Niu Technologies

Good day ladies and gentlemen, thank you for standing by and welcome to the NEHOR Technologies First Quarter 2025 Earnings Conference Core. 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 Ms. Crystal Li, Investor Relations Manager of NEHOR Technologies. Ms. Li, please go ahead.

Thank you operator. Hello everyone, welcome to today's conference call to discuss new technologies results for the first quarter 2025. The earnings press release, corporate presentation and financial spreadsheet has been posted on our Investor Invest Relations website. This call is being webcast from our company's IR set 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 provisions of the U.S. Private Security Legislation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions and artifacts and risk 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 rulings 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 included discussion of certain non-GAAP financial measures. The press release contained 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 Mi-Fiang Zhou. Now let me turn the call over to CEO Yan.

Thank you Crystal. Hello everyone, thank you for joining us today. In the first quarter of 2025 we achieved a total sales volume of 203,000 units, marking a significant .4% -over-year growth. Behind this strong performance was a 66% -over-year increase in the sales volume in the China market and a .4% -over-year growth in the overseas market. Total revenue for the first quarter reached to RMB 682 million, reflecting a 35% increase compared with the last year. The growth margin rebounded to .3% with .9% -over-year increase, primarily driven by the pump cost reduction in platformization, component standardization and procurement cost improvement. The performance in Q1 2025 has set a tone for the rest of the year, underlying our drive for high-volume revenue growth as well as profitability improvement. Taking a closer look at our performance in China, sales volume reached to 183,000 units in this quarter. Our focused product portfolio strategy emphasizes on technology innovation and expanding sales channels, as well as targeting marketing strategy for the key drivers to the strong domestic performance. In Q1 2025, we maintain our focus in our key product strategy of N, N, U and S series. We enhance our existing products through upgrading and refining our product portfolio, which led to an optimized product mix and offer our customers an even more enjoyable writing experience. Additionally, we step up our motorcycle offerings, introduce models like NX, NL and FX. The expansion diversifies our electric motorcycle range and helps to further our sales channel. First, we successfully launch a comprehensive range of electric motorcycles, including the NX, NL and FX series, spending pricing from RMB 4,000 plus to over RMB 10,000. Each model features significant enhancement in functionality and smart technologies, aligning with our new performance and safety standards. Those additions have significantly expanded our electric motorcycle portfolio, offering consumers more diverse options while reinforcing our position as a premium brand in the electric tool sector. So, diving into detail of each product, on March 21, we first launched the NX Pro motorcycle, priced at RMB 9,999, positioned as the speed champion among the -10,000 RMB electric motorcycles. It's equipped with 72 volts, 42 amp-hour high-energy DCM battery, offering a range of over 90 kilometers on one charge. Powered by a motor with peak power of 6 kilowatts under boost mode, it hits a top speed of 80 kilometers per hour and accelerates from 0 to 50 in just 5.4 seconds. The 8 amp-hour intelligent fast charging system allows for full charging in only 5 hours. The NX Pro received around 2,000 pre-orders and set a sales record on a platform like Douyin, JD.com and Tmall on its launch date. This model has established itself as a pioneer in the high-end two-wheel motorcycle market, reinforced new reputation for high performance and attracting a younger demographic that values speed and innovation. It significantly boosts our presence in the premium electric motorcycle segment. We also launched our entry-level NL, the Smart Electric Motorcycles. Key upgrade includes the enlarged footboard, extended seats and expanded storage compartment. It comes equipped with advanced intelligent features such as full color display, TFDC display with screen measuring navigation, as well as OKGO and GoZZ technologies. Powered by a 2,000 watt peak power motor, the NL reached a top speed of 55 kilometers per hour and includes TCS as standard features. Priced at RMB 4,799, the NL offers a compelling combination of features. We also expanded our S-Series with the FX Pro, FX Force and FX CD, completing the S-Series product lineup on the motorcycle side. With their bold, aggressive design, those models now come with enhanced features such as full color TFDC display, expanded battery compartments, offering options of 72 volt 42 ampere lithium batteries or 72 volt 35 ampere lead-acid batteries. Those models deliver a 45 increase in the top speed and a 72% boost in the peak input power. The S-Series also features dual channel ABS and Magic Wheel which significantly enhance playability and ease of operation, establishing the S-Series as a performance powerhouse. We launched the S-Series on May 13th cross platform such as the D-Mall, JD and DOE and the S-Series is set to be starting in Q2. Now besides the electric motorcycles, we have also integrated those technologies into our electric bicycle lineup, elevating the categories with innovation technologies. We started with the popular signature electric bicycle models such as MST, MLT, MT and MMT. Those approach bring the premium electric motorcycle experience to the electric bicycle categories. The NXT launch on March 21st stands out as the first last electric bicycle equipped with dual channel ABS, a 12 inch full disc motor and a standard boost launch mode. The NXT seamlessly incorporated top tier electric motorcycle features. Those advancements have made a high favorite choice among the consumers, setting a new benchmark in the electric bicycle market. Now we also unveiled two new models under the M-Series targeting the female users, the MT and MMT. The MT stands out for its ultra compact design, vibrant color options and user friendly features like -peak-go systems, making it especially suitable for female users seeking convenience and style. The MMT, a smaller model, embraces iconic M-Series design with fresh colorful aesthetics and a comfortable riding experience tailored to a diverse preference of gen Z female users. As product line targeting those demographics, the M-Series accounted for an impressive 32% sales in Q1, reinforcing its appeal and market success. Now in Q1, our strategic emphasis on standardizing those key product platforms has shown a sign of progress. It enhanced our R&D process and also reduced our bomb costs, contributing a significant improvement of our gross margin in the China market. The positive impact is evident in Q1 2025. Besides the product, we also roll out a series of features in smart technologies such as a full function 5 inch TFT display, the magic wheel, tilted wheel and two advanced T-models with a more advanced feature to be released in Q2 and Q3 this year, with aiming at a significantly enhanced writing safety and uplifting overall writing experience for our customers. Now, in the last quarter, we also continue to enhance our brand influence of our products among the target consumer groups, especially the premium consumers and Gen Z writers. On March 21st, the launch of our NX Pro was marked by a strategic partnership with the renowned Game for Peace. This collaboration introduced the new cup racing tournament within the game, which quickly topped the trending list on platforms like Weibo, Douyin, and Xiaohongshu. The advertising campaign spent over 115,000 placements across 16 major cities, targeting prominent landmarks, key business districts and subway systems, and offices in elevators, garnering over 2.4 billion views. Also on May 13th, we debuted our electric motorcycle matrix product, targeting the premium users and Gen Z users, with the NX and also the FF series. The launch became a milestone in 2025, with stocking sales of over RMB 100 million sales in just the first five hours and a volume of 10,000 units plus. Lastly, in terms of channel expansion, we continued our previous strategy with strong focus on penetrating the previous underrepresented market in China, strategically expanding our retail footprint to ensure our product reaches a broader consumer base. We have expanded our retail footprint by opening about 384 new stores in Q1, with significant focus on tier 3 and tier 4 cities, accounting for 50% of new opening stores. This strategic expansion refined our distribution network, and also paved the way for upcoming launch of our electric motorcycle product in Q2. Additionally, our online presence has been strengthened with sales improvement across multiple online channels, such as our official brand accounts, the localized accounts, regional localized accounts, and also the 400 plus store accounts. This multi-tier strategy has hosted about 10,000 live broadcasts, generating 430 million views, marking a 6x increase compared with Q1 2024 last year. This has significantly boosted our online visibility and customer interactions, contributing to about 100,000 units sales, representing 60% of our total sales volume. Now let me turn into the overseas market. In the overseas market in Q1 2025, the sales volume reached 20,000 units. Within the overseas market, we focused on the electric two-wheeler market, which is electric two-wheeler, more fast than electric motorcycles. The electric two-wheeler market achieved a 3x increase due to the readiness we put in place on the direct distribution operation in key countries such as Germany, Italy, and France. Those direct operations contributed more than 50% sales in Q1. Now with the logistic financing CRM system, also the -the-ground team, we have really built the operations in those key countries and accelerated the network expansion. By the end of Q1 2025, the number of dealers in those direct distributed regions have increased from 120 to 180 dealers, with projections to reach about 250 dealers by mid 2025, exceeding our initial forecast. We have also introduced the full line of electric two-wheeler products, mainly from 50cc L1E models to 125cc L3E models, as well as the off-road motorcycles. Those products priced between 2000 euros to 4600 euros, catering to diverse consumer needs. Now the first batch of new products was shipped in Q1 2025, and now it's being stocked in local warehouse, ready for the peak season sales in Q2. Now with those full line of electric two-wheeler products, specifically electric motorcycles, multi-operated motorcycles, and also the direct distribution operation in place, we anticipate exponential sales growth targeting the 3-5 acts increase in 2025, with Q1 as an early indicator of such growth. Now the fast growth in the electric two-wheeler sectors with the direct distribution region sales anticipate accounting for 60 to 80 percent sales, will contribute significantly to our profitability turnaround in the international market. Now for the micro-mobility market for the international market, such as the kick scooters and also the e-bikes, Q1 2025 is an underperforming quarter with nearly flat volume growth and delayed profitability turnaround due to the tariff situation in the US and also the inventory clear out in Europe. In Europe, our Q1 sales focus on sales of outdated inventories, hence the impact of growth margin and profitability. Those outdated inventory impacts will continue partially into Q2, but we expect to be minimized by the second half of this year. Now in the US, due to the uncertainties around the tariff situation, we deliberately hold back the sales of existing inventories in the US market in Q1 for more clarity. We have implemented price increase in online channels in Q1 and negotiated with offline channels for price increases to be expected in late Q2 and early Q3. Now for the supply to the US market, our manufacturers in South East Asia have already dispatched our first deliveries in late Q1 2025, taking advantage of the 10 percent tariff window. The ship product has not been reflected in the sales yet.

Now,

we

are

carefully watching the tariff situation. However, with the negotiated price increases and the inventory's price of the tariff type, we expect to regain profitability for the second half in 2025 for the US micro-mobility market. Now overall, we remain optimistic about the China market in Q2 2025, building on strong foundation in product and sales. We expect to see the growth of China's development and also the brand momentum. This has already produced the positive initial results in Q1. On the product side, we'll continue to focus on our product portfolio around our core NMU and F series. The launch of the newly upgraded NMF series in Q2 is expected to elevate our brand attractiveness and recognition within the high-premium consumers and the J&Z customers. Simultaneously, the launch of motorcycle products has diversified our product volume, offering consumers a wide array of options. Also, we have moved on to the launch of a new product in Q2 to May 13th, right before the China top sales season of June 18th, to take advantage of this. Now, we'll continue to expand our sales channels, expecting to add another 300 to 400 stores in Q2. The channel expansion will drive sales growth, but it also shows the sign of channel momentum turning around this year. Now, lastly, we'll continue to improve our growth margin as the results ratio via product soft homeization in Q1. And finally, we have worked diligently to modify our current product lineup to create a new design style to cope with the new electric bicycle standard in China to be in place in September. We'll have a solid product lineup and development ready to be in the market by then. Now, looking at the international market, with the trend we observed in Q1 and early Q2, we anticipate a steady growth in the overseas market and turn around profit loss this year. In the electric tooler market, with a complete product portfolio and established direct distribution operations, we anticipate a hyper-growth in both revenue and profit contribution. The sales growth we saw in Q1 is a testament to this foundation we have built. In the following quarters, our focus will be on expanding the direct distribution operations as it yields a higher contribution margin. For the micro-mobility market, even with the turmoil on the tariffs, we have started to observe a turnaround sign from a profitability perspective. With the clearing out the -of-state inventory in Europe, as well as the clarity with the US tariff situation, we expect to rebound with moderate growth and significant improvement in profitability. Now, I'll turn over to our CFO, Yang Zhou, to talk about the financials.

Thank you, Yan. And hello, everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded Excel format figures to our IR website for your easy reference. As I review our financial results, I'm referring to the first quarter figures, unless I say otherwise. And all monetary figures are in non-gave, non-specified. At the end, just mentioned, our total sales volume for the first quarter was 200,000 and 3,000 units, up 57% compared to the same period of last year. 183,000 units were sold in China, while the remaining 20,000 were sold overseas. The total revenue for the first quarter amounted to 682 million, an increase of 177 million, or 35% compared to the same period of last year. The China revenues were 608 million, accounting for 89% of the total revenues. Of this, the scooter revenue was 546 million, a yearly increase of 39%. This increase was mainly due to the increase in sales volume, and partly offset by a decrease in revenue per e-scooters. China's scooters ASP was fell to nearly RMB 3,000. This decline in ASP was primarily attributed to a in-product mix. The notable increase in sales volume of high-end lead-acid models, as mentioned in the previous quarters last year, has led to a more concentrated retail price range from RMB 3,000 to 7,000. And the overseas revenue was 74 million, representing 11% of the total revenue. The scooter revenues, including electric motorcycles, moped, kick scooters, and e-bikes, amounted to 60 million, up from 49 million in the same period of last year. This growth was driven by stronger international demand for electric motorcycles and mopeds, which amounted to a higher retail price, and the premium pricing of these products also contributed to a -over-year increase in the overseas scooter ASP, rising from RMB 2,577 to RMB 2,916, too. And the revenue from accessories, spare parts, and services amounted to 76 million, a 20% increase compared to the same period of last year, due to the increase in the spare parts sales in both China and overseas markets. The gross profit for the first quarter exceeded 118 million, marking a significant improvement compared to 96 million during the same period of last year. And the gross margin was 17.3%, 1.6 ppt lower than the same period of last year, but 4.9 ppt higher than the previous quarters. The domestic market gross margin improved due to successful cost reduction initiatives, which increased the overall GN by 1.2 ppt. However, the overseas key scooter margins dragged down the total gross margin by 2.8 ppt, primarily due to the three factors, the impact of 25% of the US tariffs implemented last June, elevated freight cost, and aged inventory right downs. The operating expenses for the first quarter were 165 million, remaining flat compared to the same period of last year. However, the OPEC's ratio declined significantly from .7% to 24.2%. Sully and Martin expenses rose by 9 million -over-year to 150 million, 15 million, driven by a higher staff cost advertising and promotional activities and rental expenses. Sully and Martin expenses accounted for .8% of revenue, down from .9% in the first quarter of 2024. R&D expenses increased by 1 million -over-year to 30 million, primarily due to the higher staff cost and share risk compensation. The R&D expenses as percentage of revenue is .4% compared to .7% in the first quarter of 2024. G&A expenses decreased by 10 million -over-year to 21 million, largely attributed to the foreign currency exchange gains. G&A expenses as percentage of revenue was 3%, a notable reduction from .1% compared to the first quarter in 2024. In the first quarter, we had a net loss of R&D 39 million with a net loss margin of .7% under the GAAP accounting, compared to a net loss of 55 million with a net loss margin of .9% for the same period last year. The adjusted net loss was R&D 31 million with an adjusted net loss margin of 4.6%. And turning to our balance sheet and cash flow, we ended the quarter with R&D 963 million versus 1.1 billion last year. In cash, restricted cash, deposit and short-term investments. And our operating cash outflow amounted to R154 million. The old cax for the first quarter amounted to R24 million, reflecting an increase of R3 million compared to the same period of last year. And this can be attributed primarily to an increase in the opening of new stores in China. Now let's turn to guidance. We expected the second quarter revenue to be in the range of R&D 1.3 billion to 1.4 billion, an increase of 40% to 50% year over year. Please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectation, which is subject to change due to the uncertainties relating to various factors. And with that, we're now open to call for any questions you may have for us. Operator, please go ahead.

Thank you. If you wish to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please take our first question. And the first question comes from the line of Kyle Wu from City Research. Please go ahead. Your line is open.

Thank you, operator. Hi, this is Kyle from City. Thanks for taking my questions. I have two questions. First is about the sales volume guidance. At the year beginning, we guide 2025 full year sales volume to be 30% to 50% -on-year due to maintain this volume guidance. Second is about the margin. What's our margin outlook for the upcoming quarters of this year? And also, do we still expect second quarter to see net profit turn around? Thank you.

Let me address the first one. In terms of guidance for the end

of volume, we have not changed the guidance. I think we're on the path.

Okay, for the world's margin annually, actually last year our overall world's margin was only .2% overall. And for sure this year the annual world's margin will be recovered from 15%. And for the second quarter this year, we still expected that we will get the profit from the positive expectation for us.

Okay, thank you. Thank

you.

Once again, if you wish to ask a question, please press star 1 1 on your telephone. We will take our next question. And the next question comes from Yateng Chen from CICC. Please go ahead. Your line is open.

Hello. I have one question. I have seen that the average selling price decreased a quarter over quarter in Q1, but the gross profit margin improved significantly quarter over quarter. So I'd like to know what is the main reason and what is the outlook for average selling price in subsequent quarters. This is my question. Thank you.

Okay, I'll take this question. Actually in this quarter, the ASP, especially the China ASP dropped due to we launched the new models. Starting from last year, the launch date of our new models, especially the flagship models varies each year. For instance, the retail price of MP 2025 models, this is our this quarter's best seller. The price range from nearly RMB 4000 to 5000. Whereas last year, we launched the NXP in last Q1. This is our last year's top seller and the price between RMB 6000 to around 12000. The launching date of our new models actually varies our ASP each quarter. But this ASP will smooth if we're looking forward to the next to the following quarters, especially the ANU ASP, as we just explained to the market that the ASP will remain almost the same compared to last year or change a little bit within the single digital change. For the second quarter after this year, actually we expected the ASP, especially in the domestic market, will recover compared to the Q1 this year. We will concentrate it. Actually the models retail price were concentrated in the range from RMB 3000 to 7000. So the ASP will rebound from this quarter's 3000 RMB to around 3000 to 3500 ASP in the domestic market. So this is our expectation in the quarter two ASP. And as to the gross margin recovered, as I just explained, that this quarter's gross margin recovered especially from the domestic scooters cost reduction. Since last Q4, we see a dramatic gross margin drop down due to our land assets, motorcycles and mopeds in the domestic market contributed more than 40% of our sales volume, which are -5% gross margin lower than the same year in the recent mile one. And we began to change the smart function platform and also the R&D platform and also the reduction from the raw material. And this quarter we saw the benefit from the cost reduction in the domestic market. And in Q2, we think the gross margin will remain at this level but will change a little bit due to the product mixed in the domestic market. But we will not go back to lower than 15% as last year showing the figures. This is the gross margin and the ASP for this year's explanation.

Thank you very much. That's all my questions.

Thank you. Once again, if you wish to ask a question, please press star 1, 1 on your telephone. We will take our next question. And the question comes from the line of Michael Simmons from Global View FA. Please go ahead. Your line is open.

Thank you. Yes, it's Michael here, Michael Simmons. Hey, Dr. Lee, perhaps I can just ask you a little bit about the balance sheet. I think it's the cash position has kind of come down a little bit. Given what you've just been talking about, and it sounds like the second quarter's looking quite good, how do you think the cash position, the net cash position is going to look at the end of the year?

Well, actually, each year, quarter one, the cash position is the lowest. Since it's the Chinese New Year, we need to clear up all the advance to the suppliers, the accounts payable, and also the notes payable to the bank. So if you're looking back to 2024 and 2023 each year, the fourth quarter's cash balance is the lowest during the whole year. But at the end of this year, 2025, actually, we expected the cash position will grow up starting from quarter two. Since the peak season, both in the domestic market and the overseas markets is coming, and we give a high-speed sales volume increase aligned with the revenue increase. And this brought us the operating cash flow inflow starting from quarter two. And we didn't expect a large payback for the for the furniture and equipment and also the stores opened. So overall, we think the cash position at the end of this year will be higher than the end of December 31 in 2024.

Great. Thank you.

Thank you. We will take our next question. Your next question comes from the line of Zeyan Wanyan from Seville Capital. Please go ahead. Your line is open.

Okay. This is Daniel from Seville Capital, and I have only one question regarding overseas business. As we know that white scooter revenue has been negatively impacted by electric motorcycle sales has shown growth, how should we interpret the growth rate target for overseas operations under these circumstances? Thank you.

I think for the overseas growth rate, we remain to be, we haven't really changed through our forecast for this year. I think even at the last quarter when we talked about the last year results and even the forecast of this year, we know that our electric tool or the electric motorcycle market, the growth rate will be quite high because they start with actually, you know, last year we only did about 3,000 plus units of electric motorcycles. And then during our peak time, we actually did a, close to, you know, way above 20,000 units. So we look at, you know, that, you know, the starting from 3,000 units last year, we look at a fast, really a hyper growth this year, looking at somewhere at least 5x to 6x growth on the electric motorcycle side. On the, on the, the, which, you know, on the Q1, quarter one, we already see a 3x growth there. On the micro mobility, this is basically the kick scooters. So we, the US tariff really started impact us last year when, you know, our tariff actually increased to 25% on May 30, post May 31st last year. So that already had the impact on our kick scooter business. So we actually start to relocating the manufacturing base from China to Southeast Asia to try to cope with that 25% tariff, where back then in Southeast Asia, it was a 0% tariff. So, I mean, this quarter, Q1 this year, you know, we see, you know, basically this tariff goes, even the Southeast Asia tariff went up to 10%, but the China tariff actually went up significantly. So we actually consciously made adjustments saying by holding off the sales for the US market. But you look at the entire year, I think the demand there with our Southeast Asia manufacturing base in place, also with how we negotiate the price increase with the key US retailers like Best Buy, Walmart, you know, I think we should be able to see that business goes as normal as what we expected at the beginning of the year. But overall, I think with the micro mobility, both on the US, Europe, I think our key three footprint are US market, well, the entire North American market, basically US and Canada, and also the European market, as well as some of the South, the Australian market, New Zealand market. You know, we expect moderate growth, we don't expect that business grow at 2x or something, we really expect a simple double digit growth. And with the key goal is actually a turnaround in the profitability. I think if you look at this two international market segment, with the electric motorcycle, I think it's a hyper growth with a high profitability contribution. And on the kick scooter, micro mobility market, you really should expect moderate growth, but with the key focus on turning around from a profit loss to a profitability business unit.

Thank you.

There seems to be no further questions. I would like to hand back for closing remarks.

All right. Thank you, operator. And thank you all for participating on today's call and for your

support. We appreciate your interest. I'm looking forward to reporting to you again next quarter on our program. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.