Niu Technologies Announces Second Quarter 2021 Financial Results

-- Second Quarter Total Volume of e-scooter sales up 58.0% year over year

-- Second Quarter Revenues of RMB 944.7 million, up 46.5% year over year

-- Second Quarter Net Income of RMB 91.8 million, compared with RMB 56.8 million in the same period of last year

BEIJING, Aug. 16, 2021 (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 2021.

Second Quarter 2021 Financial Highlights

• Revenues were RMB 944.7 million, an increase of 46.5% year over year
• Gross margin was 22.7%, compared with 23.0% in the second quarter of last year
• Net income was RMB 91.8 million, an increase of 61.6% compared with RMB 56.8 million in the second quarter of last year
• Adjusted net income (non-GAAP)¹ was RMB 104.0 million, an increase of 53.4% compared with RMB 67.8 million in the second quarter of last year

Second Quarter 2021 Operating Highlights

• The number of e-scooters sold reached 252,998, up 58.0% year over year
• The number of e-scooters sold in China reached 246,018, up 58.8% year over year
• The number of e-scooters sold in the international markets reached 6,980, up 34.8% year over year
• The number of franchised stores in China was 2,366, an increase of 450 since March 31, 2021
• International sales network expanded to 40 distributors covering 48 countries
  

Dr. Yan Li, Chief Executive Officer of the Company, commented: “We delivered another strong quarter with China sales volume up by 58.8% and international markets sales volume up by 34.8% year-over-year despite continued challenges with COVID-19 and international logistics. Our new products F0 and F2 have been well received by customers and contributed to the volume growth. Our online sales accounted for 21.4% of our total sales volume, and reached a historical high due to successful launch of F0 through e-commerce platform. Our product mix also improved compared with previous quarter. The sales volume from low-priced models G0 and F0 represented 30.4% of total sales volume, compared with the 38.2% in the first quarter. As a result, revenues per e-scooter improved by 8.3% over previous quarter.”

Dr. Li continued, “In July, we started to deliver another new model C0 which was specifically designed for female customers. The retail sales price for C0 model starts from RMB 3,399, higher than the prices for G0 and F0. We also began the pre-sale of our newly launched kick-scooter, the KQi3 model, in Europe and US markets. The delivery of KQi3 is expected to start in the fourth quarter. We are very excited about the growth prospects of our business and look forward to the continued growth.”

Second Quarter 2021 Financial Results

Revenues were RMB 944.7 million, an increase of 46.5% year over year, due to higher sales volume of 58.0%, partially offset by decreased revenues per e-scooter of 7.3%. The following table shows the revenues breakdown and revenues per e-scooter in the periods presented:

• E-scooter sales revenues from China market were RMB 757.5 million, an increase of 44.9%, and represented 92.9% of total e-scooter revenues. The increase was mainly driven by retail network expansion and new product launches in China.
• E-scooter sales revenues from international markets were RMB 57.7 million, an increase of 1.2%, and represented 7.1% of total e-scooter revenues. The increase was mainly driven by higher sales volume.
• Accessories, spare parts sales and services revenues were RMB 129.5 million, an increase of 98.3% and represented 13.7% of total revenues. The increase was mainly driven by higher e-scooter sales volume in China and higher spare parts sales from international markets.
• The decrease of revenues per e-scooter was mainly due to change in product mix.

Cost of revenues was RMB 730.0 million, an increase of 46.9% year over year, mainly due to higher e-scooter 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 2,885, down 7.0% from RMB 3,103 in the second quarter 2020 mainly due to change in product mix.

Gross margin was 22.7%, compared with 23.0% in the same period of 2020. The decrease was mainly due to higher raw material costs.

Operating expenses were RMB 136.9 million, an increase of 47.9% from the same period of 2020. Operating expenses as a percentage of revenues was 14.5%, compared with 14.4% in the second quarter of 2020.

• Selling and marketing expenses were RMB 68.9 million (including RMB 3.0 million of share-based compensation), an increase of 51.0% from RMB 45.6 million in the second quarter of 2020. The increase was mainly due to the increase in advertising and promotion expense of RMB 10.6 million, the increase in depreciation and amortization expense of RMB 7.3 million as a result of opening of new franchised stores, and the increase in staff cost of RMB 6.5 million. Selling and marketing expenses as a percentage of revenues was 7.3% compared with 7.1% in the second quarter of 2020.
• Research and development expenses were RMB 30.8 million (including RMB 4.3 million of share-based compensation), an increase of 28.7% from RMB 24.0 million in the second quarter of 2020, mainly due to the increase in staff cost of RMB 4.8 million, and the increase in share-based compensation expenses of RMB 1.2 million. Research and development expenses as a percentage of revenues was 3.3%, compared with 3.7% in the second quarter of 2020.
• General and administrative expenses were RMB 37.2 million (including RMB 4.7 million of share-based compensation), an increase of 61.6% from RMB 23.0 million in the second quarter of 2020, mainly due to the increase in staff cost of RMB 3.7 million, the increase in professional fee of RMB 2.8 million, the increase in foreign currency exchange loss of RMB 2.5 million, the increase in depreciation and amortization expense of RMB 2.0 million, and the increase in rental and other office expenses of RMB 2.1 million. General and administrative expenses as a percentage of revenues was 3.9%, compared with 3.6% in the second quarter of 2020.
  

Operating expenses excluding share-based compensation were RMB 125.0 million, increased by 52.6% year over year, and represented 13.2% of revenues, compared with 12.7% in the second quarter of 2020.

• Selling and marketing expenses excluding share-based compensation were RMB 65.9 million, an increase of 54.3% year over year, and represented 7.0% of revenues, compared with 6.6% in the second quarter of 2020.
• Research and development expenses excluding share-based compensation were RMB 26.6 million, an increase of 27.3% year over year, and represented 2.8% of revenues, compared with 3.2% in the second quarter of 2020.
• General and administrative expenses excluding share-based compensation were RMB 32.5 million, an increase of 77.7% year over year, and represented 3.4% of revenues, compared with 2.8% in the second quarter of 2020.
  

Government grants were RMB 21.5 million, increased by RMB 20.7 million from the same period of 2020.

Share-based compensation was RMB 12.1 million, an increase of RMB 1.2 million from the same period of 2020.

Income tax expense was RMB 11.5 million, an increase of RMB 8.9 million from the same period of 2020.

Net income was RMB 91.8 million, compared with RMB 56.8 million in the second quarter of 2020. The net income margin was 9.7%, compared with 8.8% in the same period of 2020.

Adjusted net income (non-GAAP) was RMB 104.0 million, compared with RMB 67.8 million in the second quarter of 2020. The adjusted net income margin⁴ was 11.0%, compared with 10.5% in the same period of 2020.

Basic and diluted net income per ADS were RMB 1.20 (US$ 0.19) and RMB 1.14 (US$ 0.18), respectively.

Balance Sheet
As of June 30, 2021, the Company had cash, term deposits and short-term investments of RMB 1,222.0 million in aggregate. The Company had restricted cash of RMB 178.1 million and short-term bank borrowings of RMB 180.0 million.

Business Outlook
NIU expects revenues of the third quarter 2021 to be in the range of RMB 1,250 million to RMB 1,450 million, representing a year-over-year increase of 40% to 62%.

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, which is subject to change in light of uncertainties and situations related to how COVID-19 develops.

Conference Call

The Company will host an earnings conference call on Monday, August 16, 2021 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time) to discuss its second quarter 2021 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, an event passcode, and a unique registrant ID, which will be used to join the conference call.

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.

A replay of the conference call can be accessed by phone two hours later at the following numbers until August 24, 2021.

About NIU

As the world’s leading provider of smart urban mobility solutions, NIU designs, manufactures and sells high-performance electric motorcycles, scooters, bicycles and kick-scooters. NIU has a product portfolio consisting of eight series, four electric scooter series, including NQi, MQi, UQi and Gova, two urban commuter electric motorcycle series RQi and TQi, a performance electric bicycle series, NIU Aero, and an electric kick-scooter series, KQi. Different series of products address the needs of different segments of modern urban residents and resolve the demands of different scenarios of urban travel, while being united through a common design language that emphasizes style, freedom and technology. NIU has adopted an omnichannel retail model, integrating the offline and online channels, to offer the products and 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 6.4566 to US$ 1.00, the exchange rate in effect as of June 30, 2021, 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
Jason Yang
Investor Relations Manager
E-mail: ir@niu.com

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¹ Adjusted net income/loss (non-GAAP) is defined as net income/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/loss margin is defined as adjusted net income/loss (non-GAAP) as a percentage of the revenues