared to the same period of last year. Among this, 451,000 units sold in China and the remaining 14,000 units overseas. Nearly 50% of our sales volume in China came from our top three models this quarter. And the number of franchise stores in China was 4,542 at the end of third quarter.

Total revenue for the third quarter amounted to RMB1.69 billion, an increase of RMB67 million or 65% compared to the same period of last year and the results came in slightly ahead of our guidance, primarily due to the robust sales volume growth in China during the peak season in third quarter. China revenues were RMB1.62 billion, increased 84% year over year and accounting for 95% of total revenues.

Of this, the quarter revenue were RMB1.48 billion, and this growth was primarily driven by a 74% increase in sales volume and coupled with a higher ASP. China scooter ASP was RMB3,283 representing a nearly 7% year-over-year growth and remaining largely stable compared to the previous quarter.

And this growth was primarily driven by a favorable shift in our product mix. In Q3, our top seller ant with a retail price range from RMB3,699 to RMB4,599 continue to perform well. In the meantime, complemented by a strong contribution from the new products like the NLT and NSP range from RMB3,899 to RMB6,299

Collectively, these three top sellers accounted for nearly 50% of our total sales volume this quarter. Overseas revenue was RMB77 million representing 5% of total revenue. school revenues, including electric motorcycles and Mopac, (inaudible) and e-bike amounted to RMB67 million, down from RMB130 million in the same period of last year, and this decline was driven by a decrease in sales volume and ASP of Keplers.

Over this scooter ASP increased 90% year over year and 41% quarter over quarter to RMB4,648 and driven by a greater proportion of revenue coming from the higher priced electronic motorcycles and more pads. Revenue from accessories, spare parts and services were RMB145 million, representing 8.6% of total revenue and 51% increase compared to the same period of last year due to the increase in spare part sales in China.

Gross margin this quarter, gross profit this quarter in city RMB370 million, marking a significant improvement compared to RMB142 million during the same period of last year and RMB252 million last quarter.

The gross margin was 21.8%, 8 ppt higher than the same period of last year and 1.7 ppt higher than the previous quarter marking our best quarterly gross margin performance this year, and this improvement was driven by the ongoing cost reduction initiatives and the economy of scale from higher sales volume in China market.

Operating expenses for the third quarter were RMB297 million increased 48% compared to the same period of last year. and OpEx ratio down to 17.5%, dropped from 19.6% in the same period of last year and 21.1% in the previous quarter. Selling and marketing expenses rose by RMB87 million year over year to RMB215 million, primarily driven by higher spending on marketing and online promotion campaigns in China.

Selling and marketing expenses representing 12.7% of revenue compared to 12.5% in the same period last year and down from 16.1% last quarter. R&D expenses increased by RMB30 million year over year to RMB43 million, primarily due to the higher staff cost and share rate compensation. R&D expenses representing 2.6% of revenue compared to 3% in the same period last year and down from 3.5% last quarter.

G&A expenses decreased by RMB4 million year over year to RMB39 million, mainly due to the improved cash collection from account receivable which resulted in the reversal of better provision and G&A expenses representing 2.3% of revenue, down significantly from 4.2% in the same period of last year, well up from 1.5% last quarter as the company benefited largely from foreign currency exchange gains in the previous quarter.

The net income was RMB82 million with a net margin of 4.8% on the GAAP accounting compared to a net loss of RMB41 million for the same period of last year and net income of RMB5.9 million for last quarter. The non-GAAP net income was RMB88 million. And turning to our balance sheet and cash flow.

We ended the quarter with RMB1.8 billion versus RMB1.1 billion last year-end in cash, restricted cash, term deposits and short-term investments and our operating cash inflow amounted to RMB433 million. The CapEx amounted to RMB73 million, reflecting an increase of RMB32 million compared to the same period of last year.

And this can be attributed primarily to an increase in the opening of new stores and module cost in China. And now let's turn to guidance. We expect the fourth quarter revenue to be in the range of RMB737 million to RMB901 million representing a year-over-year change of minus 10% to plus 10%.

And please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectations, which is subject to change due to uncertainties relating to various factors.

And with that, we'll now open the call for any questions that you may have for us. Operator, please go ahead.

(Operator Instructions) Seeing no more questions in the queue. Let me turn the call back to Mr. Li for closing remarks.

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

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.