Niu Technologies

Good day, ladies and gentlemen. Thank you for standing by and welcome to the NEHOR Technologies First Quarter 2025 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 Ms. Crystal Lee, Investor Relations Manager of Nehorn Technologies. Ms. Lee, please go ahead.

Thank you, Operator. Hello, everyone. Welcome to today's conference call to discuss new technologies resolved for the first quarter of 2025. The earnings press release, corporate presentation, and financial spreadsheet have been posted on our Investor Relations website. This call is being webcapped 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 Securities Education Reform Act of 1995. Forward-looking statements invoke 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 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 a discussion 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, Mi-Psiang 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, will achieve a total sales volume of 203,000 units, marking a significant 57.4% year-on-year growth. Behind its strong performance was a 66% year-on-year increase in the sales volume in the China market and a 6.4% year-on-year growth in the overseas market. Total revenue for the first quarter reached to RMB 682 million, reflecting a 35% increase compared with the same period last year. The gross margin rebounded to 17.3%, with 4.9% year-over-year increase, primarily driven by the pump cost reduction, product 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 and revenue growth, as well as the 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 emphasized 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, M, and U and F series. We enhanced our existing products through upgrading and refining our product portfolio, which led to an optimized product mix and offered our customers an even more enjoyable riding experience. Additionally, we stepped up our motorcycle offerings and introduced models like NX, NL, and FX. The expansion diversified our electric motorcycle range and helped to broaden our sales channel. First, we successfully launched a comprehensive range of electric motorcycles, including the MX, ML, and FX series, spanning price range 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 standard. 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 two-wheeler sector. To delve into the details of each product, on March 21st, we first launched the NX Pro motorcycle, priced at RMB 9,999, positioning it as the speed champion among the sub-10,000 RMB electric motorcycles. It's equipped with 72V, 42Ah high-energy DTM battery, offering a range of over 90km on one charge. Powered by a motor with a peak power of 6kW under Boost mode, it hits the top speed of 80km per hour and accelerates from 0 to 50 in just 5.4 seconds. The 8Ah Intelligent Fast Charging System allows for full charge 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 day. This model has established itself as a pioneer in the high-end two-wheel motorcycle market, reinforced news 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 upgrades include an enlarged footboard, extended seats, and expanded storage compartment. It comes equipped with advanced intelligent features such as full-color display, TFT display with a screen measuring navigation, as well as OK Go and Go ZZ technologies. Powered by a 2,000-watt peak power motor, the NL reaches a top speed of 35 kilometers per hour and includes a TCS as the standard features. Priced at RMB 4,799, the NL offers a compelling combination of performance, market technology, and affordability. We also expand our S series with the FX Pro, FX Sports, and FX CD, completing the S series product lineup on the motorcycle side. With their aggressive design, those models now come with enhanced features, such as full-color TFT display, expanded battery compartments, offering options of 72-volt 42mAh lithium batteries or 72-volt 35mAh 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 a magic wheel, which significantly enhance playability and ease of operation, establishing F-Series as a performance powerhouse. We launched F-Series on May 13th across platforms such as Tmall, JD, and DOE, and this series is set to start 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 start with the popular signature electric bicycle models such as NXT, NLT, MT, and MMT. Those approach bring a premium electric motorcycle experience to the electric bicycle categories. The NXT launch on March 21st stands out as the first left-axis electric bicycle equipped with dual-channel ABS, a 12-inch full-disc motor, and a standard boost launch mode. The NXT seamlessly incorporates top-tier electric motorcycle features. Those investments have made a highly favored 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 Gopi Go systems, making it especially suitable for female users seeking convenience and style. The MMT, a smaller model, embraced the iconic M-Series design with fresh, colorful aesthetics and a comfortable riding experience tailored to a diverse preference of Gen Z female users. As a 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 search Strategical emphasis on standardizing those key product platforms has shown a sign of progress. They enhance our R&D process and also reduce our bump cost, 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 and smart technologies, such as a full-function 5-inch TFT display, the Magic Wheel, all those focusing on stimulus driving experience, AI smart control assistance, and AI smart ecosystem features. Also, in terms of driving safety, we have partnered with Galdo Maps to develop an industry-pioneered data-driven dynamic safety warning system. The system's forcibly advanced functionalities include one-spot warning, a rear vehicle approach warning, and AI piloted traffic light navigation. This has already been implemented in our new NX-NXT models, with a more advanced feature to be released in Q2 and Q3 this year. We're aiming at a significantly enhanced writing safety and uplifting overall writing experience for our customers. Now, in the last quarter, we also continued 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 a new cup-raising 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 and 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 the volume of Lastly, in terms of channel expansion, we continue our previous strategy, which focused on penetrating the previous underrepresented market in China, strategically expanding our retail footprint to ensure our product reaching 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 the new opening stores. This strategic expansion refined our distribution network and also paved the way for upcoming launch of electric motorcycle products in Q2. Additionally, our online presence has been strengthened with sales improvement across multiple online channels, such as our official brand accounts, the regional localized accounts, 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 about 100,000 units of sales, representing 60% of our total sales volume. Now let me turn you to 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 mopeds and electric motorcycles. The electric two-wheeler market achieved an over 3x increase due to the readiness we put in place on the direct distribution operation in key countries such as Germany, Italy, and France. And those direct operations contributed more than 50% sales in Q1. Now with the logistics financing CRM system, also the on-the-ground team, we have really built the operation in those key countries and accelerated internet network expansions. By end of Q1 2025, the number of dealers in those direct distributed regions have increased from 120 to 180 dealers. with projection to reach about 250 dealers by mid-2025, exceeding our initial forecast. We have also introduced a full line of electric two-wheeler products, mainly from 50cc equivalent L1E models to 125cc equivalent L3E models, as well as the off-road motorcycles. Those products price between €2,000 to €4,600 catering to a diverse consumer needs. Now the first batch of new product 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-up of electric tooler products, specifically electric motorcycles, multi-type operator motorcycles, and also the direct distribution operation in place, We anticipate exponential sales growth targeting the 3 to 5x increase in 2025, with Q1 as the 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% sales will contribute significantly to our profitability turnaround in the international market. Now for the micromobility market for the international market, such as the kick scooters and also the e-bikes, Q1 2025 is the 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 out of outdated inventories, hence have impact of gross margin and profitability. Those other inventory impacts will continue partially into Q2, but we expect to minimize those by the second half of this year. Now, in the U.S., due to the uncertainties around the tariff situation, we deliberately hold back the sales of existing inventories in the U.S. market in Q1 for more clarity. We have implemented price increases in online channels in Q1 and negotiated with offline channels for price increases to be effected in late Q2 and early Q3. Now, for the supplies to the US market, our manufacturing in Southeast Asia have already dispatched our first deliveries in late Q1 2025, taking advantage of the 10% tariff window. The ship product has not been reflected in the sales yet.