Niu(NIU) - 2023 Q2 - Quarterly Report

Financial and Operational Highlights Niu Technologies reported flat Q2 2023 revenue at RMB 828.8 million, a net loss of RMB 1.9 million, with e-scooter sales up 1.5% driven by international growth | Financial Metric | Q2 2023 | Q2 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Revenues | RMB 828.8 million | RMB 827.6 million | +0.1% | | Gross Margin | 23.1% | 20.3% | +2.8pp | | Net Income (Loss) | (RMB 1.9 million) | RMB 14.4 million | - | | Adjusted Net Income | RMB 14.4 million | RMB 31.2 million | -53.8% | | Operational Metric | Q2 2023 | YoY Change | | :--- | :--- | :--- | | Total E-scooters Sold | 211,996 | +1.5% | | E-scooters Sold (China) | 178,567 | -1.0% | | E-scooters Sold (International) | 33,429 | +17.1% | | Franchised Stores in China | 2,844 | - | | International Distributors | 55 | - | CEO Commentary CEO Dr. Yan Li noted strong market reception for new products, including MQiL and GOVA G400/G400T, supporting future sales and stable micro-mobility growth - New products, such as the MQiL and GOVA G400/G400T models, have been successfully launched and well-received by the market[3] - The MQiL model has become a key product, contributing to one-third of domestic sales in the quarter[3] - The micro-mobility segment, specifically kick-scooters, achieved stable growth during the second quarter[3] Detailed Financial Performance Stable revenue at RMB 828.8 million and improved gross margin to 23.1% were offset by a 14.9% rise in operating expenses, leading to a net loss of RMB 1.9 million Revenue Analysis Q2 2023 total revenue marginally increased by 0.1% to RMB 828.8 million, driven by China's e-scooter sales growth, largely offset by a decline in international e-scooter sales due to product mix shifts | Revenue Breakdown (RMB Million) | Q2 2023 | Q2 2022 | YoY Change | | :--- | :--- | :--- | :--- | | E-scooter sales (China) | 638.7 | 596.6 | +7.1% | | E-scooter sales (International) | 114.7 | 146.3 | -21.6% | | Accessories, spare parts & services | 75.4 | 84.7 | -11.0% | | Total | 828.8 | 827.6 | +0.1% | - The 7.1% revenue increase in the China market was primarily driven by strategic optimization of the premium product mix, which increased the revenue per e-scooter by 8.1% to RMB 3,577[6] - The 21.6% revenue decrease in international markets was mainly due to a decline in sales of higher-priced e-motorcycles and e-mopeds, partially offset by increased sales of lower-priced kick-scooters, leading to a 33.0% drop in revenue per e-scooter internationally[6] Cost, Gross Margin, and Operating Expenses Gross margin improved to 23.1% due to product mix and lower battery costs, but total operating expenses rose 14.9% to RMB 198.8 million, driven by increased selling, marketing, and G&A costs - Gross margin increased to 23.1% from 20.3% in Q2 2022, mainly due to the strategic optimization of the premium product mix and increased revenue per e-scooter in China[8] - Cost per e-scooter decreased by 4.9% to RMB 3,006, primarily due to the increased proportion of kick-scooters and decreased cost of battery packs[8] | Operating Expenses (RMB Million) | Q2 2023 | Q2 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Selling and marketing | 109.5 | 92.5 | +18.4% | | Research and development | 41.3 | 44.5 | -7.1% | | General and administrative | 48.0 | 36.0 | +33.2% | | Total Operating Expenses | 198.8 | 173.0 | +14.9% | Net Income and Earnings Per Share (EPS) The company reported a net loss of RMB 1.9 million, a significant decline from prior-year net income, with adjusted net income also decreasing to RMB 14.4 million | Profitability Metric (RMB Million) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Income (Loss) | (1.9) | 14.4 | | Adjusted Net Income (Non-GAAP) | 14.4 | 31.2 | - Basic and diluted net loss per ADS were both RMB 0.02 (US$ 0.00)[11] Balance Sheet Summary As of June 30, 2023, Niu Technologies maintained solid liquidity with RMB 1,022.2 million in cash and investments, total assets of RMB 2,385.3 million, and total liabilities of RMB 1,091.5 million - As of June 30, 2023, the company had cash, term deposits, and short-term investments totaling RMB 1,022.2 million[12] | Key Balance Sheet Items (RMB Million) | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | 1,930.1 | 2,012.1 | | Total Assets | 2,385.3 | 2,536.7 | | Total Current Liabilities | 1,064.0 | 1,192.8 | | Total Liabilities | 1,091.5 | 1,226.6 | | Total Shareholders' Equity | 1,293.8 | 1,310.1 | Business Outlook For Q3 2023, Niu Technologies forecasts revenues between RMB 1,153 million and RMB 1,326 million, representing a 0% to 15% year-over-year increase - The company expects Q3 2023 revenues to be between RMB 1,153 million and RMB 1,326 million[12] - This guidance corresponds to a year-over-year growth rate of 0% to 15%[12] Appendix: Financial Statements This section presents detailed unaudited financial statements for Q2 and H1 2023, including consolidated balance sheets, income statements, and GAAP to non-GAAP net income reconciliation | Unaudited Income Statement (RMB Million) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Revenues | 828.8 | 827.6 | | Gross Profit | 191.5 | 167.6 | | Operating Loss | (6.8) | (5.1) | | Net Income (Loss) | (1.9) | 14.4 | | GAAP to Non-GAAP Reconciliation (RMB Million) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Income (Loss) (GAAP) | (1.9) | 14.4 | | Add: Share-based compensation | 16.3 | 16.8 | | Adjusted Net Income (Non-GAAP) | 14.4 | 31.2 |