Niu Technologies Announces Third Quarter 2021 Financial Results

  • Third Quarter Total Volume of e-scooter sales up 58.3% year over year
  • Third Quarter Revenues of RMB 1,226.4 million, up 37.1% year over year
  • Third Quarter Net Income of RMB 91.7 million, compared with RMB 80.0 million in the same period of last year

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 2021.

Third Quarter 2021 Financial Highlights

  • Revenues were RMB 1,226.4 million, an increase of 37.1% year over year
  • Gross margin was 20.0%, compared with 20.9% in the third quarter of last year
  • Net income was RMB 91.7 million, an increase of 14.6% compared with RMB 80.0 million in the third quarter of last year
  • Adjusted net income (non-GAAP)1 was RMB 102.2 million, an increase of 12.9% compared with RMB 90.6 million in the third quarter of last year

Third Quarter 2021 Operating Highlights

  • The number of e-scooters sold reached 397,079, up 58.3% year over year
  • The number of e-scooters sold in China reached 392,112, up 59.9% year over year
  • The number of e-scooters sold in the international markets was 4,967, down 11.2% year over year
  • The number of franchised stores in China was 2,686 as of September 30, 2021, an increase of 320 from June 30, 2021
  • International sales network expanded to 41 distributors covering 49 countries

Dr. Yan Li, Chief Executive Officer of the Company, commented: “We delivered a strong quarter with China sales volume up by 59.9% amid weaker economic conditions. Our expansion strategy in product offerings and retail coverage combined with targeted marketing and promotional activities continued to be effective in driving sales volume growth and increasing our market share. Our cost optimization initiatives have shown positive results since September and we expect to benefit more in the future quarters. The widened product portfolio and channel coverage also laid a strong foundation for our growth in Q4 and 2022.”

Dr. Li continued, “The decrease of sales volume in the international markets was mainly caused by the impact of COVID-19 during the third quarter and the ongoing difficulties in international shipping, which we expect to improve in Q4. In Q3, we successfully launched our kick-scooter KQi3 in the international markets and received orders for more than 15,000 units during the third quarter. In September, we started to deliver kick-scooters to the international markets and there will be more deliveries in the fourth quarter. Furthermore, we will be debuting five exciting new products at EICMA 2021, in Milan just for the global markets, including our most powerful 125cc electric moped, the MQiGT-EVO, our first 150cc hybrid moped, the YQi, our upgraded e-bike BQi and two additional KQi series kick scooters, demonstrating our continued commitment in global sustainable micro-mobility markets. With these new products, we are very excited about the growth prospects of our business for the global markets and look forward to continued growth.”

Third Quarter 2021 Financial Results

Revenues were RMB 1,226.4 million, an increase of 37.1% year over year, due to 58.3% higher sales volume, partially offset by decreased revenues per e-scooter of 13.4%. The following table shows the revenues breakdown and revenues per e-scooter in the periods presented:

Revenues
(in RMB million)
  2021
Q3
  2020
Q3
  % change
YoY
E-scooter sales from China market   1,077.3   740.8   +45.4%
E-scooter sales from international markets   43.2   59.6   -27.5%
E-scooter sales, sub-total   1,120.5   800.4   +40.0%
Accessories, spare parts and services   105.9   94.1   +12.6%
Total   1,226.4   894.5   +37.1%

 

Revenues per e-scooter
(in RMB)
  2021
Q3
  2020
Q3
  % change
YoY
E-scooter sales from China market2   2,748   3,020   -9.0%
E-scooter sales from international markets2   8,693   10,647   -18.4%
E-scooter sales   2,822   3,190   -11.5%
Accessories, spare parts and services3   267   375   -28.8%
Revenues per e-scooter   3,089   3,565   -13.4%
  • E-scooter sales revenues from China market were RMB 1,077.3 million, an increase of 45.4%, and represented 96.1% 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 43.2 million, a decrease of 27.5%, and represented 3.9% of total e-scooter revenues. The decrease was mainly due to the impact of COVID-19 and the ongoing difficulties in international shipping.
  • Accessories, spare parts sales and services revenues were RMB 105.9 million, an increase of 12.6% and represented 8.6% of total revenues. The increase was mainly driven by higher e-scooter sales volume in China.
  • The decrease of revenues per e-scooter was mainly due to change in product mix.

Cost of revenues was RMB 981.2 million, an increase of 38.7% 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 2,471, down 12.4% from RMB 2,819 in the third quarter 2020 mainly due to change in product mix.

Gross margin was 20.0%, compared with 20.9% in the same period of 2020.  The decrease was mainly due to weaker international sales.

Operating expenses were RMB 153.2 million, an increase of 42.8% from the same period of 2020. Operating expenses as a percentage of revenues was 12.5%, compared with 12.0% in the third quarter of 2020.

  • Selling and marketing expenses were RMB 89.8 million (including RMB 3.3 million of share-based compensation), an increase of 76.7% from RMB 50.8 million in the third quarter of 2020. The increase was mainly due to the increase in advertising and promotion expense of RMB 24.6 million, the increase in depreciation and amortization expense of RMB 10.5 million as a result of opening of new franchised stores, and the increase in staff cost of RMB 6.8 million. Selling and marketing expenses as a percentage of revenues was 7.3% compared with 5.7% in the third quarter of 2020.
  • Research and development expenses were RMB 33.7 million (including RMB 4.2 million of share-based compensation), an increase of 16.7% from RMB 28.9 million in the third 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, partially offset by the decrease in design expense and material expenditure of RMB 1.6 million. Research and development expenses as a percentage of revenues was 2.8%, compared with 3.2% in the third quarter of 2020.
  • General and administrative expenses were RMB 29.6 million (including RMB 2.8 million of share-based compensation), an increase of 7.6% from RMB 27.5 million in the third quarter of 2020, mainly due to the increase in professional fee of RMB 2.4 million and the increase in staff cost of RMB 1.5 million, partially offset by the decrease in share-based compensation expenses of RMB 1.8 million. General and administrative expenses as a percentage of revenues was 2.4%, compared with 3.1% in the third quarter of 2020.

Operating expenses excluding share-based compensation were RMB 142.9 million, increased by 47.5% year over year, and represented 11.7% of revenues, compared with 10.8% in the third quarter of 2020.

  • Selling and marketing expenses excluding share-based compensation were RMB 86.5 million, an increase of 80.1% year over year, and represented 7.1% of revenues, compared with 5.4% in the third quarter of 2020.
  • Research and development expenses excluding share-based compensation were RMB 29.5 million, an increase of 14.0% year over year, and represented 2.4% of revenues, compared with 2.9% in the third quarter of 2020.
  • General and administrative expenses excluding share-based compensation were RMB 26.8 million, an increase of 17.1% year over year, and represented 2.2% of revenues, compared with 2.6% in the third quarter of 2020.

Government grants were RMB 10.6 million, increased by RMB 9.5 million from the same period of 2020.

Share-based compensation was RMB 10.5 million, compared with RMB 10.6 million in the same period of 2020.

Income tax expense was RMB 17.0 million, an increase of RMB 11.9 million from the same period of 2020.

Net income was RMB 91.7 million, compared with RMB 80.0 million in the third quarter of 2020. The net income margin was 7.5%, compared with 8.9% in the same period of 2020.

Adjusted net income (non-GAAP) was RMB 102.2 million, compared with RMB 90.6 million in the third quarter of 2020. The adjusted net income margin4 was 8.3%, compared with 10.1% in the same period of 2020.

Basic and diluted net income per ADS were RMB 1.19 (US$ 0.18) and RMB 1.15 (US$ 0.18), respectively.

Balance Sheet

As of September 30, 2021, the Company had cash, term deposits and short-term investments of RMB 1,552.6 million in aggregate. The Company had restricted cash of RMB 147.5 million and short-term bank borrowings of RMB 140.0 million.

Business Outlook

NIU expects revenues of the fourth quarter 2021 to be in the range of RMB 840 million to RMB 910 million, representing a year-over-year increase of 25% to 35%.

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, November 22, 2021 at 8:00 AM U.S. Eastern Time (9:00 PM Beijing/Hong Kong Time) to discuss its third 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.

Event: Niu Technologies Third Quarter 2021 Earnings Conference Call
Registration Link: http://apac.directeventreg.com/registration/event/1922118
Conference ID: 1922118

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 November 30, 2021.

United States +1-855-452-5696
International +61-281-990-299
Hong Kong 800-963-117
Mainland China 400-602-2065
Conference ID 2198233

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 product portfolio consisting of eight series, four e-scooter series, including NQi, MQi and UQi with smart functions and Gova, two urban commuter electric motorcycles series RQi and TQi, a performance bicycle series, NIU Aero, and a 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 6.4434 to US$ 1.00, the exchange rate in effect as of September 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: This email address is being protected from spambots. You need JavaScript enabled to view it. 

NIU TECHNOLOGIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
           
  As of
  December 31,   September 30,   September 30,
  2020    2021    2021 
  RMB   RMB   US$
ASSETS          
Current assets          
Cash 227,004,137     293,949,109     45,620,186  
Term deposits-current 130,498,000     175,105,800     27,175,994  
Restricted cash 168,469,077     147,512,195     22,893,534  
Short-term investments 745,608,877     1,063,580,320     165,065,077  
Accounts receivable, net 101,320,063     63,806,419     9,902,601  
Inventories 142,166,179     304,363,682     47,236,503  
Prepayments and other current assets 32,832,088     52,482,982     8,145,231  
Total current assets 1,547,898,421     2,100,800,507     326,039,126  
           
Non-current assets          
Term deposits-non-current -     20,000,000     3,103,951  
Property, plant and equipment, net 199,045,061     366,446,253     56,871,567  
Intangible assets, net 5,607,101     4,173,937     647,785  
Operating lease right-of-use assets, net -     97,087,733     15,067,780  
Land use rights, net 48,835,120     -     -  
Deferred income tax assets 14,593,376     12,615,297     1,957,863  
Other non-current assets 30,830,304     2,282,018     354,164  
Total non-current assets 298,910,962     502,605,238     78,003,110  
           
Total assets 1,846,809,383     2,603,405,745     404,042,236  
           
LIABILITIES          
Current liabilities          
Short-term bank borrowings 180,000,000     140,000,000     21,727,659  
Notes payable -     101,410,228     15,738,621  
Accounts payable 395,826,435     794,735,291     123,340,983  
Income taxes payable 14,555,094     11,158,916     1,731,837  
Advances from customers 40,062,189     48,822,633     7,577,154  
Deferred revenue-current 21,155,634     30,298,439     4,702,244  
Accrued expenses and other current liabilities 171,657,604     215,884,609     33,504,766  
Total current liabilities 823,256,956     1,342,310,116     208,323,264  
           
Deferred revenue-non-current 4,176,458     9,708,660     1,506,760  
Deferred income tax liabilities 1,109,479     1,934,518     300,232  
Operating lease liabilities-non-current -     17,154,448     2,662,329  
Other non-current liabilities 24,892,246     21,670,969     3,363,281  
Total non-current liabilities 30,178,183     50,468,595     7,832,602  
           
Total liabilities 853,435,139     1,392,778,711     216,155,866  
           
SHAREHOLDERS’ EQUITY:          
Class A ordinary shares 87,300     89,019     13,816  
Class B ordinary shares 11,202     10,316     1,601  
Additional paid-in capital 1,801,940,071     1,842,866,291     286,008,364  
Accumulated other comprehensive loss (43,016,027 )   (44,863,957 )   (6,962,777 )
Accumulated deficit (765,648,302 )   (587,474,635 )   (91,174,634 )
Total shareholders’ equity 993,374,244     1,210,627,034     187,886,370  
           
Total liabilities and shareholders’ equity 1,846,809,383     2,603,405,745     404,042,236  
           
NIU TECHNOLOGIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                   
  Three Months Ended September 30,   Nine Months Ended September 30,
  2020    2021   2020    2021
  RMB   RMB US$   RMB   RMB US$
Revenues 894,464,268     1,226,396,601   190,333,768     1,772,339,186     2,718,478,176   421,901,198  
Cost of revenues(a) (707,360,744 )   (981,194,347 ) (152,278,975 )   (1,382,236,093 )   (2,128,206,848 ) (330,292,524 )
Gross profit 187,103,524     245,202,254   38,054,793     390,103,093     590,271,328   91,608,674  
                   
Operating expenses:                  
Selling and marketing expenses(a) (50,837,916 )   (89,848,749 ) (13,944,307 )   (140,614,281 )   (232,240,624 ) (36,043,180 )
Research and development expenses(a) (28,899,391 )   (33,738,673 ) (5,236,160 )   (75,611,663 )   (90,195,590 ) (13,998,136 )
General and administrative expenses(a) (27,520,025 )   (29,618,276 ) (4,596,684 )   (74,779,905 )   (98,117,499 ) (15,227,597 )
Total operating expenses (107,257,332 )   (153,205,698 ) (23,777,151 )   (291,005,849 )   (420,553,713 ) (65,268,913 )
Government grants 1,110,121     10,600,000   1,645,094     9,202,371     32,456,842   5,037,223  
Operating income 80,956,313     102,596,556   15,922,736     108,299,615     202,174,457   31,376,984  
                   
Interest expense (1,860,930 )   (1,527,066 ) (236,997 )   (5,609,889 )   (4,901,414 ) (760,688 )
Interest income 1,705,239     990,553   153,731     7,073,118     3,837,418   595,558  
Investment income 4,312,634     6,669,406   1,035,076     8,208,884     14,840,405   2,303,195  
Income before income taxes 85,113,256     108,729,449   16,874,546     117,971,728     215,950,866   33,515,049  
Income tax expense (5,106,812 )   (17,017,065 ) (2,641,007 )   (7,514,361 )   (37,777,199 ) (5,862,929 )
Net income 80,006,444     91,712,384   14,233,539     110,457,367     178,173,667   27,652,120  
                   
Other comprehensive income (loss)                  
Foreign currency translation adjustment (21,210,855 )   1,728,517   268,262     (14,663,948 )   (2,576,512 ) (399,868 )
Unrealized gain (loss) on available for sale securities, net 1,033,589     (369,258 ) (57,308 )   2,199,260     728,582   113,074  
Comprehensive income 59,829,178     93,071,643   14,444,493     97,992,679     176,325,737   27,365,326  
Net income per ordinary share                  
—Basic 0.53     0.60   0.09     0.73     1.16   0.18  
—Diluted 0.50     0.57   0.09     0.71     1.11   0.17  
Net income per ADS                  
—Basic 1.06     1.19   0.18     1.47     2.32   0.36  
—Diluted 1.01     1.15   0.18     1.41     2.22   0.34  
                   
Weighted average number of ordinary shares and ordinary shares equivalents outstanding used in computing net income per ordinary share
—Basic 151,421,638     153,933,264   153,933,264     150,478,559     153,431,962   153,431,962  
—Diluted 158,776,078     159,943,770   159,943,770     156,297,293     160,327,408   160,327,408  
Weighted average number of ADS outstanding used in computing net income per ADS
     
—Basic 75,710,819     76,966,632   76,966,632     75,239,280     76,715,981   76,715,981  
—Diluted 79,388,039     79,971,885   79,971,885     78,148,647     80,163,704   80,163,704  
                   
Note:                  
(a) Includes share-based compensation expense as follows:                  
  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2021   2020   2021
  RMB   RMB US$   RMB   RMB US$
Cost of revenues 192,396     223,427   34,675     479,900     589,929   91,556  
Selling and marketing expenses 2,782,878     3,310,173   513,731     7,273,878     9,319,492   1,446,362  
Research and development expenses 2,986,491     4,190,424   650,344     8,068,468     12,475,887   1,936,227  
General and administrative expenses 4,595,381     2,771,071   430,063     13,397,158     12,294,489   1,908,075  
Total share-based compensation expense 10,557,146     10,495,095   1,628,813     29,219,404     34,679,797   5,382,220  
                   
NIU TECHNOLOGIES
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
                   
  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2021   2020   2021
  RMB   RMB US$   RMB   RMB US$
Net Income 80,006,444   91,712,384 14,233,539   110,457,367   178,173,667 27,652,120
Add:                  
Share-based compensation expense 10,557,146   10,495,095 1,628,813   29,219,404   34,679,797 5,382,220
Adjusted net income 90,563,590   102,207,479 15,862,352   139,676,771   212,853,464 33,034,340
                   

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 


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