Niu Technologies

Good day, ladies and gentlemen, thank you for standing by and welcome to the new technology second quarter 2021 earnings conference call. At this time, all participants are in the listen only mode. Later, we will conduct a question and answer session and instruction 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'll turn the call over to Mr. Jason Yang, 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 third quarter of 2021. The earnings press release, corporate presentation, and financial spreadsheets have been posted on New Investor Relations' website. This call is being webcast from companies on our website, 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 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 filings with the Securities and Exchange Commission. The company does not assume any obligation to update any forelooking statement 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 the reconciliation of GAAP to non-GAAP financial results. On the call with me today are our CEO, Dr. Yan Li, and CFO, Ms. Fionn Zhou. Now let me turn the call over to Yan.

Thanks, Jason, and thanks, everyone, for joining us on the call today. So in the third quarter, we have seen a strong growth again with our total sales volume reaching 397,000 units, a 57% year-over-year increase, making this our best quarter for sales in our history in terms of volumes. The sales volume in China market reached 392,000 units, a significant increase of 60% year-over-year, whereas the volume in the international market reached nearly 5,000, down 11% compared to last year, primarily due to the shipping issues that you are all aware of that continue to delay orders that we have received and manufactured, but cannot leave the factory and therefore cannot be booked at sales. In the first three quarters of the year, our sales volume totaled 800,000 units, an increase of 77% compared with the same period last year. Now, the strong Q3 growth in the China market showcases the strength of our growth strategy, which includes the expansion of our product portfolio to cover a wide range of electric scooters and the rapid expansion of our retail channels and geographic footprint. As mentioned in the last earning calls, Starting this year, we have launched five new vehicles under the new brand and five new vehicles under the Global brand, which enabled us to have a wide range coverage of the consumer needs from mid to high end. The new product design also takes into account preferences of both male and female customers, allowing us to attract a wider range of customer groups. In the electric motorcycle class, our entry model, Global G3, has a starting price of RMB $360 of 3,699 RMB, and our top of the range NQi GT has a price tag of RMB 20,299. We have a total of eight series and 22 electric motorcycle product offerings. For the electric bicycle class, we have our entry level Goba G-Zero with a price of RMB 2,499, and our top of the line model UQi Plus with a price of RMB 8,999. We have a total of 12 series and 42 product offerings. From the design style, we have three series, the G, S, and C, each with distinctive design style under the Gowa brand. And under the new brand, we have the N, M, and U series, each with a unique and elegant style. In terms of performance, we offer a drive range of 40 kilometers to 100 kilometers on one charge for both electric motorcycles and electric bicycles. Since the rollout of China regulations on electric bicycles over the past 2.5 years, we have quickly developed a full product portfolio to cover the mid to high-end market. The full coverage was the key to fast growth in Q3 and also set a solid foundation for future growth in 2022. As we continue to expand our product portfolio this year, we are simultaneously expanding our retail store footprint across China rapidly. Q3 is traditionally a peak season for sales, but a low season for store expansion. However, this time we were able to couple our best sales quarter ever while also adding another 320 new branded stores across China, which is 1.6x of the expansion pace compared to Q3 2020. As of September 30th, we now have 2,686 stores operating in China. We're well on track to have 3,000 stores in operation by end of 2021. These stores will serve as a foundation to drive sales growth for 2022. Now, moving away from sales for a moment, I'm very proud of a milestone we hit as a company last month. On October 11th, our more than 2 million users helped us reach the 10 billion kilometer riding mark. It was the first time 10 billion km has been recorded in two-wheeler industry history. To celebrate this awesome milestone, we launched a series of marketing campaigns with the slogan of Feel a Bit Proud or Feel a Bit New starting in September and will run through the end of the year. The brand of new represents style, technology, and freedom. Along those brand values, we have selected a set of representative new users and shared their story with new scooters over multiple channels. These users include photographers, travel enthusiasts, talk show hosts, and others. Each story showed how riding a new vehicle has helped them with their daily urban commute and make their lives a little better or feel a little bit pride or proud with new. These stories and videos have been broadcasted over social media channels like Weibo, WeChat, and our website. And of course, many of the KOLs and KOCs have also created their own content around the theme of feel a little bit proud, a bit new, just further amplifying our message and reach. In just a few short weeks of all those have achieved nearly 100 million views. More importantly, it helped to convey our brand value to our users and potential customers. The message positioned you not just as an electric scooter company, but also as a lifestyle brand. Besides the user stories, we also launched a social media video campaign with a feature video of Feel A Little Bit Proud. The video has been aired across social media offline and also has been even showcased in ads for the new James Bond film, receiving more than half a billion views. Now, considering Neo has more than 2 million users, we also engage our users with a treasure hunt location-based game on our app. Users receive a raffle ticket if they ride their Neo past a secret spot in their city. These tickets can be redeemed for various prices like accessories and also enter them into a lottery for 10 billion kilometer limited editions. In our initial rollout in 10 cities over the past month, More than 2 million digital raffle tickets have been collected by our users, showing just how engaged our users are with our brand, product, and services. All of those user-centric activities and marketing campaigns have improved our brand awareness significantly in the China market. And those campaigns especially resonate with the Gen Z users who are seeking brands that have deeper meaning and use commitment to style, technology, and freedom is something they value greatly. The combination of marketing campaigns with our continuous retail store expansion sets up for another quarter of growth here in Q4. Now looking at international sales for a moment here, our Q3 was a little below expectation as compared with the China market. But this is not a result of decreased demand. As many of you are aware, international logistics continues to create ever longer backlogs, and we're not immune from it. In fact, our book orders were 50% higher than what we actually shipped, and everything that's being shipped is typically on back order at any one of our point of retail across the globe. Despite the low season in Q3, we're in fact very optimistic with Q4 for the international market orders. We're excited about tomorrow, actually. On November 23rd, we will launch several new products at ECMA, the largest two-wheeler shows globally held in Milan, Italy. including our most powerful 125cc electric moped, the MQI GTEVO, our first 150cc hybrid moped, the YQI, and our upgraded e-bike, the BQI, and two additional KQI kick scooters, many of which will be shipped this quarter and in stores to kick off the sale season in February across Europe and America. First, in the electric motorcycle moped classes, we will launch the MQI GT EVO. EVO will be the mark of new performance line. The MGT EVO will be unveiled at ECMA, and it is the first product launching our new EVO series. It has been redesigned inside out with the top speed of over 100 km per hour and an exciting 0 to 60 km per hour track time in under six seconds, outstripping its gas-powered rivals. We believe that this is the first electric moped that can really compete on price and outperform on power and speed with its petrol competitions in the 125cc class of mopeds. In addition to the performance, the MGT EVO has added a number of features that include a keyless ignition, electric anti-theft locking, and an all-new TFT color dashboard, customizable via the user's app. We have already received several thousand orders to be shipped in Q4, and the MGT EVO will be in stores in Europe and America as early as February with a price tag of 5,000 euros. Besides the MGT EVO, we'll be also debuting our first 150cc equivalent hybrid moped, the YQi. The YQi combines the best traditional IC engines and the lithium-ion battery-powered electric motors. It comes with a 150cc IC engine coupled with 2.4 kW electric motors, providing accelerating acceleration that is much superior to even a traditional 250cc moped. The YQi is positioned as a gateway vehicle for EV for two-wheeler enthusiasts who have not made the transition away from petrol. It is still in development and will be available in Europe and America in late 2022. Now, with the addition of YQI-MQI-GTEBO and also the upgraded MGTS and the RQI, our quad motorcycle, we have provided full coverage of motorcycles from 100cc to 150cc, greatly expanding our traditional offerings of 50cc equivalent electric moped internationally. We believe this will further consolidate our leadership in the electric motorcycle market globally. Now, as we mentioned last earning call, we have entered the micro mobility market with the pre-sales of our kick scooter product, the KQi3, on Indiegogo on July 13th. After a successful run on Indiegogo, we then have received more than 15,000 orders by the end of September 30th. Tomorrow at ECMA in Milan, we'll bring two new kick scooter products to the market. something we call a KQi3 Max, which will be an upgrade of KQi3 Pro. It is equipped with a more powerful upgraded 450-watt motor and with a larger lithium battery capacity, which can easily reach a speed of 35 km per hour and have a dry range of 65 km. There is no mass-market product like this in the market right now, and we're excited about it. will be priced at 949 euros. We'll also bring an even more economical kick scooter into the family called the KQi2. The K2 takes many design cues of K3 and with more user customizable features. The K2 has a top speed of 25 kilometer per hour and the riding range of 40 kilometers. It will be priced at 499 euros. And with the sleek and stylish design, the K2 expected to become a favorite urban mobility commuter globally. The K2 will be shipped before the end of December 2021. Now with the K3 and the K2, we have a robust lineup of kick scooter products with price starting at 499 euros up to 949 euros. We have a portfolio of offerings that meets the budget of wide range of customers who are looking for affordable solutions for their urban commute. We have already received many orders and we expect to ship more than 20,000 units of kick scooters in Q4 to fulfill the first batch of orders. We will also expand our offerings into the e-bike market. Tomorrow at ECMA, we will launch our new e-bike product called BQI that has a stylish urban minimal design and is capable of extended ride range of 100 kilometers thanks to its two removable batteries. The BQI will be priced under €1,500, making it the most powerful and affordable commuter e-bike to hit the market in 2022. The continued growth for e-bike demand across Europe and America is an exciting growth spot for us in both those markets. And with products like BQI, we think we can quickly tap into the demand over the next 12 months. Now, with the kick scooters and e-bikes to cover micro-mobility market, we're also expanding our international sales channel. Besides the current 153 flagship and premium stores and 1,000-plus authorized dealers, we have also established our e-commerce presence on channels like Amazon and also offline channels, which will allow us to enter into consumer electronics stores like the media market in Europe and many across the U.S. Supported by the diversified product offerings and channel expansions, we're quite optimistic with our international sales in Q4 and in 2022 beyond. Now I'll turn the call over to Fian to discuss our financial results. Fian.