Niu Technologies Announces Third Quarter 2020 Financial Results

Nachrichtenquelle: globenewswire
23.11.2020, 08:00  |  366   |   |   

-- Third Quarter Total volume of e-scooter sales up 67.9% year over year

-- Third Quarter Revenues of RMB 894.5 million, up 36.7% year over year

-- Third Quarter Net income of RMB 80.0 million, compared with RMB 66.4 million in the third quarter of last year

BEIJING, Nov. 23, 2020 (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 third quarter 2020.

Third Quarter 2020 Financial Highlights

  • Revenues were RMB 894.5 million, an increase of 36.7% year over year
  • Gross margin was 20.9%, compared with 22.2% in the third quarter of last year
  • Net income was RMB 80.0 million, compared with RMB 66.4 million in the third quarter of last year
  • Adjusted net income (non-GAAP)1 was RMB 90.6 million, compared with RMB 72.5 million in the third quarter of last year

Third Quarter 2020 Operating Highlights

  • The number of e-scooters sold reached 250,889, up 67.9% year over year
  • The number of e-scooters sold in China reached 245,293, up 70.2% year over year
  • The number of e-scooters sold in the international markets reached 5,596, up 6.3% year over year
  • The number of franchised stores in China was 1,266, an increase of 182 since June 30, 2020
  • International sales network expanded to 36 distributors covering 46 countries

Dr. Yan Li, Chief Executive Officer of the Company, commented: “We are very pleased to see the strong sales growth in China during the third quarter. Our China sales volume increased by 70% year over year driven by new products launched earlier this year and retail network expansion. Our international sales were affected by rebound of COVID-19 and sales volume grew by 6% only. We are working closely with our international distributors to mitigate the impact in order to bring our sales back to fast growth track. Our gross margin declined to 20.9% mainly due to sales promotions and higher proportion of sales from G0 model which has lower sales price and gross margin than other models. However, with the continued cost optimization efforts, we expect our gross margin to improve.”

Dr. Li continued, “In the fourth quarter, we plan to launch our new Gova product in Indonesia market. The marketing campaign and pre-sales will start from December. We are very excited about the growth prospective of Indonesia market and plan to expand our product portfolio and retail sales network in the next few years.”

Third Quarter 2020 Financial Results

Revenues were RMB 894.5 million, an increase of 36.7% year over year, due to higher sales volume of 67.9%, partially offset by decreased revenues per e-scooter of 18.6%.

Revenues
(in RMB million)
  2020
Q3
  2019
Q3
  % change
YoY
E-scooter sales from China market   740.8   532.1   +39.2%
E-scooter sales from international markets   59.6   44.1   +35.2%
E-scooter sales, sub-total   800.4   576.2   +38.9%
Accessories, spare parts and services   94.1   78.3   +20.2%
Total   894.5   654.5   +36.7%


Revenues per e-scooter
(in RMB)
  2020
Q3
  2019
Q3
  % change
YoY
E-scooter sales from China market2   3,020   3,691   -18.2%
E-scooter sales from international markets2   10,647   8,366   +27.3%
E-scooter sales   3,190   3,856   -17.3%
Accessories, spare parts and services3   375   524   -28.4%
Revenues per e-scooter   3,565   4,380   -18.6%
  • E-scooter sales revenues from China market were RMB 740.8 million, an increase of 39.2%, and represented 92.6% 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 59.6 million, an increase of 35.2%, and represented 7.4% of total e-scooter revenues. The increase was mainly driven by higher average sales price in the international markets.
  • Accessories, spare parts sales and service revenues were RMB 94.1 million, an increase of 20.2% and represented 10.5% of total revenues. The increase was mainly due to higher sales from China market.
  • Decreased revenues per e-scooter was mainly driven by sales discount, the sales of new product G0 which has a lower sales price compared with other models, and lower revenue per-scooter from accessories, spare parts and services as a result of slower growth in accessories and spare parts sales from international markets.

Cost of revenues was RMB 707.4 million, an increase of 38.9% 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 2,819, down 17.3% from RMB 3,408 in the third quarter 2019 mainly due to change in product mix and lower raw materials cost.

Gross margin was 20.9%, compared with 22.2% in the same period of 2019. The decrease was mainly due to sales discount and high sales volume of G0 model with lower gross margin, partially offset by the cost savings on raw materials.

Operating expenses were RMB 107.3 million, an increase of 23.4% from the same period of 2019. Operating expenses as a percentage of revenues was 12.0%, compared with 13.3% in the third quarter of 2019.                

  • Selling and marketing expenses were RMB 50.8 million (including RMB 2.8 million of share-based compensation), a decrease of 11.0% from RMB 57.1 million in the third quarter of 2019. The decrease was mainly due to the decrease in advertising and promotion expense of RMB 9.1 million and the decrease of traveling and conference expense of RMB 0.9 million. The lower expenses were partially offset by the increase of depreciation and amortization expense of RMB 2.2 million which was due to opening of new franchised stores, and by the increase in share-based compensation expenses of RMB 1.5 million. Selling and marketing expenses as a percentage of revenues was 5.7% compared with 8.7% in the third quarter of 2019.
  • Research and development expenses were RMB 28.9 million (including RMB 3.0 million of share-based compensation), an increase of 69.4% from RMB 17.1 million in the third quarter of 2019, mainly due to the increase in staff cost of RMB 5.8 million, the increase in design expense of RMB 4.0 million due to more new products development, and the increase in share-based compensation expenses of RMB 1.6 million. Research and development expenses as a percentage of revenues was 3.2%, compared with 2.6% in the third quarter of 2019.
  • General and administrative expenses were RMB 27.5 million (including RMB 4.6 million of share-based compensation), an increase of 115.8% from RMB 12.8 million in the third quarter of 2019, mainly due to the increase in foreign currency exchange loss of RMB 7.4 million, the increase in taxes and surcharges of RMB 1.9 million, the increase in share-based compensation expenses of RMB 1.3 million, the increase in professional fee of RMB 1.2 million, the increase in rental, depreciation and amortization expense of RMB 1.1 million, and the increase in office and travelling expense of RMB 1.0 million. General and administrative expenses as a percentage of revenues was 3.1%, compared with 1.9% in the third quarter of 2019.

Operating expenses excluding share-based compensation were RMB 96.9 million, increased by 19.7% year over year, and represented 10.8% of revenues, compared with 12.4% in the third quarter of 2019.

  • Selling and marketing expenses excluding share-based compensation were RMB 48.1 million, a decrease of 13.9% year over year, and represented 5.4% of revenues, compared with 8.5% in the third quarter of 2019.
  • Research and development expenses excluding share-based compensation were RMB 25.9 million, an increase of 65.3% year over year, and represented 2.9% of revenues, compared with 2.4% in the third quarter of 2019.
  • General and administrative expenses excluding share-based compensation were RMB 22.9 million, an increase of 141.6% year over year, and represented 2.6% of revenues, compared with 1.4% in the third quarter of 2019.

Government grants were RMB 1.1 million, decreased by RMB 11.5 million from the same period of 2019.

Share-based compensation was RMB 10.6 million, an increase of RMB 4.5 million from the same period of 2019.
Net income was RMB 80.0 million, compared with RMB 66.4 million in the third quarter of 2019. The net income margin was 8.9%, compared with 10.1% in the same period of 2019.

Adjusted net income (non-GAAP) was RMB 90.6 million, compared with RMB 72.5 million in the third quarter of 2019. The adjusted net income margin4 was 10.1%, compared with 11.1% in the same period of 2019.

Basic and diluted net income per ADS were RMB 1.06 (US$ 0.16) and RMB 1.01 (US$ 0.15), respectively.
Balance Sheet
As of September 30, 2020, the Company had cash and cash equivalents, term deposits and short-term investments of RMB 1,301.2 million in aggregate. The Company had restricted cash of RMB 176.9 million and short-term bank borrowings of RMB 180.0 million.

Recent Development
In October 2020, NIU sold 31,935 e-scooters, representing a decrease of 6.0% year-over-year. The number of e-scooters sold in the international markets reached 2,275, representing an 83.9% year-over-year growth. The number of e-scooters sold in China market reached 29,660, representing a decrease of 9.4% year-over-year. The decrease was mainly caused by fluctuation of demand in the China market, and also by a 3-day suspension of production and delivery at our factory due to facility and machinery maintenance.

In November 2020, our sales volume for the first 19 days has surpassed the total sales volume for the entire month of November 2019.

Business Outlook
NIU expects revenues of the fourth quarter 2020 to be in the range of RMB 565 million to RMB 615 million, representing a year-over-year increase of 5% to 15%.

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 23, 2020 at 8:00 AM U.S. Eastern Time (9:00 PM Beijing/Hong Kong Time) to discuss its third quarter 2020 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 2020 Earnings Conference Call
Registration Link: http://apac.directeventreg.com/registration/event/9335298 
Conference ID: 9335298

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 December 1, 2020.

United States +1-855-452-5696
International +61-281-990-299
Hong Kong 800-963-117
Mainland China 400-602-2065
Conference ID 9335298

About NIU

As the world’s leading provider of smart urban mobility solutions, NIU designs, manufactures and sells high-performance electric bicycles and motorcycles. NIU has a product portfolio consisting of seven series, four e-scooter series, including NQi, MQi and UQi with smart functions and Gova, two urban commuter electric motorcycles series RQi and TQi, and a performance bicycle series, NIU Aero. 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 6.7896 to US$ 1.00, the exchange rate in effect as of September 30, 2020, 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,   September 30,   September 30,
  2019    2020    2020 
  RMB   RMB   US$
ASSETS          
Current assets          
Cash and cash equivalents 279,945,942     158,156,499     23,293,935  
Term deposits 174,404,554     239,085,155     35,213,437  
Restricted cash 221,656,071     176,873,341     26,050,628  
Short-term investments 310,439,321     903,961,667     133,139,164  
Accounts receivable, net 115,228,700     38,713,432     5,701,872  
Inventories 178,633,299     143,755,773     21,172,937  
Prepayments and other current assets 30,982,131     33,519,316     4,936,862  
Total current assets 1,311,290,018     1,694,065,183     249,508,835  
           
Non-current assets          
Property and equipment, net 150,891,344     174,140,242     25,648,086  
Intangible assets, net 7,779,749     6,263,104     922,456  
Land use right, net 34,355,936     33,834,514     4,983,285  
Deferred income tax assets -     17,261,016     2,542,273  
Other non-current assets 6,522,561     44,856,465     6,606,642  
Total non-current assets 199,549,590     276,355,341     40,702,742  
           
Total assets 1,510,839,608     1,970,420,524     290,211,577  
           
LIABILITIES          
Current liabilities          
Short-term bank borrowings 217,394,132     180,000,000     26,511,135  
Accounts payable 258,988,264     549,320,026     80,906,095  
Income taxes payable 3,013,805     20,054,723     2,953,741  
Advance from customers 7,478,309     28,338,972     4,173,879  
Deferred revenue-current 31,105,700     24,076,302     3,546,056  
Accrued expenses and other current liabilities 175,533,397     200,944,967     29,595,995  
Total current liabilities 693,513,607     1,002,734,990     147,686,901  
           
Deferred revenue-non-current 2,171,033     3,677,815     541,684  
Deferred income tax liability 1,265,780     -     -  
Other non-current liabilities 22,358,968     28,241,423     4,159,513  
Total non-current liabilities 25,795,781     31,919,238     4,701,197  
           
Total liabilities 719,309,388     1,034,654,228     152,388,098  
           
SHAREHOLDERS’ EQUITY:          
Class A ordinary shares 84,494     86,972     12,810  
Class B ordinary shares 11,977     11,202     1,650  
Additional paid-in capital 1,738,102,741     1,784,344,435     262,805,531  
Accumulated other comprehensive loss (12,368,224 )   (24,832,912 )   (3,657,493 )
Accumulated deficit (934,300,768 )   (823,843,401 )   (121,339,019 )
Total shareholders’ equity 791,530,220     935,766,296     137,823,479  
           
Total liabilities and shareholders’ equity 1,510,839,608     1,970,420,524     290,211,577  
           


NIU TECHNOLOGIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                   
  Three months ended September 30,   Nine months ended September 30,
  2019    2020   2019    2020
  RMB   RMB US$   RMB   RMB US$
Revenues 654,457,316     894,464,268   131,740,348     1,540,182,595     1,772,339,186   261,037,349  
Cost of revenues(a) (509,226,828 )   (707,360,744 ) (104,182,977 )   (1,193,792,703 )   (1,382,236,093 ) (203,581,373 )
Gross profit 145,230,488     187,103,524   27,557,371     346,389,892     390,103,093   57,455,976  
                   
Operating expenses:                  
Selling and marketing expenses(a) (57,130,290 )   (50,837,916 ) (7,487,616 )   (133,992,951 )   (140,614,281 ) (20,710,245 )
Research and development expenses(a) (17,061,618 )   (28,899,391 ) (4,256,420 )   (48,097,804 )   (75,611,663 ) (11,136,394 )
General and administrative expenses(a) (12,755,041 )   (27,520,025 ) (4,053,262 )   (53,350,498 )   (74,779,905 ) (11,013,890 )
Total operating expenses (86,946,949 )   (107,257,332 ) (15,797,298 )   (235,441,253 )   (291,005,849 ) (42,860,529 )
Government grants 12,593,190     1,110,121   163,503     16,371,120     9,202,371   1,355,363  
Operating income 70,876,729     80,956,313   11,923,576     127,319,759     108,299,615   15,950,810  
                   
Interest expense (3,181,184 )   (1,860,930 ) (274,085 )   (8,185,509 )   (5,609,889 ) (826,247 )
Interest income 4,843,500     1,705,239   251,155     14,650,950     7,073,118   1,041,758  
Investment income 1,654,449     4,312,634   635,182     3,381,554     8,208,884   1,209,038  
Income before income taxes 74,193,494     85,113,256   12,535,828     137,166,754     117,971,728   17,375,359  
Income tax expense (7,778,647 )   (5,106,812 ) (752,152 )   (7,788,302 )   (7,514,361 ) (1,106,746 )
Net income 66,414,847     80,006,444   11,783,676     129,378,452     110,457,367   16,268,613  
                   
Other comprehensive income                  
Foreign currency translation adjustment 16,604,752     (21,210,855 ) (3,124,021 )   16,779,673     (14,663,948 ) (2,159,766 )
Unrealized gain on available for sale securities, net 853,726     1,033,589   152,231     902,000     2,199,260   323,916  
Comprehensive income 83,873,325     59,829,178   8,811,886     147,060,125     97,992,679   14,432,763  
Net income per ordinary share                  
—Basic 0.45     0.53   0.08     0.87     0.73   0.11  
—Diluted 0.43     0.50   0.07     0.85     0.71   0.10  
Net income per ADS                  
—Basic 0.89     1.06   0.16     1.74     1.47   0.22  
—Diluted 0.87     1.01   0.15     1.69     1.41   0.21  
                   
Weighted average number of ordinary shares and ordinary shares equivalents outstanding used in computing net income per ordinary share
—Basic 149,139,114     151,421,638   151,421,638     148,880,453     150,478,559   150,478,559  
—Diluted 153,149,234     158,776,078   158,776,078     153,031,577     156,297,293   156,297,293  
Weighted average number of ADS outstanding used in computing net income per ADS
—Basic 74,569,557     75,710,819   75,710,819     74,440,227     75,239,280   75,239,280  
—Diluted 76,574,617     79,388,039   79,388,039     76,515,789     78,148,647   78,148,647  
                   
Note:                  
(a) Includes share-based compensation expense as follows:                  
  Three months ended September 30,   Nine months ended September 30,
  2019     2020     2019     2020  
  RMB   RMB US$   RMB   RMB US$
Cost of revenues 76,852     192,396   28,337     214,621     479,900   70,682  
Selling and marketing expenses 1,332,752     2,782,878   409,874     3,041,915     7,273,878   1,071,326  
Research and development expenses 1,385,910     2,986,491   439,863     2,257,838     8,068,468   1,188,357  
General and administrative expenses 3,266,058     4,595,381   676,827     6,323,852     13,397,158   1,973,188  
Total share-based compensation expense 6,061,572     10,557,146   1,554,901     11,838,226     29,219,404   4,303,553  
                   


NIU TECHNOLOGIES
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
                   
  Three months ended September 30,   Nine months ended September 30,
  2019   2020   2019   2020
  RMB   RMB US$   RMB   RMB US$
Net income 66,414,847   80,006,444 11,783,676   129,378,452   110,457,367 16,268,613
Add:                  
Share-based compensation expense 6,061,572   10,557,146 1,554,901   11,838,226   29,219,404 4,303,553
Adjusted net income 72,476,419   90,563,590 13,338,577   141,216,678   139,676,771 20,572,166
                   

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


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Niu Technologies Announces Third Quarter 2020 Financial Results - Third Quarter Total volume of e-scooter sales up 67.9% year over year - Third Quarter Revenues of RMB 894.5 million, up 36.7% year over year - Third Quarter Net income of RMB 80.0 million, compared with RMB 66.4 million in the third quarter …

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