• Fourth Quarter Revenues of RMB 612.3 million, down 37.9% year over year
  
• Fourth Quarter Net Loss of RMB 37.1 million, compared to net income of RMB 47.6 million in the same period of last year
• Full Year Revenues of RMB 3,168.6 million, down 14.5% year over year
• Full Year Net loss of RMB 49.5 million, compared to net income of RMB 225.8 million in 2021

BEIJING, March 20, 2023 (GLOBE NEWSWIRE) -- Niu Technologies (“NIU”, or “the Company”) (NASDAQ: NIU), the world’s leading provider of smart urban mobility solutions, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Financial Highlights

• Revenues were RMB 612.3 million, a decrease of 37.9% year over year
• Gross margin was 22.5%, compared with 22.6% in the fourth quarter of last year
• Net loss was RMB 37.1 million, compared with net income of RMB 47.6 million in the fourth quarter of last year
• Adjusted net loss (non-GAAP)¹ was RMB 26.2 million, compared with adjusted net income of RMB 60.2 million in the fourth quarter of last year

Fourth Quarter 2022 Operating Highlights

• The number of e-scooters sold was 138,279, down 41.9% year over year
• The number of e-scooters sold in China was 118,065, down 42.5% year over year
• The number of e-scooters sold in the international markets was 20,214, down 38.7% year over year
• The number of franchised stores in China was 3,102 as of December 31, 2022
• International sales network consisted of 53 distributors covering 52 countries as of December 31, 2022

Dr. Yan Li, Chief Executive Officer of the Company, commented: “We have been strategically focusing on premium and mid-end segments since mid-2022. Despite the external challenges in the fourth quarter of 2022, we were pleased to see our new UQi+ ranked as No.1 best-seller in electric scooter category on Taobao during the double 11 shopping festival. Although we still face uncertainties and pressures on recovery of consumer sentiment, we are confident that our domestic sales will return to the growth track in 2023 with the launches of new products in the coming months.”

For the overseas markets, Dr. Li said, “We continued to expand our kick-scooter product offerings by introducing our KQi Youth series. We sold over 100 thousand units of kick-scooters in 2022. In January 2023, we were awarded the Rider's Choice Award as the Best Scooter Company, presented by Micromobility World. Winning the Rider's Choice Best Scooter Company award was a validation of our commitment to provide customers around the world with convenient and environmentally friendly smart electric scooters for urban mobility. We also started to deliver our first e-bike BQi C3 Pro in November 2022. We believe that, leveraging our well-recognized NIU brand and diverse product portfolio, and riding on the mega trend of transition from fuel to electricity in mobility vehicles, there will be great opportunities ahead of us.”

Fourth Quarter 2022 Financial Results

Revenues were RMB 612.3 million, a decrease of 37.9% year over year, due to decreased sales volume of 41.9% and increased revenues per e-scooter of 7.0%. 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 446.7 million, a decrease of 34.6%, and represented 83.7% of total e-scooter revenues. The decrease was mainly driven by the sales volume decreases by 42.5% in China.
• E-scooter sales revenues from international markets were RMB 86.7 million, a decrease of 54.2%, and represented 16.3% of total e-scooter revenues. The decrease was mainly due to the sales volume decreases by 38.7% in international markets.
• Accessories, spare parts sales and services revenues were RMB 78.9 million, a decrease of 30.8% and represented 12.9% of total revenues. The decrease was mainly due to the battery pack sales reduction from overseas shared mobility operators.
• The increase of revenues per e-scooter was mainly due to the increase in unit price of e-scooter, and a better product mix in China market.

Cost of revenues was RMB 474.7 million, a decrease of 37.8% year over year, mainly due to lower 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 3,433, up 7.1% from RMB 3,206 in the fourth quarter 2021, mainly due to higher raw material costs and product mix change.

Gross margin was 22.5%, compared with 22.6% in the same period of 2021. The decrease was mainly due to higher sales of kick-scooters with lower gross margin.

Operating expenses were RMB 195.6 million, an increase of 3.8% from the same period of 2021. Operating expenses as a percentage of revenues was 31.9%, compared with 19.1% in the fourth quarter of 2021.

• Selling and marketing expenses were RMB 107.5 million (including RMB 2.7 million of share-based compensation), an increase of 7.7% from RMB 99.8 million in the fourth quarter of 2021. The increase was mainly due to the increase in depreciation and amortization expense of RMB 6.3 million as a result of opening new franchised stores and the increase in overseas selling expenses of RMB 24.5 million as a result of the fast growth of kick-scooters sales, partially offset by a decrease in domestic selling expenses of RMB 20.0 million and the decrease in staff cost and share-based compensation of RMB 4.0 million. Selling and marketing expenses as a percentage of revenues was 17.6% compared with 10.1% in the fourth quarter of 2021.
• Research and development expenses were RMB 40.3 million (including RMB 3.2 million of share-based compensation), a decrease of 10.4% from RMB 45.0 million in the fourth quarter of 2021, mainly due to the decrease of professional fee for system development of RMB 6.2 million and the decrease in share-based compensation expenses of RMB 1.4 million, partially offset by the increase in staff cost of RMB 2.8 million. Research and development expenses as a percentage of revenues was 6.6%, compared with 4.6% in the fourth quarter of 2021.
• General and administrative expenses were RMB 47.8 million (including RMB 4.7 million of share-based compensation), an increase of 9.4% from RMB 43.7 million in the fourth quarter of 2021, mainly due to the increase in provision for credit losses of RMB 12.2 million and the increase in share-based compensation expenses of RMB 1.0 million, partially offset by the decrease in financial service fee of RMB 9.4 million. General and administrative expenses as a percentage of revenues was 7.8%, compared with 4.4% in the fourth quarter of 2021.

Operating expenses excluding share-based compensation were RMB 185.0 million, increased by 5.0% year over year, and represented 30.2% of revenues, compared with 17.9% in the fourth quarter of 2021.

• Selling and marketing expenses excluding share-based compensation were RMB 104.8 million, an increase of 9.4% year over year, and represented 17.1% of revenues, compared with 9.7% in the fourth quarter of 2021.
• Research and development expenses excluding share-based compensation were RMB 37.2 million, a decrease of 8.1% year over year, and represented 6.1% of revenues, compared with 4.1% in the fourth quarter of 2021.
• General and administrative expenses excluding share-based compensation were RMB 43.1 million, an increase of 7.8% year over year, and represented 7.0% of revenues, compared with 4.1% in the fourth quarter of 2021.

Government grants were RMB 15.0 million, decreased by RMB 1.3 million from the same period of 2021.

Share-based compensation was RMB 10.9 million, compared with RMB 12.5 million in the same period of 2021.

Income tax expense was RMB 0.3 million, compared with RMB 9.3 million in the same period of 2021.

Net loss was RMB 37.1 million, compared with net income of RMB 47.6 million in the fourth quarter of 2021. The net loss margin was 6.1%, compared with net income margin of 4.8% in the same period of 2021.

Adjusted net loss (non-GAAP) was RMB 26.2 million, compared with an adjusted net income of RMB 60.2 million in the fourth quarter of 2021. The adjusted net loss margin⁴ was 4.3%, compared with an adjusted net income of 6.1% in the same period of 2021.

Basic and diluted net loss per ADS were both RMB 0.48 (US$ 0.07).
Full Year 2022 Financial Results

Revenues were RMB 3,168.6 million, a decrease of 14.5% year over year, mainly driven by 19.9% decreases in e-scooter sales volume. E-scooter sales revenues from China market represented 82.7% of our total revenues from e-scooter sales, and e-scooter sales revenues from overseas markets represented 17.3% of our total revenues from e-scooter sales. The following table shows the revenues breakdown and revenues per e-scooter in the periods presented:

Cost of revenues were RMB 2,498.9 million, a decrease of 13.6% year over year, mainly driven by lower 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 3,005, up 7.9% from RMB 2,786 in 2021.

Gross margin was 21.1%, decreased from 21.9% in 2021, mainly due to the increase in sales of kick-scooters in overseas markets which have lower margin.

Operating expenses were RMB 775.3 million, an increase of 27.3% from RMB 609.0 million in 2021. Operating expenses as a percentage of revenues was 24.5%, compared with 16.4% in 2021.

Operating expenses excluding share-based compensation were RMB 718.4 million, an increase of 27.7% year over year, and represented 22.7% of revenues, compared with 15.2% in 2021.

Government grants were RMB 16.4 million, decreased by 32.3 million compared with the year of 2021.

Share-based compensation was RMB 58.2 million, an increase of RMB 11.0 million from RMB 47.2 million in 2021.

Income tax benefit was RMB 21.8 million, compared with income tax expense of RMB 47.0 million in 2021.

Net loss was RMB 49.5 million, compared with net income of RMB 225.8 million in 2021. The net loss margin was 1.6%, compared with net income margin of 6.1% in 2021.

Adjusted net income (non-GAAP) was RMB 8.8 million, compared with an adjusted net income of RMB 273.0 million in 2021. The adjusted net income margin⁴ was 0.3% in 2022, compared with an adjusted net income margin of 7.4% in 2021.

Basic and diluted net loss per ADS were both RMB 0.64 (US$ 0.09).

Balance Sheet
As of December 31, 2022, the Company had cash, term deposits and short-term investments of RMB 923.3 million in aggregate. The Company had restricted cash of RMB 186.3 million and short-term bank borrowings of RMB 160.0 million.

Business Outlook
NIU expects revenues of the first quarter 2023 to be in the range of RMB 403 million to RMB 489 million, representing a year-over-year decrease of 15% to 30%. NIU expects the sales volume for full year 2023 to be in the range of 1 million to 1.2 million units, representing a year-over-year increase of approximately 20% to 45%.

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, March 20,2023 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time) to discuss its fourth quarter and full year 2022 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.

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) four electric scooter and motorcycle series, NQi, MQi, UQi and Gova, (ii) one kick-scooter series, KQi, (iii) one high performance motorcycle series, RQi, (iv) one hybrid motorcycle series, YQi and (v) one e-bike series, BQi. 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 6.8972 to US$ 1.00, the exchange rate in effect as of December 30, 2022, 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
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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