Niu Technologies

good day ladies and gentlemen thank you for standing by and welcome to the new technologies second quarter 2023 earnings conference call at this time all participants are in listen only mode later we will conduct the 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 Ms. Crystal Lee, Investor Relations Manager of New Technologies. Ms. Lee, please go ahead.

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss new technologies results for the second quarter 2023. The earnings press release, corporate presentation, and financial spreadsheets have been posted on our investor relations website. This call is being webcast from our 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 U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions, and other factors. The company's actual result may be materially different from those expressed today. Further information regarding the risk factors is included in the company's public filling with the Security and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required by law. Our earnings press release and this call include discussion of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. On the call today with me are our CEO, Dr. Yan Li, and CFO, Ms. Fionn Zhou. Now let me turn off the call to CEO Yan.

Well, thank you, everyone, for joining us on the call today. So in Q2 2023, our total sales volume was 211,996 units, returning to the same level from one year ago, with a year-over-year slight increase of 1.5%. Specifically, sales volume in the China market has a small year-over-year drop of 1.0%, 278,567 units. And the sales volume in the overseas market experienced a year-over-year 17.1% growth, to 33,429 units. Total revenue in Q2 2023 was RMB 828.8 million, matching the level from Q2 2022 with a slight increase of 0.1%. For new, Q2 2023 was a quarter to get back on the track of long-term growth through a focus on premium mass premium products, as well as sustained effort to enhance our brand. In the China market, the new products that launched in Q2 have demonstrated substantial growth potential, spurring our sales growth and generating extensive discussions on social media. Capitalizing on the momentum garnered from those new product launches, we also rolled out engaging user events. Those events incorporate our new products and collaborative effort with other brand partners, thereby positioning you not merely as a leader in urban mobility, but also as a pioneer in cultivating a desirable lifestyle. In the overseas market, we experienced mixed results with sales of electric two-wheelers dropping by 68% year-over-year, while the micro-mobility sales increased by 48.5%. The decrease in the sales in electric two-wheeler markets, mainly due to the macroeconomic strength in Europe, coupled with delay in our high-performance product rollout. UC-improved 125cc high-performance product is now scheduled to roll out in Q3 2023 to fill in the current gap in product offerings and to stimulate growth. For the Southeast Asia market, we are rolling out the battery swapping solutions with local operating partners second half of this year. The expectation of new products being released also contributed to the year-to-year decrease in sales volume in Q2. Regarding to the micromobility market, we continue to see stable growth driven by the established product portfolio and the foundation we laid out with the current sales network. In this quarter, our award-winning micromobility products were sold through online channels during our anniversary sales and in offline channels covering major retail partners in the US and Europe. Now, delving into China's market performance, in Q2 2023, we rolled out new products in China market as planned, and new products are proven to be a strong driving factor behind the growth. During the last quarter's earning call, I introduced the new premium flagship product MQIL and the mid-end product G400 and G400T. The new products are well received by the market with great popularity. The MQIL has gathered significant popularity across all major social media platforms with its unique design that inherits the design from our all-time classic M series, along with a significant upgrade in performance and smart connectivity. The MQIL is designed with extra-long range up to 170 kilometers, and the industry-leading smart technologies that support functionality like supercharging, smart dashboard with navigation display, smart lighting system that changes light setups with sunlight sensors. It's fully integrated with Apple's ecosystem that allows simple control through Siri. In just a few months since its launch, videos featuring the MQIL has amassed more than 50 million views and 1 million comments and likes on Douyin. Additionally, it has been a trending topic on electric scooter categories on Xiaohongshu. On the mass premium product, in June we launched a G400 and G400T, and those are the two products that we took an innovative approach to use the same platform to build two bikes. The light motorcycle G400 and electric bicycle G400T received positive feedback with almost 40 million views on the short video, highlighting the scooter's simplistic design and practical functionalities like large storage space. With the competitive pricing from RMB $4,599, the G400 and G400T has been met with considerable popularity in the market. Now, the enthusiastic response to our new products, namely the MEQIL G400 and G400T, is a testament to our commitment to the innovations and quality. Those products launched in May accounted for over 60% of total sales volume in June, indicating their immediate popularity among customers. Our sales performance during the 2018 mid-year shopping festival was also outstanding with a growth rate of 161% in sales revenue compared to the same period last year. Several of our key products featured on the top selling list of major e-commerce platforms like JD.com and Taobao, reflecting their wide acceptance and popularity among users. Specifically, our recent launch, MEQL, emerged as the most popular product on JD.com. The strong performance across multiple products demonstrates the effectiveness of our product strategy to focus on premium and mass premium market and our ability to cater to the market's needs. Now, in Q3 this year, we launched F400T, which is another demonstration to our commitment to bringing quality product to the market. The design of F400T inspired by the fighter jets, along with the classic F-Series falcon eye light, gives a sleek and stylish look. It incorporates all the smart functionalities that the new is known for, along with the unique power boost mode that allow riders to enjoy a speed boost for 10 seconds. This mode not only makes the city commuting easier, but allowing riders to navigate through traffic effectively, but also adds an element of fun to the ride. The S400T went online through live streaming on August 8th with a pricing of $4,999. The new product live streaming has generated nearly 1 million views and received nearly 6,000 pre-orders from the live stream. Now the recent addition of F400T together with MEQIL, G400, and G400T have already shown promising signs of popularity. As those products will only launch at the end of Q2, their full impact on performance is yet to be seen. We are optimistic that the growth driven by those new launches and the product we plan to release in the future will further boost our performance in the upcoming quarters and strengthen our market position. Leveraging the momentum from launch of a new product, we initiated several marketing campaigns and user events this quarter. The marketing campaign will primarily conduct through online platforms like Douyin and Xiaohongshu, and together the campaign has gained over 1.4 billion views across platforms. Moreover, leveraging the new innovative ambassador network, we launched more than 30 user events in 70 cities in the first half of 2023. Through those high user-engaged events, we have successfully brought diversity and creativity into the new user commitment. Our commitment to establishing you as a leading lifestyle brand for urban mobility goes beyond our unique and differentiated product offerings. This quarter, we took a significant stride in strengthening our brand positioning by engaging strategic collaborations and participating in high-profile events. A key highlight was our collaboration with the global renowned IP Kumamon. We host the online livestream event inviting beloved Kumamon to the new store in Shanghai. And this event generates significant buzz, and we plan to further capitalize this momentum by launching two new cross Kumamon scooter soon. In addition to co-branding activities, we also participate in exhibitions and events organized by leading lifestyle brands like North Face and SnickerCon. Our new scooters were showcased during the North Face Mountain Festival in Yangshuo and the SnickerCon in Guangzhou. Those opportunities allowed us to present a new brand to a larger and diverse audience, both on-site and online. Through those initiatives, we have successfully positioned you as a leader in urban mobility and a desirable lifestyle partner. We will continue to leverage strategic collaborations and high-profile events to enhance our brand visibility, attract new customers, and solidify our position as a go-to brand for urban mobility solutions. Now, on the overseas market, we delivered a mixed result with sales of electric two-wheelers dropping by 68%, and the sales of micro-mobility categories increased by 48%. For the electric two-layer market, we released a draw plan of improved 125cc high-performance product in the second half of 2023 to fill in the current vacancy in our product offerings in order to regain growth. We have experienced some challenges in the electric two-wheeler market this quarter, primarily driven by the economic slowdown in our key European markets. The economic downturn, combined with gaps in our product portfolio in terms of high-performance electric scooters, has added to the challenges. Another factor impacting our performance is the increase in lithium battery price in 2022, which has continued to affect our sales this quarter in Europe. However, our international distribution partners are eagerly awaiting for the schedule of Q3 rollout of the performance-upgraded high-performance scooters. They're also anticipating a pricing adjustment as lithium battery price stabilizes and returns to normal levels. In the Southeast Asian market, however, we have observed a trend of rising demand in electric two-wheelers. We have delivered electric moped battery swapping solutions with swappable batteries and battery charging cabinets. We're currently working closely with local partners in bringing this solution, allowing the operators to combine selling the moped chassis and renting the batteries, which practice will substantially lower the upfront cost of purchasing electric mopeds. We plan to officially deliver the battery swapping solutions along with the first model that's compatible for battery swapping to our local Southeast Asia partners in second half. Now, our micro mobility products have shown stable growth this year with a year-over-year increase of 48%. This growth has been driven by both our diversified product portfolio and our expanded sales network. Our current product offering cater to a wide range of market demand. We have high-end, high-performance products that are in the $800-$900 price range, as well as entry-level options in the $300-$400 range. This diversity allowed us to cater to a broader spectrum of customers' needs and preferences. Moving forward, we have planned to further diversify our product portfolio, and we'll be rolling out more products in the second half of 2023. Now, we're pleased to share our kick scooter product that received significant attention and recognition. The KQi2 and KQiU's plus scooters will honor with the Prestige IF Design Awards 2023, a testament to our commitment to innovative design and functionality. Further solidifying our standing in the industry, the KQi3 Pro was selected as the Gold Winner 2023 of the New York Product Design Awards, and the KQi3 Max scooter has been the recipient of the Best Electric Scooter from TomSky Award. Most recently, the Riders Guide Awards have named our KQi3 Max scooter as the best high-performance commuter and our KQi2 as the best electric scooter under $600. Now, the recognition of this product from this market enables us to continue to expand our growth sales network. As of August 2023, new products are available in over 400 retail stores in the US and over 700 in Europe through retail partners. This sales network has laid a solid foundation for ramping up our product sales in the coming quarters. Now, other than expanding the sales channel coverage, in this quarter, we leveraged presence of online channels to successfully bring up sales. In June, we initiated anniversary sales campaign time for New Year's 8th anniversary. We launched a series of events from giveaway campaigns to special sales promotion to engage new and existing users. The anniversary sales campaign generated a total of around 1.5 million views. Now, in terms of marketing performance, we have continued to collaborate with influencers to strengthen our brand presence in the market. In the first half of 2023, we worked with over 50 influencers who boost large fan base. Through a co-created content featuring new product, we have been able to generate over 1.2 million views. Alongside our influencer collaborations, we have also forged partnerships with local business to further expand our brand presence. Now, other than the partnership, New has been actively participating in events, exhibitions worldwide, making the global appearances to showcase our products and brand values. We participated in North America's largest electric vehicle festival, the Electrify Expo, in Los Angeles and San Francisco, and we plan to go to Expo in New York and Miami later this year. We're currently preparing to make product appearances of a few of our key products on some of the largest consumer electronics trade shows, such as IFA and ECMA. and looking forward to share the details in a few months. Now, as a promoter of sustainable living for all, we are dedicated to providing our customers with more environmentally friendly smart urban vehicles to make a positive impact on the environment. We're spreading the ideas of sustainable living through not just our product, but also our daily operations. In this quarter, we continue with the Renew, a global sustainability initiative designed to renew our planet as part of our Earth Day campaign. In this year's Earth Day cleanup events, we'll attract participants across Bali, Nepal, Guatemala, Hawaii, Dominican Republic to go on street riding new scooters and promote environmental friendliness lifestyle. Now looking ahead to the second half of 2023, we remain optimistic for both our China international market. The China market has already shown signs of recovery this quarter, largely driven by the launch of new products. We anticipate this growth in sales will continue into Q3 as we begin to deliver those new products to the market. Our focus on the premium market has also enhanced our brand recognition thanks to our branding and marketing activities. However, we are also currently facing some temporary disruptions in some of our key cities due to some regulatory changes. For instance, regular changes in electric bicycles in Guangzhou and other cities who propose limited use of electric bicycles on the main roads during rush hours could potentially affect our sales in the short-term uncertainties. Now, regarding to the overseas market, we anticipate regaining growth in the electric two-wheeler categories as we roll out our high-performance electric moped in Europe and introduce our battery swapping solution in South Asia in the second half. However, due to uncertainties in the macroeconomic factor, we expect the growth may take time to fully manifest in our sales performance. Conversely, for the micro-mobility categories, we're confident that we can maintain healthy, stable growth through our continuous channel expansion and brand recognition building, supported by our established product portfolio. We also plan to release major product portfolio upgrades later this year, which we believe will drive both sales volume and margin improvement over the long term. Now I'll turn the call over to our CFO, Fiyang.