EX-99.1 2 tm2331134d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1 

 

 

 

Niu Technologies Announces Third Quarter 2023 Financial Results

 

-- Third Quarter Total Volume of e-scooter sales down 17.1% year over year

 

-- Third Quarter Revenues of RMB 927.0 million, down 19.6% year over year

 

-- Third Quarter Net Loss of RMB 79.4 million, compared to Net Income of RMB 2.9 million in the same period of last year

 

BEIJING, China, November 20, 2023 – 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 third quarter ended September 30, 2023.

 

Third Quarter 2023 Financial Highlights

 

·Revenues were RMB 927.0 million, a decrease of 19.6% year over year

·Gross margin was 21.4%, compared with 22.1% in the third quarter of last year

·Net loss was RMB 79.4 million, compared with net income of RMB 2.9 million in the third quarter of last year

·Adjusted net loss (non-GAAP)1 was RMB 70.0 million, compared with adjusted net income of RMB 20.2 million in the third quarter of last year

 

Third Quarter 2023 Operating Highlights

 

·The number of e-scooters sold was 265,923, down 17.1% year over year

·The number of e-scooters sold in China was 230,455, down 12.4% year over year

·The number of e-scooters sold in the international markets was 35,468, down 38.4% year over year

·The number of franchised stores in China was 2,834 as of September 30, 2023

·International sales network expanded to 55 distributors covering 53 countries as of September 30, 2023

 

Other Highlights

 

Dr. Yan Li, Chief Executive Officer of the Company, commented: “The conservative spending behavior of Chinese consumers has impacted the demand for our premium series products. However, we have swiftly re-positioned our products into two distinct market segments: premium market and mass-premium market. During the third quarter, we witnessed robust demand in the mass-premium market, and our newly launched products in this segment have been well-received by customers. However, this strategic shift will take some time to fully materialize into increased sales.

 

 

1 Adjusted net income (loss) (non-GAAP) is defined as net income (loss) excluding share-based compensation expenses 

 

 

 

 

 

 

Our newly introduced carbon fiber kick-scooter has greatly bolstered our KQi series, while also laying a solid foundation for our global expansion. As the micro-mobility category continues to gain momentum in international markets, our enriched product portfolio will position NIU well for sustainable long-term growth in the future.”

 

Third Quarter 2023 Financial Results

 

Revenues were RMB 927.0 million, a decrease of 19.6% year over year, due to decreased sales volume of 17.1%, and decreased revenues per e-scooter of 3.0%. The following table shows the revenues breakdown and revenues per e-scooter in the periods presented:

 

Revenues

(in RMB million)

 

2023

Q3

  

2022

Q3

  

% change

YoY

 
E-scooter sales from China market   710.9    859.2    -17.3%
E-scooter sales from international markets   121.7    195.1    -37.6%
E-scooter sales, sub-total   832.6    1,054.3    -21.0%
Accessories, spare parts and services   94.4    98.9    -4.5%
Total   927.0    1,153.2    -19.6%

 

Revenues per e-scooter

(in RMB)

 

2023

Q3

  

2022

Q3

  

% change

YoY

 
E-scooter sales from China market2   3,085    3,265    -5.5%
E-scooter sales from international markets2   3,430    3,386    +1.3%
E-scooter sales   3,131    3,287    -4.7%
Accessories, spare parts and services3   355    308    +15.3%
Revenues per e-scooter   3,486    3,595    -3.0%

 

§E-scooter sales revenues from China market were RMB 710.9 million, a decrease of 17.3%, and represented 85.4% of total e-scooter revenues. The decrease was mainly due to the decline in sales volume of premium series, partially offset by the increased sales volume and revenues of mass-premium series in China market.

§E-scooter sales revenues from international markets were RMB 121.7 million, a decrease of 37.6%, and represented 14.6% of total e-scooter revenues. The decrease was mainly due to the decline in sales volume in international markets.

§Accessories, spare parts sales and services revenues were RMB 94.4 million, a decrease of 4.5% and represented 10.2% of total revenues. The decrease was mainly due to the overseas battery pack sales reduction.

§Revenues per e-scooter decreased by 3.0% year over year, was mainly due to the increased proportion of mass-premium series in China market, partially offset by the increased revenues per e-scooter in international markets.

 

 

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 markets 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 

 

 

 

 

 

 

Cost of revenues was RMB 729.1 million, a decrease of 18.8% year over year, mainly due to the decline in sales volume. The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, was RMB 2,742, down 2.1% from RMB 2,800 in the third quarter 2022, mainly due to the decreased cost of battery packs and the increased proportion of mass-premium series in China market.

 

Gross margin was 21.4%, compared with 22.1% in the same period of 2022. The decrease was mainly due to the increased proportion of mass-premium series in China market, and the decline in sales volume of e-motorcycles and e-mopeds in international markets.

 

Operating expenses were RMB 288.5 million, an increase of 9.4% from the same period of 2022. Operating expenses as a percentage of revenues was 31.1%, compared with 22.9% in the third quarter of 2022.

 

§Selling and marketing expenses were RMB 122.7 million (including RMB 2.4 million of share-based compensation), a decrease of 28.0% from RMB 170.4 million in the third quarter of 2022, mainly due to a decrease of RMB 59.2 million in advertising and promotion activities. Selling and marketing expenses as a percentage of revenues was 13.2% compared with 14.8% in the third quarter of 2022.

§Research and development expenses were RMB 39.1 million (including RMB 3.6 million of share-based compensation), a decrease of 21.6% from RMB 49.8 million in the third quarter of 2022, mainly due to the decrease in share-based compensation expenses of RMB 3.7 million, the decrease in staff cost of RMB 2.7 million, and the decrease in design expense and system development professional fee of RMB 3.3 million. Research and development expenses as a percentage of revenues was 4.2%, compared with 4.3% in the third quarter of 2022.

§General and administrative expenses were RMB 126.8 million (including RMB 3.2 million of share-based compensation), an increase of 190.9% from RMB 43.6 million in the third quarter of 2022, mainly due to the increase in provision for credit losses of RMB 88.0 million, partially offset by the decrease in staff cost of RMB 2.6 million and the decrease in share-based compensation expenses of RMB 2.1 million. General and administrative expenses as a percentage of revenues was 13.7%, compared with 3.8% in the third quarter of 2022.

 

Operating expenses excluding share-based compensation were RMB 279.4 million, increased by 13.2% year over year, and represented 30.1% of revenues, compared with 21.4% in the third quarter of 2022.

 

§Selling and marketing expenses excluding share-based compensation were RMB 120.3 million, a decrease of 27.5% year over year, and represented 13.0% of revenues, compared with 14.4% in the third quarter of 2022.

§Research and development expenses excluding share-based compensation were RMB 35.5 million, a decrease of 16.6% year over year, and represented 3.8% of revenues, compared with 3.7% in the third quarter of 2022.

§General and administrative expenses excluding share-based compensation were RMB 123.6 million, an increase of 222.6% year over year, and represented 13.3% of revenues, compared with 3.3% in the third quarter of 2022.

 

 

 

 

 

 

Government grants were RMB 1.1 million, compared with RMB 0.9 million in the same period of 2022.

 

Share-based compensation expenses were RMB 9.5 million, compared with RMB 17.3 million in the same period of 2022.

 

Income tax expense was RMB 0.2 million, compared with income tax benefit of RMB 6.6 million in the same period of 2022.

 

Net loss was RMB 79.4 million, compared with net income of RMB 2.9 million in the third quarter of 2022. The net loss margin was 8.6%, compared with net income margin of 0.3% in the same period of 2022.

 

Adjusted net loss (non-GAAP) was RMB 70.0 million, compared with adjusted net income of RMB 20.2 million in the third quarter of 2022. The adjusted net loss margin4 was 7.5%, compared with adjusted net income margin of 1.7% in the same period of 2022.

 

Basic and diluted net loss per ADS were both RMB 1.01 (US$ 0.14).

 

Balance Sheet

 

As of September 30, 2023, the Company had cash, cash equivalents, term deposits and short-term investments of RMB 1,280.9 million in aggregate. The Company had restricted cash of RMB 109.0 million and short-term bank borrowings of RMB 100.0 million.

 

Business Outlook

 

NIU expects revenues of the fourth quarter 2023 to be in the range of RMB 490 million to RMB 612 million, representing a year-over-year decrease of 20% to 0%.

 

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.

 

 

4 Adjusted net income (loss) margin is defined as adjusted net income (loss) (non-GAAP) as a percentage of the revenues 

 

 

 

 

 

 

Conference Call

 

The Company will host an earnings conference call on Monday, November 20, 2023 at 8:00 AM U.S. Eastern Time (9:00 PM Beijing/Hong Kong Time) to discuss its third 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 Third Quarter 2023 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BI8328e6e1595f495f96469ca37648b8d2

 

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 (loss) and adjusted net income (loss) 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 (loss) is defined as net income (loss) excluding share-based compensation expenses. Adjusted net income (loss) margin is defined as adjusted net income (loss) 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 7.2960 to US$ 1.00, the exchange rate in effect as of September 29, 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,    September 30,    September 30, 
  2022    2023    2023 
  RMB    RMB    US$ 
ASSETS           
Current assets           
Cash and cash equivalents   534,286,849     761,816,056     104,415,578 
Term deposits-current   208,589,770     248,827,920     34,104,704 
Restricted cash   186,340,321     108,995,798     14,939,117 
Short-term investments   160,406,301     270,229,068     37,037,975 
Accounts receivable, net   299,742,923     164,149,449     22,498,554 
Inventories   417,009,148     396,991,280     54,412,182 
Prepayments and other current assets   205,695,717     196,741,111     26,965,613 
Total current assets   2,012,071,029     2,147,750,682     294,373,723 
              
Non-current assets              
Term deposits-non-current   20,000,000     -     - 
Property, plant and equipment, net   397,356,795     343,320,537     47,055,995 
Intangible assets, net   1,857,320     1,375,029     188,463 
Operating lease right-of-use assets   86,597,121     81,456,063     11,164,482 
Deferred income tax assets   6,132,499     7,629,905     1,045,765 
Other non-current assets   12,683,090     12,050,681     1,651,683 
Total non-current assets   524,626,825     445,832,215     61,106,388 
              
Total assets   2,536,697,854     2,593,582,897     355,480,111 
              
LIABILITIES              
Current liabilities              
Short-term bank borrowings   160,000,000     100,000,000     13,706,140 
Notes payable   316,832,113     252,712,933     34,637,189 
Accounts payable   459,466,937     751,393,695     102,987,074 
Income taxes payable   1,898,065     3,060,348     419,456 
Advances from customers   24,931,897     22,428,017     3,074,015 
Deferred revenue-current   37,539,733     42,404,843     5,812,067 
Accrued expenses and other current liabilities   192,092,943     168,619,363     23,111,208 
Total current liabilities   1,192,761,688     1,340,619,199     183,747,149 
              
Deferred revenue-non-current   11,429,500     12,787,438     1,752,664 
Deferred income tax liabilities   1,398,279     3,768,388     516,501 
Operating lease liabilities   7,569,128     2,993,449     410,286 
Other non-current liabilities   13,441,382     12,116,661     1,660,727 
Total non-current liabilities   33,838,289     31,665,936     4,340,178 
              
Total liabilities   1,226,599,977     1,372,285,135     188,087,327 
              
SHAREHOLDERS’ EQUITY:              
Class A ordinary shares   89,428     89,912     12,323 
Class B ordinary shares   10,316     10,316     1,414 
Additional paid-in capital   1,915,825,641     1,956,193,614     268,118,642 
Accumulated other comprehensive loss   (16,536,686)    (4,039,188)    (553,617)
Accumulated deficit   (589,290,822)    (730,956,892)    (100,185,978)
Total shareholders’ equity   1,310,097,877     1,221,297,762     167,392,784 
              
Total liabilities and shareholders’ equity   2,536,697,854     2,593,582,897     355,480,111 

 

 

 

 

 

 

NIU TECHNOLOGIES  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2022   2023   2022   2023 
   RMB   RMB   US$   RMB   RMB   US$ 
Revenues   1,153,228,324    927,022,630    127,059,023    2,556,326,141    2,173,069,852    297,844,004 
Cost of revenues(a)   (898,390,604)   (729,071,439)   (99,927,555)   (2,024,178,935)   (1,693,267,053)   (232,081,559)
Gross profit   254,837,720    197,951,191    27,131,468    532,147,206    479,802,799    65,762,445 
                               
Operating expenses:                              
Selling and marketing expenses(a)   (170,366,673)   (122,663,357)   (16,812,412)   (332,945,056)   (304,565,382)   (41,744,159)
Research and development expenses(a)   (49,836,811)   (39,059,530)   (5,353,554)   (136,136,221)   (115,351,728)   (15,810,270)
General and administrative expenses(a)   (43,602,146)   (126,821,515)   (17,382,335)   (110,687,106)   (225,122,249)   (30,855,571)
Total operating expenses   (263,805,630)   (288,544,402)   (39,548,301)   (579,768,383)   (645,039,359)   (88,410,000)
Government grants   882,000    1,070,500    146,724    1,405,038    1,897,473    260,070 
Operating loss   (8,085,910)   (89,522,711)   (12,270,109)   (46,216,139)   (163,339,087)   (22,387,485)
                               
Interest expenses   (1,459,041)   (524,748)   (71,923)   (4,377,943)   (606,268)   (83,096)
Interest income   4,740,673    10,282,848    1,409,382    6,850,450    25,545,664    3,501,325 
Investment income   1,043,509    558,506    76,550    9,338,859    985,342    135,052 
Loss before income taxes   (3,760,769)   (79,206,105)   (10,856,100)   (34,404,773)   (137,414,349)   (18,834,204)
Income tax benefit (expense)   6,644,058    (216,221)   (29,636)   22,074,153    (4,251,721)   (582,747)
Net income (loss)   2,883,289    (79,422,326)   (10,885,736)   (12,330,620)   (141,666,070)   (19,416,951)
                               
Other comprehensive income (loss)                              
Foreign currency translation adjustment, net of nil income taxes   23,943,587    (2,644,910)   (362,515)   45,355,827    12,842,854    1,760,260 
Unrealized gain on available-for-sale securities, net of reclassification   (484,817)   -    -    (2,952,087)   (345,356)   (47,335)
Comprehensive income (loss)   26,342,059    (82,067,236)   (11,248,251)   30,073,120    (129,168,572)   (17,704,026)
Net income (loss) per ordinary share                              
—Basic   0.02    (0.51)   (0.07)   (0.08)   (0.90)   (0.12)
—Diluted   0.02    (0.51)   (0.07)   (0.08)   (0.90)   (0.12)
Net income (loss) per ADS                              
—Basic   0.04    (1.01)   (0.14)   (0.16)   (1.81)   (0.25)
—Diluted   0.04    (1.01)   (0.14)   (0.16)   (1.81)   (0.25)
                               
Weighted average number of ordinary shares and ordinary shares equivalents outstanding used in computing net income (loss) per ordinary share                              
—Basic   155,324,512    157,165,708    157,165,708    155,035,083    156,594,219    156,594,219 
—Diluted   157,286,138    157,165,708    157,165,708    155,035,083    156,594,219    156,594,219 
Weighted average number of ADS outstanding used in computing net income (loss) per ADS                              
—Basic   77,662,256    78,582,854    78,582,854    77,517,542    78,297,110    78,297,110 
—Diluted   78,643,069    78,582,854    78,582,854    77,517,542    78,297,110    78,297,110 

 

Note:

(a) Includes share-based compensation expenses as follows:

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2022   2023   2022   2023 
   RMB   RMB   US$   RMB   RMB   US$ 
Cost of revenues   320,653    311,157    42,648    913,725    902,677    123,722 
Selling and marketing expenses   4,410,641    2,374,275    325,421    12,749,192    8,207,677    1,124,956 
Research and development expenses   7,272,800    3,550,989    486,704    19,179,452    18,656,349    2,557,065 
General and administrative expenses   5,287,282    3,224,049    441,893    14,486,283    12,152,242    1,665,603 
Total share-based compensation expenses   17,291,376    9,460,470    1,296,666    47,328,652    39,918,945    5,471,346 

 

 

 

 

 

 

NIU TECHNOLOGIES

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2022   2023   2022   2023 
   RMB   RMB   US$   RMB   RMB   US$ 
Net income (loss)   2,883,289    (79,422,326)   (10,885,736)   (12,330,620)   (141,666,070)   (19,416,951)
Add:                              
Share-based compensation expenses   17,291,376    9,460,470    1,296,666    47,328,652    39,918,945    5,471,346 
Adjusted net income (loss)   20,174,665    (69,961,856)   (9,589,070)   34,998,032    (101,747,125)   (13,945,605)