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:

Revenues
(in RMB million)
 2021
Q2
 2020
Q2
 % change
YoY
E-scooter sales from China market 757.5 522.7 +44.9% 
E-scooter sales from international markets 57.7 56.9 +1.2% 
E-scooter sales, sub-total 815.2 579.6 +40.6% 
Accessories, spare parts and services 129.5 65.3 +98.3% 
Total 944.7 644.9 +46.5% 


Revenues per e-scooter
(in RMB)
 2021
Q2
 2020
Q2
 % change
YoY
E-scooter sales from China market2 3,079 3,373 -8.7% 
E-scooter sales from international markets2 8,259 10,995 -24.9% 
E-scooter sales 3,222 3,619 -11.0% 
Accessories, spare parts and services3 512 408 +25.5% 
Revenues per e-scooter 3,734 4,027 -7.3% 
  • 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.

Event:Niu Technologies Second Quarter 2021 Earnings Conference Call
Registration Link:http://apac.directeventreg.com/registration/event/2198233
Conference ID:2198233

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.

United States+1-855-452-5696
International+61-281-990-299
Hong Kong800-963-117
Mainland China400-602-2065
Conference ID2198233

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

NIU TECHNOLOGIES
 
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
      
 As of
 December 31, June 30, June 30,
 2020  2021  2021 
  RMB   RMB  US$
ASSETS     
Current assets     
Cash227,004,137  291,733,197  45,183,719 
Term deposits-current130,498,000  129,202,000  20,010,842 
Restricted cash168,469,077  178,053,372  27,576,956 
Short-term investments745,608,877  781,072,664  120,972,751 
Notes receivable-  10,525,549  1,630,200 
Accounts receivable, net101,320,063  63,413,253  9,821,462 
Inventories142,166,179  211,614,066  32,774,845 
Prepayments and other current assets32,832,088  57,000,475  8,828,249 
Total current assets 1,547,898,421    1,722,614,576    266,799,024  
      
Non-current assets     
Term deposits-non-current-  20,000,000  3,097,606 
Property, plant and equipment, net199,045,061  306,813,876  47,519,418 
Intangible assets, net5,607,101  4,632,587  717,496 
Operating lease right-of-use assets, net-  99,294,003  15,378,683 
Land use rights, net48,835,120  -  - 
Deferred income tax assets14,593,376  15,919,188  2,465,568 
Other non-current assets30,830,304  1,720,864  266,528 
Total non-current assets 298,910,962    448,380,518    69,445,299  
      
Total assets 1,846,809,383    2,170,995,094    336,244,323  
      
LIABILITIES     
Current liabilities     
Short-term bank borrowings180,000,000  180,000,000  27,878,450 
Accounts payable395,826,435  532,601,037  82,489,396 
Income taxes payable14,555,094  4,657,787  721,399 
Advances from customers40,062,189  43,360,632  6,715,707 
Deferred revenue-current21,155,634  22,182,057  3,435,563 
Accrued expenses and other current liabilities171,657,604  236,580,054  36,641,584 
Total current liabilities 823,256,956    1,019,381,567    157,882,099  
      
Deferred revenue-non-current4,176,458  5,414,115  838,540 
Deferred income tax liabilities1,109,479  1,534,251  237,625 
Operating lease liabilities-non-current-  18,324,661  2,838,129 
Other non-current liabilities24,892,246  25,186,278  3,900,859 
Total non-current liabilities 30,178,183    50,459,305    7,815,153  
      
Total liabilities 853,435,139    1,069,840,872    165,697,252  
      
SHAREHOLDERS’ EQUITY:     
Class A ordinary shares87,300  88,676  13,734 
Class B ordinary shares11,202  10,316  1,598 
Additional paid-in capital1,801,940,071  1,826,465,465  282,883,478 
Accumulated other comprehensive loss(43,016,027) (46,223,216) (7,159,065)
Accumulated deficit(765,648,302) (679,187,019) (105,192,674)
Total shareholders’ equity 993,374,244    1,101,154,222    170,547,071  
      
Total liabilities and shareholders’ equity 1,846,809,383    2,170,995,094    336,244,323  
      


NIU TECHNOLOGIES
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
          
 Three Months Ended June 30, Six Months Ended June 30,
 2020  2021 2020  2021
 RMB RMBUS$ RMB RMBUS$
Revenues644,934,410  944,745,010 146,322,369  877,874,918  1,492,081,575 231,094,008 
Cost of revenues(a)(496,852,342) (730,010,232)(113,064,187) (674,875,349) (1,147,012,501)(177,649,615)
Gross profit 148,082,068    214,734,778   33,258,182    202,999,569    345,069,074   53,444,393  
          
Operating expenses:         
Selling and marketing expenses(a)(45,603,755) (68,873,391)(10,667,130) (89,776,365) (142,391,875)(22,053,693)
Research and development expenses(a)(23,976,687) (30,847,683)(4,777,698) (46,712,272) (56,456,917)(8,744,063)
General and administrative expenses(a)(23,010,638) (37,185,424)(5,759,289) (47,259,880) (68,499,223)(10,609,179)
Total operating expenses (92,591,080)  (136,906,498) (21,204,117)  (183,748,517)  (267,348,015) (41,406,935)
Government grants826,367  21,504,500 3,330,623  8,092,250  21,856,842 3,385,194 
Operating income 56,317,355    99,332,780   15,384,688    27,343,302    99,577,901   15,422,652  
          
Interest expense(1,576,485) (1,641,648)(254,259) (3,748,959) (3,374,348)(522,620)
Interest income2,378,442  1,630,287 252,499  5,367,879  2,846,865 440,923 
Investment income2,303,195  4,042,059 626,035  3,896,250  8,170,999 1,265,527 
Income before income taxes 59,422,507    103,363,478   16,008,963    32,858,472    107,221,417   16,606,482  
Income tax expense(2,595,658) (11,528,628)(1,785,557) (2,407,549) (20,760,134)(3,215,335)
Net income 56,826,849    91,834,850   14,223,406    30,450,923    86,461,283   13,391,147  
          
Other comprehensive income (loss)         
Foreign currency translation adjustment59,950  (7,208,765)(1,116,496) 6,546,907  (4,305,029)(666,764)
Unrealized gain on available for sale securities, net641,975  897,660 139,030  1,165,671  1,097,840 170,034 
Comprehensive income 57,528,774    85,523,745   13,245,940    38,163,501    83,254,094   12,894,417  
Net income per ordinary share         
—Basic0.38  0.60 0.09  0.20  0.56 0.09 
—Diluted0.37  0.57 0.09  0.20  0.54 0.08 
Net income per ADS         
—Basic0.76  1.20 0.19  0.41  1.13 0.17 
—Diluted0.73  1.14 0.18  0.40  1.08 0.17 
          
Weighted average number of ordinary shares and ordinary shares equivalents outstanding used in computing net income per ordinary share
   
—Basic150,301,999  153,528,657 153,528,657  150,001,842  153,177,159 153,177,159 
—Diluted155,175,644  160,860,781 160,860,781  154,098,590  160,751,121 160,751,121 
Weighted average number of ADS outstanding used in computing net income per ADS         
—Basic75,151,000  76,764,329 76,764,329  75,000,921  76,588,580 76,588,580 
—Diluted77,587,822  80,430,391 80,430,391  77,049,295  80,375,561 80,375,561 
          
Note:         
(a) Includes share-based compensation expense as follows:         
 Three Months Ended June 30, Six Months Ended June 30,
 2020  2021 2020 2021
 RMB RMBUS$ RMB RMBUS$
Cost of revenues210,882  183,165 28,369  287,504  366,502 56,764 
Selling and marketing expenses2,888,358  2,977,457 461,149  4,491,000  6,009,319 930,725 
Research and development expenses3,109,286  4,283,976 663,503  5,081,977  8,285,463 1,283,255 
General and administrative expenses4,717,555  4,685,866 725,748  8,801,777  9,523,418 1,474,990 
Total share-based compensation expense 10,926,081    12,130,464   1,878,769    18,662,258    24,184,702   3,745,734  
          


NIU TECHNOLOGIES
 
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
          
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2021 2020 2021
 RMB  RMB US$ RMB  RMB US$
Net Income56,826,849 91,834,85014,223,406 30,450,923 86,461,28313,391,147
Add:         
Share-based compensation expense10,926,081 12,130,4641,878,769 18,662,258 24,184,7023,745,734
Adjusted net income 67,752,930   103,965,314 16,102,175   49,113,181   110,645,985 17,136,881
          

____________________

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