Niu Technologies Q1 FY2025 earnings call

• Product Launches: Launched various models including NX Pro, NL, FX series in China, and integrated technologies into electric bicycle lineup. Partnered with Game for Peace for marketing and developed safety warning systems.
• Channel Expansion: Opened about 384 new stores in Q1, focusing on tier three and four cities, and strengthened online presence with 10,000 live broadcasts generating 430 million views.
• Brand Influence: Enhanced brand presence among premium consumers and Gen Z riders through partnerships and advertising campaigns.
• Technology Developments: Implemented data-driven dynamic safety warning system and continued R&D on product platforms.

In the first quarter of 2025, Niu Technologies achieved a total sales volume of 203,000 units, with a 57.4% year-over-year growth. Total revenue reached RMB682 million, up 35% year-over-year. China market sales volume was 183,000 units, contributing RMB608 million (89% of total revenue). Overseas market sales volume was 20,000 units, contributing RMB74 million (11% of total revenue). The gross margin rebounded to 17.3%, with domestic market gross margin improving due to cost reduction initiatives, while overseas kick scooters margins were dragged down by factors like U.S. tariffs, freight costs, and aged inventory write-downs.

• Expected Q2 revenue to be in the range of RMB1.3 billion to RMB1.4 billion, a 40%-50% year-over-year increase.
• Anticipate gross margin recovery and profitability turnaround in the second half of 2025 for U.S. micro-mobility market.
• Expect ASP to stabilize and rebound in subsequent quarters, with gross margin remaining at current levels but slightly fluctuating due to product mix.

• Overseas micro-mobility market impacted by tariffs, inventory clear-out in Europe, and uncertainties in U.S. tariff situation.
• Aged inventory write-downs and elevated freight costs affecting overseas kick scooters margins.

Q: About sales volume guidance and margin outlook for upcoming quarters.

A: Yan Li stated the annual volume guidance remains unchanged. Fion Zhou mentioned annual gross margin will recover from 15% and second quarter net profit is expected to turn positive.

Q: Why average selling price decreased in Q1 and outlook for subsequent quarters.

A: Fion Zhou explained ASP dropped due to new model launches, but will smooth in subsequent quarters with ASP remaining almost same or changing slightly, and expected to rebound in Q2.

Q: Regarding overseas business, why scooter revenue impacted by tariffs and growth rate target.

A: Yan Li explained U.S. tariffs impacted scooter business, but electric motorcycle sales have strong growth with hyper growth expected this year, and micro-mobility market expected to have moderate growth with focus on turning around profitability.