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Niu Technologies Announces Second Quarter 2023 Financial Results

-- Second Quarter Total Volume of e-scooter sales up 1.5% year over year

-- Second Quarter Revenues of RMB 828.8 million, up 0.1% year over year

-- Second Quarter Net Loss of RMB 1.9 million, compared to net income of RMB 14.4 million in the same period of last year

BEIJING, Aug. 14, 2023 (GLOBE NEWSWIRE) -- Niu Technologies (“NIU”, or “the Company”) (NASDAQ: NIU), the world’s leading provider of smart urban mobility solutions, today announced its financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights

  • Revenues were RMB 828.8 million, an increase of 0.1% year over year
  • Gross margin was 23.1%, compared with 20.3% in the second quarter of last year
  • Net loss was RMB 1.9 million, compared with net income of RMB 14.4 million in the second quarter of last year
  • Adjusted net income (non-GAAP)1 was RMB 14.4 million, compared with adjusted net income of RMB 31.2 million in the second quarter of last year

Second Quarter 2023 Operating Highlights

  • The number of e-scooters sold was 211,996, up 1.5% year over year
  • The number of e-scooters sold in China was 178,567, down 1.0% year over year
  • The number of e-scooters sold in the international markets was 33,429, up 17.1% year over year
  • The number of franchised stores in China was 2,844 as of June 30, 2023
  • International sales network expanded to 55 distributors covering 53 countries as of June 30, 2023

Other Highlights

On August 14, 2023, the Company released its 2022 Environment, Social and Governance (ESG) Report (https://ir.niu.com/environmental-social-and-governance-report-0), highlighting the Company’s ESG policies and sustainability initiatives.

Dr. Yan Li, Chief Executive Officer of the Company, commented: “In the second quarter of 2023, the launch of our new products has generated immense excitement in the market, setting an excellent foundation for continuous sales growth. The MQiL model has swiftly won over users with its outstanding performance, contributing to one-third of our domestic sales. The GOVA G400/G400T model has also received widespread market recognition for its practicality and cost-effectiveness. In the micro-mobility sector, kick-scooters also achieved stable growth in the second quarter. We firmly believe that our unwavering commitment to innovation will greatly resonate with our valued customers, and our enriched product portfolio will lay a strong foundation for our future sustainable growth.”

Second Quarter 2023 Financial Results

Revenues were RMB 828.8 million, an increase of 0.1% year over year, due to increased sales volume of 1.5%, partially offset by decreased revenues per e-scooter of 1.3%. The following table shows the revenues breakdown and revenues per e-scooter in the periods presented:

Revenues
(in RMB million)
 2023
Q2
 2022
Q2
 % change
YoY
E-scooter sales from China market 638.7 596.6 +7.1%
E-scooter sales from international markets 114.7 146.3 -21.6%
E-scooter sales, sub-total 753.4 742.9 +1.4%
Accessories, spare parts and services 75.4 84.7 -11.0%
Total 828.8 827.6 +0.1%


Revenues per e-scooter
(in RMB)
 2023
Q2
 2022
Q2
 % change
YoY
E-scooter sales from China market2 3,577 3,309 +8.1%
E-scooter sales from international markets2 3,430 5,122 -33.0%
E-scooter sales 3,554 3,557 -0.1%
Accessories, spare parts and services3 356 406 -12.3%
Revenues per e-scooter 3,910 3,963 -1.3%


  • E-scooter sales revenues from China market were RMB 638.7 million, an increase of 7.1%, and represented 84.8% of total e-scooter revenues. The increase was mainly driven by the strategic optimization of our premium product mix, offsetting the slight decline in sales volume in China market.
  • E-scooter sales revenues from international markets were RMB 114.7 million, a decrease of 21.6%, and represented 15.2% of total e-scooter revenues. The decrease was mainly due to the decline in sales of e-motorcycles and e-mopeds, partially offset by increased sales of kick-scooter in international markets.
  • Accessories, spare parts sales and services revenues were RMB 75.4 million, a decrease of 11.0% and represented 9.1% of total revenues. The decrease was mainly driven by the overseas battery pack sales reduction.
  • Revenues per e-scooter slightly decreased by 1.3% year over year, was mainly due to the increased proportion of kick-scooter in international markets, partially offset by the increased revenues per e-scooter in China market.

Cost of revenues was RMB 637.3 million, a decrease of 3.4% year over year, mainly due to decreased cost per e-scooter. The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, was RMB 3,006, down 4.9% from RMB 3,160 in the second quarter 2022, mainly due to the increased proportion of kick-scooter, and the decreased cost of battery packs.

Gross margin was 23.1%, compared with 20.3% in the same period of 2022. The increase was mainly due to the strategic optimization of our premium product mix and the increased revenues per e-scooter in China market.

Operating expenses were RMB 198.8 million, an increase of 14.9% from the same period of 2022. Operating expenses as a percentage of revenues was 24.0%, compared with 20.9% in the second quarter of 2022.

  • Selling and marketing expenses were RMB 109.5 million (including RMB 2.7 million of share-based compensation), an increase of 18.4% from RMB 92.5 million in the second quarter of 2022, mainly due to an increase of RMB 15.8 million in selling and marketing expenses for continuous micro-mobility expansion in international markets. Selling and marketing expenses as a percentage of revenues was 13.2% compared with 11.2% in the second quarter of 2022.
  • Research and development expenses were RMB 41.3 million (including RMB 8.7 million of share-based compensation), a decrease of 7.1% from RMB 44.5 million in the second quarter of 2022, mainly due to the decrease of staff cost of RMB 2.1 million, and the decrease in system development professional fee of RMB 1.7 million. Research and development expenses as a percentage of revenues was 5.0%, compared with 5.4% in the second quarter of 2022.
  • General and administrative expenses were RMB 48.0 million (including RMB 4.5 million of share-based compensation), an increase of 33.2% from RMB 36.0 million in the second quarter of 2022, mainly due to the increase in provision for credit losses of RMB 27.1 million, partially offset by the increase in foreign currency exchange gain of RMB 8.2 million and the decrease in staff cost of RMB 2.6 million. General and administrative expenses as a percentage of revenues was 5.8%, compared with 4.4% in the second quarter of 2022.

Operating expenses excluding share-based compensation were RMB 182.8 million, increased by 16.8% year over year, and represented 22.1% of revenues, compared with 18.9% in the second quarter of 2022.

  • Selling and marketing expenses excluding share-based compensation were RMB 106.8 million, an increase of 21.3% year over year, and represented 12.9% of revenues, compared with 10.6% in the second quarter of 2022.
  • Research and development expenses excluding share-based compensation were RMB 32.6 million, a decrease of 13.1% year over year, and represented 3.9% of revenues, compared with 4.5% in the second quarter of 2022.
  • General and administrative expenses excluding share-based compensation were RMB 43.5 million, an increase of 40.4% year over year, and represented 5.2% of revenues, compared with 3.7% in the second quarter of 2022.

Government grants were RMB 0.5 million, compared with RMB 0.3 million in the same period of 2022.

Share-based compensation was RMB 16.3 million, compared with RMB 16.8 million in the same period of 2022.

Income tax expense was RMB 2.2 million, compared with income tax benefit of RMB 16.8 million in the same period of 2022.

Net loss was RMB 1.9 million, compared with net income of RMB 14.4 million in the second quarter of 2022. The net loss margin was 0.2%, compared with net income margin of 1.7% in the same period of 2022.

Adjusted net income (non-GAAP) was RMB 14.4 million, compared with RMB 31.2 million in the second quarter of 2022. The adjusted net income margin4 was 1.7%, compared with 3.8% in the same period of 2022.

Basic and diluted net loss per ADS were both RMB 0.02 (US$ 0.00).

Balance Sheet
As of June 30, 2023, the Company had cash, term deposits and short-term investments of RMB 1,022.2 million in aggregate. The Company had restricted cash of RMB 109.7 million and short-term bank borrowings of RMB 41.4 million.

Business Outlook
NIU expects revenues of the third quarter 2023 to be in the range of RMB 1,153 million to RMB 1,326 million, representing a year-over-year increase of 0% to 15%.

The above outlook is based on information available as of the date of this press release and reflects the Company’s current and preliminary expectation and is subject to change.

Conference Call

The Company will host an earnings conference call on Monday, August 14, 2023 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time) to discuss its second quarter 2023 financial and business results and provide a corporate update.

To join via phone, participants need to register in advance of the conference call using the link provided below. Upon registration, participants will receive dial-in numbers and a personal PIN, which will be used to join the conference call.

Event:Niu Technologies Second Quarter 2023 Earnings Conference Call
Registration Link:https://register.vevent.com/register/BI95dd3f9ebb7b4a3e9c09ef252ea3fbbd


A live and archived webcast of the conference call will be available on the investor relations website at https://ir.niu.com/news-and-events/webcasts-and-presentations.

About NIU

As the world’s leading provider of smart urban mobility solutions, NIU designs, manufactures and sells high-performance electric motorcycles, mopeds, bicycles and kick-scooters. NIU has a diversified product portfolio that caters to the various demands of our users and addresses different urban travel scenarios. NIU’s product portfolio comprises its (i) six electric scooter and motorcycle series, RQi, NQi, MQi, SQi, UQi, and Gova, and (ii) two micro-mobility series, including kick-scooter series, KQi, and e-bike series, BQi. NIU has adopted an omnichannel retail model, integrating the offline and online channels, to sell its products and provide services. For more information, please visit www.niu.com.

Use of Non-GAAP Financial Measures

To supplement NIU’s consolidated financial results presented in accordance with the accounting principles generally accepted in the United States of America (“GAAP”), NIU uses the following non-GAAP financial measures: adjusted net income and adjusted net income margin. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. NIU believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its operating results. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to NIU’s historical performance. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.

Adjusted net income is defined as net income excluding share-based compensation expenses. Adjusted net income margin is defined as adjusted net income as a percentage of the revenues.

For more information on non-GAAP financial measures, please see the tables captioned “Reconciliation of GAAP and Non-GAAP Results”.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the readers. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB 7.2513 to US$ 1.00, the exchange rate in effect as of June 30, 2023, as set forth in the H.10 Statistical release of the Board of Governors of the Federal Reserve System. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as NIU’s strategic and operational plans, contain forward-looking statements. NIU may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about NIU’s beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: NIU’s strategies; NIU’s future business development, financial condition and results of operations; NIU’s ability to maintain and enhance its “NIU” brand; its ability to innovate and successfully launch new products and services; its ability to maintain and expand its offline distribution network; its ability to satisfy the mandated safety standards relating to e-scooters; its ability to secure supply of components and raw materials used in e-scooters; its ability to manufacture, launch and sell smart e-scooters meeting customer expectations; its ability to grow collaboration with operation partners; its ability to control costs associated with its operations; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in NIU’s filings with the Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and NIU does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact:

Niu Technologies
E-mail: ir@niu.com

 
NIU TECHNOLOGIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
      
 As of
 December 31, June 30, June 30,
 2022 2023 2023
  RMB   RMB  US$
ASSETS     
Current assets     
Cash534,286,849  692,435,543  95,491,228 
Term deposits-current208,589,770  329,777,789  45,478,437 
Restricted cash186,340,321  109,694,119  15,127,511 
Short-term investments160,406,301  - - 
Accounts receivable, net299,742,923  229,211,007  31,609,643 
Inventories417,009,148  382,782,068  52,788,061 
Prepayments and other current assets205,695,717  186,172,017  25,674,295 
Total current assets 2,012,071,029    1,930,072,543    266,169,175  
      
Non-current assets     
Term deposits-non-current20,000,000  -  - 
Property, plant and equipment, net397,356,795  353,555,644  48,757,553 
Intangible assets, net1,857,320  1,442,531  198,934 
Operating lease right-of-use assets86,597,121  83,159,936  11,468,280 
Deferred income tax assets6,132,499  7,041,642  971,087 
Other non-current assets12,683,090  9,999,219  1,378,955 
Total non-current assets 524,626,825    455,198,972    62,774,809  
      
Total assets 2,536,697,854    2,385,271,515    328,943,984  
      
LIABILITIES     
Current liabilities     
Short-term bank borrowings160,000,000  41,380,805  5,706,674 
Notes payable316,832,113  233,871,486  32,252,353 
Accounts payable459,466,937  527,937,739  72,805,944 
Income taxes payable1,898,065  2,591,226  357,346 
Advances from customers24,931,897  20,082,951  2,769,566 
Deferred revenue-current37,539,733  39,252,758  5,413,203 
Accrued expenses and other current liabilities192,092,943  198,845,613  27,422,062 
Total current liabilities 1,192,761,688    1,063,962,578    146,727,148  
      
Deferred revenue-non-current11,429,500  12,072,708  1,664,903 
Deferred income tax liabilities1,398,279  1,928,894  266,007 
Operating lease liabilities7,569,128  4,245,744  585,515 
Other non-current liabilities13,441,382  9,293,459  1,281,627 
Total non-current liabilities 33,838,289    27,540,805    3,798,052  
      
Total liabilities 1,226,599,977    1,091,503,383    150,525,200  
      
SHAREHOLDERS’ EQUITY:     
Class A ordinary shares89,428  89,803  12,384 
Class B ordinary shares10,316  10,316  1,423 
Additional paid-in capital1,915,825,641  1,946,596,857  268,447,983 
Accumulated other comprehensive loss(16,536,686) (1,394,278) (192,280)
Accumulated deficit(589,290,822) (651,534,566) (89,850,726)
Total shareholders’ equity 1,310,097,877    1,293,768,132    178,418,784  
      
Total liabilities and shareholders’ equity 2,536,697,854    2,385,271,515    328,943,984  


 
NIU TECHNOLOGIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
          
 Three Months Ended June 30, Six Months Ended June 30,
 2022 2023 2022 2023
 RMB RMBUS$ RMB RMBUS$
Revenues827,619,915  828,811,204 114,298,292  1,403,097,817  1,246,047,222 171,837,770 
Cost of revenues(a)(659,994,763) (637,333,754)(87,892,344) (1,125,788,331) (964,195,614)(132,968,656)
Gross profit 167,625,152    191,477,450   26,405,948    277,309,486    281,851,608   38,869,114  
          
Operating expenses:         
Selling and marketing expenses(a)(92,531,147) (109,541,946)(15,106,525) (162,578,383) (181,902,025)(25,085,436)
Research and development expenses(a)(44,450,826) (41,288,064)(5,693,884) (86,299,410) (76,292,198)(10,521,175)
General and administrative expenses(a)(36,024,525) (47,976,084)(6,616,205) (67,084,960) (98,300,734)(13,556,291)
Total operating expenses (173,006,498)  (198,806,094) (27,416,614)  (315,962,753)  (356,494,957) (49,162,902)
Government grants254,668  528,120 72,831  523,038  826,973 114,045 
Operating income (loss) (5,126,678)  (6,800,524) (937,835)  (38,130,229)  (73,816,376) (10,179,743)
          
Interest expenses(1,464,438) (14,853)(2,048) (2,918,902) (81,520)(11,242)
Interest income925,854  7,150,433 986,090  2,109,777  15,262,816 2,104,839 
Investment income3,248,458  - -  8,295,350  426,836 58,863 
Income (loss) before income taxes (2,416,804)  335,056   46,207    (30,644,004)  (58,208,244) (8,027,283)
Income tax benefit (expense)16,779,140  (2,240,676)(309,003) 15,430,095  (4,035,500)(556,521)
Net income (loss) 14,362,336    (1,905,620) (262,796)  (15,213,909)  (62,243,744) (8,583,804)
          
Other comprehensive income (loss)         
Foreign currency translation adjustment, net of nil income taxes23,106,426  21,181,014 2,920,995  21,412,240  15,487,764 2,135,860 
Unrealized gain on available-for-sale securities, net of reclassification(87,078) - -  (2,467,270) (345,356)(47,627)
Comprehensive income 37,381,684    19,275,394   2,658,199    3,731,061    (47,101,336) (6,495,571)
Net income (loss) per ordinary share         
—Basic0.09  (0.01)(0.00) (0.10) (0.40)(0.05)
—Diluted0.09  (0.01)(0.00) (0.10) (0.40)(0.05)
Net income (loss) per ADS         
—Basic0.19  (0.02)(0.00) (0.20) (0.80)(0.11)
—Diluted0.18  (0.02)(0.00) (0.20) (0.80)(0.11)
          
Weighted average number of ordinary shares and ordinary shares equivalents outstanding used in computing net income (loss) per ordinary share
—Basic155,223,662  156,834,747 156,834,747  154,887,972  156,303,739 156,303,739 
—Diluted157,998,918  156,834,747 156,834,747  154,887,972  156,303,739 156,303,739 
Weighted average number of ADS outstanding used in computing net income (loss) per ADS
—Basic77,611,831  78,417,374 78,417,374  77,443,986  78,151,870 78,151,870 
—Diluted78,999,459  78,417,374 78,417,374  77,443,986  78,151,870 78,151,870 
          
Note:         
(a) Includes share-based compensation expense as follows: 
 Three Months Ended June 30, Six Months Ended June 30,
 2022  2023
 2022  2023 
 RMB RMBUS$ RMB RMBUS$
Cost of revenues307,095  300,533 41,445  593,072  591,520 81,574 
Selling and marketing expenses4,421,095  2,705,325 373,081  8,338,551  5,833,402 804,463 
Research and development expenses6,988,758  8,734,735 1,204,575  11,906,652  15,105,360 2,083,124 
General and administrative expenses5,076,711  4,525,669 624,118  9,199,001  8,928,193 1,231,254 
Total share-based compensation expense 16,793,659    16,266,262   2,243,219    30,037,276    30,458,475   4,200,415  


 
NIU TECHNOLOGIES
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
          
 Three Months Ended June 30, Six Months Ended June 30,
 2022 2023 2022 2023
 RMB  RMB US$ RMB  RMB US$
Net Income (loss) 14,362,336   (1,905,620) (262,796)  (15,213,909)  (62,243,744) (8,583,804)
Add:         
Share-based compensation expense16,793,659 16,266,262 2,243,219  30,037,276  30,458,475 4,200,415 
Adjusted net income (loss) 31,155,995   14,360,642   1,980,423    14,823,367    (31,785,269) (4,383,389)

_____________________________________

1 Adjusted net income (non-GAAP) is defined as net loss excluding share-based compensation expense
2 Revenues per e-scooter on e-scooter sales from China or international markets is defined as e-scooter sales revenues from China or international markets divided by the number of e-scooters sold in China or international market in a specific period
3 Revenues per e-scooter on accessories, spare parts and services is defined as accessories, spare parts and services revenues divided by the total number of e-scooters sold in a specific period
4 Adjusted net income margin is defined as adjusted net income (non-GAAP) as a percentage of the revenues


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