Niu Technologies

Good day, ladies and gentlemen. Thank you for standing by and welcome to the New Technologies first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Mr. Jason Young, investor relations manager of new technologies. Mr. Yang, please go ahead.

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss new technologies results for the first quarter 2021. The earnings press release, corporate presentation, and financial spreadsheets have been posted on the new investor relations website. This call is being webcast from companies on our website, and the replay of the call will be available soon. Please note today's discussion will contain forward-looking statements made under the safe harbor provisions of the United States 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 to update any forelooking statements, except as required by law. Our earnings press release and list call include discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results. On the call with me today are our CEO, Dr. Yan Li, and the CFO, Mr. Hardy Zhang. Now let me turn the call to Over Yan.

Thanks, Jason, and thanks everyone for joining us on the call today. So in Q1, we saw a 322% year-over-year jump in China sales. We shipped nearly 145,000 units in China, propelled by an aggressive expansion of our retail footprint and a multi-channel marketing campaign nicknamed the Year of New. Additionally, our overseas market saw a shipment of 5,000 units for the first quarter. The small decline of 15% in the overseas market was primarily due to the orders that could not be shipped out, resulting from the ongoing global shipping bottlenecks you are all aware of. The total Q1 sales for China and the international market were up 273% year over year. In Q1, not even the Chinese New Year holiday could slow down our retail expansion. We added 300 new branded stores across China reaching 1,916 stores by March 31st. During our global product launch event on April 6th, we announced the opening of our 2,000th store in China. We're well on track to hit our Q2 target of 300 new stores for the quarter. For the international market, even under the restraint of COVID-19, we managed to add an additional seven flagship and premium stores, which now total 123 across Europe, the Americas, and the Southeast Asia. This is in addition to the 1,000 plus authorized new dealers in our global markets. For those of you who didn't already know, our company name, Niu, actually means bull or ox in English. The year of 2021 happens to be the year of ox in the Chinese lunar calendar. So we kick off the Chinese New Year by launching the Year of New, Be a Newer nationwide campaign. We enlisted the help of popular musicians and social media influencers, which generated more than 200 million views across multiple social media platforms during the holiday season. We also kicked off an over-the-air advertisement campaign during the Chinese New Year, which allowed us targeting over 110 million viewers across markets in China that we have identified as key to helping us accelerate our growth. We also collaborated with one of the hottest online documentary series called Exacted Food on Bilibili, which helped us target another 41 million viewers in the key demographic segments. Our new branded Douyin and Kuaishou accounts also benefit from those activities, with quarterly views reaching nearly 55 million views in Q1, marking a 38% year-over-year increase. Now, in the overseas markets, our social media channels gained nearly 1 million interactions on Instagram and Facebook. We also announced our partnership with Formula E world champion Antonio Felix da Costa as the official new ambassador, and the kickoff of our partnership is Lime in the key U.S. and European markets, which will help accelerate adoption of electric two-wheelers. We have been making noise both in the China and overseas market in order to position ourselves as the go-to lifestyle brand for urban mobility and helping us grow sales by more than 300% in China alone. Now riding our strong sales and marketing performance in Q1, we hit a ground running on April 6 with our global product launch, simultaneously announcing both China and international product releases. Building upon the customer demand for our Gola series of electric mopeds, we launched the Gola F series with F0, F2, and F4, and the Gola C series with C0. These are two key product groups that will help us expanding into the wider range of urban markets and the customer segments around China. During that same event, we launched our first electric kick scooter for Europe and the United States, the KQI series. These five new products were also accompanied by full upgrades to our existing series of mopeds and electric bicycles. First, all of the upgrades to the existing electric bicycle mopeds are made under the hood. First, we were very excited to launch a seventh generation of our new energy system, which saw an upgrade of our proprietary battery management system, the introduction of VTEC electric motor, and optimization of our FOC algorithm for the motor controller. which can improve the driving range by up to 32% and improve acceleration by 10% to 15% under the same motor power in most of our existing vehicles. And lastly, as we finalized commercialized version of our urban motorcycle, the RQI, we have made great strides of our mid-mounted motor that can reach speeds of 160 kilometers per hour. As for our product upgrades, let's start with the brand new MQI 2S. An upgrade of the 2020 MQi2, which is served as our flagship product under the new China national standard for electric bicycles. The new M2S is equipped with our latest smart IoT technologies, a color display with navigation that can mirror your mobile phone, the OK Go system with distance sensing and keyless ignition which enable user to start a bike as soon as they sit on the seat. It's those small user experience touches that our customers really appreciate. The M2S is expected to be priced at up to 8,000 RMB, and we also upgrade our classic UQI series with the all-new color display, a new handlebar design with more intuitive control functions, And most importantly, we have given customers the option to upgrade to a larger battery, which increases the driving range by 35%, or up to 75 kilometers on a single charge on a new UQi. The upgrade UQi series is expected to be priced at up to 6,000 RMB. For the new product, we launched two new Goa series, the Goa F and Goa C series. Those two new series employ an all-new design language for the electric bicycles in China, which will further expand our offerings for the mid-end product lines, which help us to reach a wider range of customers' taste. Inside the Goa F series, we announced three new models, the F0, F2, and F4. F0 and F2 are classified as electric bicycles in China, and were introduced into the market on April 6th and May 17th, respectively. The S4 is an electric motorcycle and will be introduced later this year in Q3. The entire Global S series has a masculine design style which features the eagle eye headlights. All of those models are lithium-ion battery-based. The S0 has two versions, primarily differentiated by the battery and drive range of 50 and 60 kilometers respectively, or affordably priced at RMB $2899 and $3299 respectively. We believe those will be well received by the market. Our beliefs were confirmed when we launched the Goa F0 through the JD.com pre-sales on April 6, where we sold 41,000 units and surpassed more than RMB 100 million in sales, setting the JD.com pre-sale record for urban mobility products. The F2 has two versions, 50-kilometer and 70-kilometer range options. priced at RMB $3699 and the $4,099 RMB. The S4 has three versions with drive range up to 100 kilometers and expected to be priced at up to 7,000 RMB. Now, under the Goa C-Series, we have first announced the C-Zero, an electric bicycle with a more feminine design style. The Goa C-Zero comes with multiple macarons in their flavored color. choices and a wide variety of accessories, including a child seat, enable mothers to ride safely to take their children to and from school every day. The Gola C-Zero also has two versions with a drive range from 50 to 60 kilometers and expected to be priced around 3,000 RMB. Since first announcing the C-Zero in April, we have received countless solicitations both online and in our stores around the country. We expect to release the C-Zero for sales starting in June. Now the Global S-Series and C-Series significantly expand our global product line portfolios. The successful pre-sale campaign for the F-Zero is a direct evidence that there is a large group of consumers who appreciate the design style and aesthetics. Together with the G-Series, the three global lines will offer our customers a thoroughly designed products that meet their tastes and desires while being competitively priced and backed by our best-in-class technologies. Last but not least, we launched a completely new category in the new ecosystem of products with our KQI Kick Scooter. The urban mobility trends are changing around the world as customers adopt new models of safe transport, and the cities began to reshape their urban centers. Our electric moped and motorcycles offer one type of mobility solution for customers in cities across Europe, the Americas, and South Asia. We also recognize a rapid growth in user demand for micro-mobility products that cater to shorter one to five kilometer trips. And this is primarily being fueled by electric kick scooters in both sharing and consumer-owned form factors. Now, in order to meet this demand and add to our product lines, we have rapidly developed a team of seasoned engineers who are specialized in the development and manufacturing of micro-mobility products. The all-new KQi3 kick scooter will be the first of several models we'll release in the coming months for the key overseas markets. Now equipped with the best-in-class 350-watt rear hub motor and powered by our 48-volt new energy system, and with the wider and safer platform decks and the handlebar architecture and wider tires, the KQi3 will outperform many of the similar-priced products in the market in both performance and the riding stability. And of course, like all our products, the KQi3 is app-connected. The KQi3 has a pro and sports version and will be priced from US$599 in the United States and €599 in Europe. An online pre-sale will begin in the coming weeks with deliveries directly to the customer homes later this summer in Europe and the United States. Now, in addition to our current 1,000-plus authorized new dealers, the introduction of a kick scooter will also allow us to open a new range of retail channels, that were previously not ideal for our electric moped, including big box retail and electronic chains like Best Buy, MediaMarkt, micro-mobility retailers, and online platforms like Amazon. Now I want to wrap up with a short comment about ramping up our manufacturing capacity. For those of you who have been following along for the past few quarters, you know we have planned to increase our manufacturing capacity by an additional one million units per year when we complete the phase two of our Changzhou factory. We expect the phase two to be completed by early Q3, which will bring our total annual design capacity to two million units, easily supporting the projected growth in the quarters ahead. Now with this, let me turn to Cardi to talk about financials.