Q3 2020 NIU Technologies Earnings Call
Good day, ladies and gentlemen, thank you Mr. Tommy by and welcome to the Neo technologies stuck water 2020 on these conference calls for.
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Now I will turn the call a whats your Mr., Jason Young Investor Relations manager, a New York technologies. It's a young please go ahead.
Thank you operator, Hello, everyone and welcome to today's conference call to discuss new technologies.
Third quarter 220.
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On the call wouldn't you could say a walk the talk for a young Lee and I would.
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Now, let me turn the call work for yet.
[noise], Thanks, Teresa and thanks, everyone for joining us on the call today.
We have a had a strong growth in Q3, a with our total sales, reaching 251 called a unit.
67.9% year over year increase the flow.
Excluding the China market reached 245000 units, a 70% a year or a year increase where the Boise that international market research.
5600 units, a 6.3 per se year over year increase.
In the first three quarters are still spoiled reached 451000 units a income.
A 43 per cent compared with last year.
The all a strong growth in China was driven both by the market's Dr and our operation performance in a new product roll out market share and channel expansion.
So first let me quickly comment on a world market landscape in China.
No the oral electric bicycle market has increased by 30% to 22 million units in the first nine months. According to a minutes for LP industry any information technologies.
The increase was driven by two factors first a post called a Nike set them a lot to a high demand up individual mobility devices at a more people find electric bicycle a more convenient see for me for the daily commute.
The second a with a golf from 2019, China Electric bicycle standard mostly be started to regulate it would seem to treat with license plate removal of non compliant products and a such create a a safer environment for the users.
Lastly, with a lithium ion battery cost continue to decline the electric bicycle with a portable eating line batteries become more affordable.
With estimate that 20% to 30% in like a bicycle this year on anything.
First a 10% to 15% in 2019.
No I mean, a fast growth of electric bicycle market on a particular to meet you know I'm, a big ones well talk Stellarone I for a new product roll out marketing and channel expansion.
That's a when they shouldn't in a last earning call. We introduced the M model in Q2, and a best modeling into line both of them to unmask the hurt as a family the <unk> up our signature and product view as a from copper electric bicycle in Q3, two one and Matthews accounted for 18% over a total sales volume.
Meanwhile, we also reached a goal a few it's a family without a cheese zero G to an average MACI three series G.
She is there a entry level product with a much at the G.D. true 18 campaign with Geo Chyone GE to cheat three a goal for years now serves the full range felt a customer's needs from electric bicycle to electric motorcycles in China with the price is starting out a 22 99 RMB.
The current who was a serious sales accounted for 37 per cent over a total sales in Q.
Free.
No a successful long true Adnan G series continues to demonstrate a strong capability in product supply on the wrong.
On a more with G series actually price that 29, nine RFP it a lot.
Who covered the mic and comes from a second an opening up more markets in a lower tier cities, which accounted for more than 70 per cent electric fighting for market.
[noise] well supported by the newly introduced product, we continue to expand our footprint throughout a store.
Store expansions as a new market entries.
Now in Q3, we increased our dedicated brand a store to a thousand 266 stores a increase close to 200 stores as compared with a Q2 this quarterly new store at what the all time high as we significantly increased on a free retail expansion.
Now despite a fast increase up a number of stores our per store sales also increased by 40 to 50 per se you Q3 year over year compared with the same time last year.
This does a squeeze a healthiness of our retail operation at older tools to work into a sales growth and we're highly profitable.
This is also a good indicator for future a retail expansion, we are accelerating new store openings in Q4, this year as well as in 2021.
Furthermore, with a goal a series we weren't the only able to consolidate Albert leadership position copier cities, but also able to build a good retail presence in the lower tier cities.
To support a retail expansion, we also scale up our marketing activities in Q3 on.
On the mass media from we kicked off for a basket of free. This is a new campaign and partner was the hottest on line come to teach a show called a street that sometime in Q3.
This company with a quarter that asked for advertising and on my show with more than 200 million views into action with all social media channels like though even quite so we child way for.
Also at a high teens subways and buses they generate a a total of 800 million brake exposures and continue to eat handheld credit image as a coup lifestyle brands.
We also continue to be the operating image with a co branding effort. This time, we worked with a gun done a popular Japanese cartooning kind I rolled out a gun to a special edition based are a mess product. This co branding has received quite a bit marquee hype with close to 50 million abuse off a new gotten them content across multiple channels.
No let me color to the overseas market, our overseas market reach to 5600 units a smoker sales of 6.3% year over year.
Well in fact, we had about another sell the orders in Q3, not able to a shift in time due to a scarcity of international shipping.
Not even without delay a thousand orders this demonstrates a swing back from normality in the overseas market as our Q2 sales overseas for actually down by 62% year or a year.
This is only the start at most a people your core demographics are working from home. So a more individuals goes back to work for but we'll continue to see growth across all markets for individual mobility.
In Q3 also increase a flash of a permanent stores to hunger for T. from 91 in Q2, a year to date would have added 88 flashy premium stores.
No more than 40% our sales from Brendan factories and premium for doors.
Similar to tied a market.
Continue to expense.
Current retail footprint with redness actually back from its doors for Q4 and 2021.
Along with our retail expansion, we have also a whole effort in a social media was close to 800000 interactions on Instagram and Facebook.
Now, while we are watching closely the coping Nike situation globally, we're quite confident that our international sales will return to the healthy growth in Q4 this year.
Now I will turn the call words, a hearty to discuss our financial results.
Thank you, yes, Hello, everyone I have a question for the content that's either income heavy.
The most a lot of movies you can tell from a seekers true.
Other sites and there's nothing that.
Although they do a whole financial performance, we have a for into the sort of put a secret that Seattle.
Out of line from that's for Monitory, Ficos RMB unless otherwise noted.
I will kill a suite there was one reached 200, a 51 from a unit increased by 68% from year over year China.
Hi, not seems a lot of increased by 70% as a result total retail sales network.
A question.
For that launch.
No sales would have increased by 6% lower than a fishing than they do to be thoughtful of course, Nike and a difficulty for for containers.
Sure.
We expect some of this challenging for continued into the fourth quarter. We are currently working on a different he needs to.
There are two a good evening.
He was a boost from international markets.
Regarding product mix as we launch a few you put up the mix has changed a continent.
Vince you, having a computer a phone call for a sense of total volume.
I'm here, it's a comedy for 23%.
Here is a kind of a slow 28% and a goal this year is a comfortable 37%.
The 37% from a go what's your 77% it's from the meat production. She is there a mobile.
Maybe 10% from can do on a go.
Hello.
A high percentage of GE, a little seems a little had a negative impact.
She was a U.S.T. and a quantum margin.
Okay.
By 37%.
I just like a for me.
With the guidance with a wider than others.
The increase was driven by higher he was one of the girls well for 68%, possibly.
Partially offset by a decrease in having your price water for.
See a from 19%.
There are a few key driver for the U.S.P.B. class.
First it was a low price model T zero net could be affected by a lot of 11%.
Second the changes in product mix automotive, especially lower for some people to do it from the high class since you put a net covey effect you have to see bad luck for per se.
Third, let's say within a promotion with your back because I'm a customers affected our margin by a 1% to 1%.
The remaining three per cent decrease is a monday due to a relatively slow a gross is there a possibly a for the holding share and ovation due for the impact from a coas Nike.
With that for some of this drive a confusing for fourth quarter. Therefore that he has a team.
Certainly true for Lucky expense decreased by seeking a percentage.
Well for margin was 20.9% 1.3 percentage points a no without income not for you.
The lower gross margin was a Monday due to a few factors.
Right.
Promotion a these comments, we will pursue and a customized a second margin I feel for a 7%.
Because we opened a few of these costs on customers.
People, who see a marketing in a suit that that's.
That's a percentage of revenue policy within a month, but he was a buy sweep accounts.
Second we posted these continue to put up.
<unk> for the price list, a little enhance mckinsey effect on a market by a wrong 0.9 for that.
Sorry, Hi, a few with would have a meat and cheese deal, which has a lower run margin the impact that is a rough ballpark.
However, we were able to offset such a negative impacts from tees, even on a cost savings on battery pack and a view of as a component.
Well one of those teaching the margin for the product a relatively stable compared with both last quarter and a lot from here.
<unk> gross margin interest rate was a Monday cost if I see what you call that a disposal with total impact from 1.6% reach a host specific to this quarter.
Our total operating expense excluding share based compensation for 97 million increased by 60 minutes for 20% a year over year.
The increase was a monday called for by the higher R&D expense of 10 million for stuff.
<unk> costs on a design center.
Hi, a GM needs. That's a 14 million then they would they come to a foreign exchange of all types and a surcharge in a professional.
It was in a mckee's that however decreased by 18 net.
As I mentioned earlier, we offered a suit these talks and consumers we should affect our revenue and a margin by nearly a 0.7% without able to reduce our money fund interest as.
As a percentage of revenue.
<unk> expense, excluding share based compensation was a soft one full percentage controversies plus office assets from Q3 line.
Our government's Greg one for one 1 million tons in this quarter.
And he doesn't have a lower than the telephone thing for me.
Good luck.
The company a illegible for additional government glad we have a applied for a few 10 million from them and glass, but the pay much about government, we'll see like there's.
There's a little bit government grant income.
These men.
Only after we receive it in cash.
Oh share piece, a conversation a RMB 10.6 minute almost the same as what for me, having a second quarter.
Compared with Q3 lots a year it is a huge plus from either due to a new class left for you.
Yes.
I woke up that income was 18 million and adjusted net income for the second one moving a decrease from 25 for seven year over year.
The adjusted net income margin wasn't a 10.1% one percentage point lower than it used to be a year.
The 1% a decrease was caused by a few factors.
Gross margin was 1.3% a little worse, but it was offset by a high old free leverage which was 1.6 for that.
You have a little a governments, a glass, which negatively affect our net margins by 1.8 per se.
Wait for clues that can impact from governments a glut.
Adjusted net income margin has actually eat food a gives a lot.
Turning to our balance you got a cash flow.
Hold her was RMB 1.3 billion cash from deposits on a short term less than a year.
Proven well 300, a meeting compared with last quarter.
Operating cash flow with a roughly 300.
You put a possibility with used for a couple of receivable, which he was the you mentioned that the increased accounts payable.
Oh, a cut to spend this year, we're lucky 13, net and then they really need a two new store openings in China, even national market. Additionally, machinery and R&D spending we had a healthy balance sheet and a very strong cash flow in a sense.
No that's into a guidance.
We expect fourth quarter revenues for being a range of 565 to 615 minutes, a day increased 12% to 15% from year over year.
It's about to come to you. The sales would have rules are supposed to China and overseas a bucket.
He has he will decrease year over year due to the change in you put up for me, even though to what at least for the second time a sudden quota.
Yeah station.
For a lot, yes, we had a strong sales being assessed for me and that's not a for.
For share and we'll Friedman from overseas a market.
We do not expect such high sales in this quarter.
Drew a at least the Oh this from a share North region has refused to succeed.
As a result of course Nike.
Revenue and he has people share returns a usually a much higher the other with us because they they older not only scooters fundamental thing that's for style.
I mean, a fourth quarter when you're competing for the Sunday Hobbled retail sales net working in China, We expect to open more new stores at foster a speech and what's <unk> interest rate.
We are also looking on the construction.
Manufacturing facilities in total.
It's a view a better for tariff for.
For continued growth in 2021.
Oh overseas markets begin to recover.
Had a very strong order book for Q.
Q4, which is a good sign for deposit recovery.
With that that's now open the call for any questions that you may have line.
Operator, Please go ahead.
That's only ladies and gentlemen, we will now begin the question and answer session. If he was just a question you May press star one on your telephone on waste wanting to be a mouse.
To capture the request for me press, the pound or hash key.
Once again to ask a question. Please press star one from the telephone.
Okay.
We do have a first question a from the line false logic to one.
Please go ahead.
Hi, a management thank.
Thank you for taking my question a a three questions first a it.
There are several international countries in which we have local dealerships have a re entered a walk though a imagine a share the magnitude doesn't make a good thing pass a would you expect from these international markets a for for Q enforce potentially a first quarter 2020 was a and my second question is a somewhat.
For the first one a when should we think about a few will trend for for Q1 2020 won't give a snow in investing market since user experience crusher a ends.
Oil price G series products continue to grow as a percentage from even sold.
And by sort of a question as a.
With a broad to the competition.
Commencements share any insights on how we're thinking about a couple additions with a industry.
Industry leaders in the past, we have a largely avoided a competing directly with them by offering a products into for a price categories.
A somewhat change after hours a day slaw jumps user is a what is our strategy to continue to take market share from these legacy scooter makers a thank you.
Alright. Thank you I think those are great questions I'll try to cover the yen. So I've heard a couple of questions one three and a a party to cover two on the basic on a has to be a front. So I think from international Mark a yet I think our Q2 was our a worse case, where we're actually a few a decline of 60 plus percent in Q2 because.
A lot of stores closed you know in.
April may a show look towards a close them than a that gives a little confidence to our distributors in from a ordering because.
You have to keep in mind, a low the the Q2 sales you know the quarterly sales we see on the international usually there's like a.
That's actually the time, we ship the product so from a retail it's basically like a a court a quarter. After now what happens in a Q2 is most of store a closed on the battle for thought disappears I should know older anything that's why would start from a huge decline, but you know I mean, starting in May a you know store star.
For open and then that gives you a true Peter its a big confidence. So we're seeing a pick orders in Q3, that's why would be up to about 6%, 6%, but in reality I think we should have been more because we have like a dollar order of a scooters not able to auto door because is there really a scottsdale for gosh international shipping was containers.
We are actually quite confident with our Q for US you know from order book point of view, we're actually a lot of orders are coming in we expect you know a really healthy growth for Q4, but now the issue is actually it's a booking for international shipping containers. This international shipping actually the containers at this point it seems to be a.
A scarce resource adds a a lot of course in Europe, a you know there's not enough people working on imports.
But from a water perspective, we're actually seeing a huge a.
Order take up in Q4 for the international market.
I think this zone on the to see site.
No a little bit on the two piece I on the two piece that we're not seeing a great year. This year by to be most of our orders are for the for.
For the share operators share and operators. This there haven't really been doing well this year, because you know with a cold a 19 situation a with people working from a hole.
You are not seeing a pickup in a share operators I spoke last year, where we'll see a little share operators order from scooters. Both line I state that's from a Europe.
We are seeing a sound disappear, but they'd be they'd be the order has been flow. So but this is one where we're we're hoping that it would take a queue for the next basic a Q1 in 2021, where the share operators. A you know the orders from share operators for can mean a.
Because I think we're already seeing a recovery like for example, rebel from United States, They're already seen a recovery in term of moving the ridership in the United States.
So I.
I think for for that to be side were seeing poppy. This a Q4, but most likely Q1 next year Q on Q2 next year, we can see a quite a bit uptick on international markets. Now a lobby is actually a month, where we are a you know as we put on the or a you know a press release a we are expense we are a basically starting a.
A pre pre sales marketing can pay for the Indonesian markets. A this will be sort of a official entries for the Indonesian market. The actual sales or a you know the day revenue a won't we won't see that revenue in this year because a pre sales that will happen in December but most order fulfillment will be in February and March ish, but.
Hi, washer will add a healthy growth in Q1, 2021, and a potentially with the entire 2021, where you know basically.
Basically this a mark has a first step to enter to diminish a Marco southeast Asia, a the major countries authorization, so hopefully that addresses your.
Good question number one I think that just last for me I think a question I was just a question number three.
Good for Harding to add on a question Evan true I think he had a five with completions we are.
Yes.
With a goal a serious we are entering into the mid market segments.
Our net.
Mid to high I think it's more and more or less mid to high markets to commence a.
Where I think the traditional players like yeah, you know other brands that.
Had a presence in that market.
But so far we have seen that a you know all a go a series has to be able to achieve a.
Quite a promising results you know with the entry price as a 22 nine I think we have a price product moving from 22 nights up to 4000 RMB a nickel a few in Q3 actually accounts for a book about like 37% on a sales and.
A basic it demonstrated.
We are able to when we compete with traditional bread in that market range used to be where the only wants to get on a high end, but now we come to the <unk> and with a man products with steel was a good looking these line and also a you know it.
I agree writing a experience income.
From a pot experience, we are able to gain a huge from a gain market share from the traditional a players and now the issue is we are not.
You know it is this really marked the beginning of this this journey, where you look at Q3, we added about 200 stores, so even with a digital to underscore as our per store sales actually went up by 40%. This particular, because with this net and proud out the stores are able to use this product to gain market.
Share a from competitors and it's also a lot to open more stores in you know are a stronger cities like a tier one cities tier two cities where were able to approach basic a target.
Marcus no consumers in a Cds as well, it's a lot to open more stores in a lower tier cities, where we used to have a little presence or zero presence.
So with that I think that's where we actually have more confident looking at whats going to accelerate the store opening effort.
I mean 200 store opening at the one quarter Hudson marked at all time high but we don't I think that's a historical time high and will continue to be our record from a store openings.
Now I'll pass to Hardie I'm, a to address a pricing part yes for the P.S.T. have you already seemed a sort of course non first a yes. He Minnesota court was done by 19% year over year in a fourth quarter you'd be Shaw for a week back to the U.S. He will compare with a Q4 last year. This decline as a seem to love for Sun.
Thank you.
I have a really heavy she's a little cast a U.S.P. byproduct credit so the EPS people, China, who is a serious yes. He for international market and then the EPS people that that's been a startup.
A few weeks for themselves and they have a different a solely for the EPS people, China has a sort of talk a price.
GAAP by 18%, that's 18% or about 13% was affected by a higher percentage of sales coming from GE zero GAAP.
A lot here, there's no reason for that.
A year on year gives you a pick up a lot of 97% of total sales volume that's.
That's a outside of a China, let's see if I run a 13% the remaining 5% came from the change you put up a makes for a lot animals, especially that have a lower steel.
Cynthia period.
Okay. If you look at least trending in China going forward.
A key areas, it's easier for a long.
Yeah, Hi, when would you expect the other for those seeking so some improvement there for the assay for the China market and if you compare year over year, we will have some improvement for the quarter.
That is okay, yes people international losses.
He has a unique quarter year over year change actually either in the quarter, a a war and let's see for international market increased by 27% a credit.
He doesn't mean improvement mainly because of a small he was one of the airport is changing that he has a team for the international market. We have seen is that a good to stabilize we only ends after a lot of nice held it is true.
Well for International line, and we do see quite a simple, but a new stable price and then lastly on the EPS he for essentially a mistake. So this.
It's one for the China market, there's a price was I think it a stable however for the overseas market into a significantly affected by how much an AD hoc weekend sales for this it's true hopefully type.
As mentioned in the in the call. This year, we do not have as much as older fluctuation.
Because in Q3 and a.
Moving to for therefore, we do see some pressure for they say, yes equally dot fiber from next year with a recovery from the international markets. We do begin to see some of the new orders coming in who comes to share.
From what Weve himself has also a couple of the.
Sure.
And also for the shooting.
For this par for duty pressuring the Q4, but for next year, we do see from some potential for improvement.
So you saw from I think if you compare year over year in the fourth quarter. The S. P 50 times, assuming a percentage if you compare quarter to quarter with respect to fourth quarter EPS PVD tool a head start a call if.
If you look at next year and IP for Q3 into Q4, EPS seem to be a quite a puppy.
How much do you have for that for next year its a.
I'll give you a second question.
Oh, thank you so much better equipped.
Thank you.
Our next question coming from the line up for likes Potter from Piper song from please go ahead.
Okay.
Yes.
Great. Thank you guys I.
I guess my first question is regarding capacity in a charm. Joe you mentioned your sales in the process of expanding the capacity there how.
I guess, what's the update how much is left to spend in terms of Capex and what does your annual capacity now versus what it will be next year.
Yes. That's me it's simply a question currently a war design capacity around a 1 million units and a new capacity. The new factory has another 1 million capacity and we plan to lead a new capacity onboard a sometimes even a second.
In a quarter next year because from a second halted a peak season starts from a total capex for this new capacity they'll be anywhere between 100, a meeting 220 units, including does that include a leading body to construct a <unk>.
People pull back and day for me take off a lot of thinking about a five.
Class a six month a coffee construction.
What we saw for do a question.
Okay, Yes, yes, thanks very much.
I was wondering if you could talk a little bit about a promotions and some of the price discounting you talked about also in the quarter, which was a.
Which would have an impact on gross margin and ASP for what were the.
What products, where are you promoting specifically what a what promotions where are you running and how long do you expect to keep doing that.
Yes, I think a very good question I think for.
We have a a different a full that kind of a promotion they see a heavy set both 30 years and also from last quarter. It became a weekend cash flow talk to come from us and they can use this cash.
It wouldn't be back to supply therefore with about a one in a mini R&D for the full for leased for a motion Mississippi backs. You left is actually from a revenue and also a lot of off margin and we have this kind of a promotion many because excuse me I mean, you kind of a clean I can keep for a more offensive from for for class. Therefore, we did you give a give back these cost to us.
A few months is a better that we spend money differently. However from Q1, yeah. We have no such a promotion says therefore weve small changes for these kind of promotions once a kind of a one all promotion or in a simple.
Okay, and what's the specific for any a certain types of products or was it for us.
The only thing that Ross, so basically to a customer and how to embark on a customer go to the store and he's a because as a model they like that they go through a lot for us income they usually a everyone really.
Yes.
Okay, something someone got 100, a patch for Paul.
It's actually for this it was a class a kind of gotten out from southern to cash flow policies tend to be a day talking about lease on a suicide.
Okay property thing for them.
Okay and then a the last question from me is on the regulatory change.
Can you remind us when exactly the new regulation will be in force and it sounds like you do think that you're getting.
Demands a because.
Because I know people are obviously going to be force by the new regulation to replace their scooters.
Do you think that people are doing that now when do you expect the.
Most of that demand to materialize.
I liked it depended on C.D. by city, a first of all the new regulations, you know basically they didnt have a temporary a new I wish it was announced in 2018, they start Dream force.
April 15th 2019, a different city actually different a give different year for example, see they'll be a team. They gave temporary license plate in you know in 2018 and as they say so.
Basically the temporary license plate you can't have a.
Yes, the scooter for three years, which essentially means that some of the scooters for <unk>.
That's true by 22, and a 2021 or.
20.
I've been a good early 2022, so which where it will move to expect to see what do you call. A you know a a.
You know the who is replacing a replacement uncomplaining temporary license scooters, starting actually starting next year a.
I think that that's also there's also a indicator I think this is actually a driver for us to quickly expense you know.
As a more source in those cities a in highly regulated Cds and a good thing for US is actually our market share and our presence is actually much much stronger in a highly regulated Cds because most of a highly regular Cds art, a tier one tier two cities, where you know even a tier three tier for cities I think.
You know that the regulations are still being force with Larry Some places where do we.
Where you won't see this uptake in commodity replacement yet.
Okay, great. Thanks, very much guys.
Thank you.
Our next question coming from the line of been Wong from Credit Suisse.
Go ahead.
Thank you I actually also kind of free ones. The first one on a very tough Donegal, although a market because if it was a couple number a from MIT in a number three quarter on the overall production in China increased by 61% yield per unit and a full you actually outperformed yes, my view, maybe on putting that used to especially in the high interest only.
7% gross booking I'm, a bit sort of from Cushing aside from the high Mckesson interest much slowing down in a meeting a key driver and a half for that's a conclusion.
Actually because of the current she's time, if the commission Moody's.
[laughter] on hiring and then though in some good people don't care, so it's hard to that price.
On the send a defense to come how such a big difference gross that's number one and then to about a I don't think that's crazy things going wide a.
Somebody.
In a why not put a huge coupon rebounding.
Okay on a December.
I don't see non remedy a we know what we cannot get a number lets say watch a 50 saw the net cash which means that November December a morning, 50% growth. So can you elaborate when a market conditions correct or not I don't know that November December.
It was right why didn't we didn't have a such a high close out a bit deep enough trouble. Meanwhile, what's the cadence for next year for just a few one based on the November and December momentum.
Second one instead of once I found a deal for us and just thought because.
If you'll see in a passing a one year you have to.
Non <unk> quite a few showcased <unk>.
Hi, and Oh, Hi, based doesn't see expense Neal put a pretty brief any mono stones and no. One will be next product volume for us and why this new countries a moody playing bono so how we sort of think about.
You want to do for US plan for non coming years. Meanwhile, what's your cost guidance for next year, how many you end up with you on.
Thank you.
Hi, Thank you for just for the question as well.
Great I do I think if you look at the information published by.
I mean, it's a commission technologies information he didn't fit technology. There a Q3 you'd have to take a moment that you'd like to bicycle well do a little needs anywhere between 20% to 50% and on a leash seriously you must be a tough okay.
Oh, a 70 at my time gasoline.
17%.
That's a teaser into your line.
A key driver for us to grow in a China and our high had a then you'll see a it has a really thought about that I think a lot of the key reasons. It's a.
You like a religion with you for you accurately assessment hobbies.
In sum, we see me to that so that for the banking for there's a lot for function. So.
Got it maybe for you got a function, we will not be able to a path to Lisa.
For the bicycle.
Because of that that's definitely GAAP and I do not a lot to pay a high faisel.
For the high a.
Hi price model I.
I think that's involved in P. reason why a high price.
I'm here with a total that.
Because.
Okay.
And for your second question has a.
A ceiling.
Total in November and December I think a who have range roughly a little.
Okay, I think a former.
The way the cash.
For the he's a possibly because of the operational disruption you almost have to because.
Had a week you adopt a unique slap a for usage.
No the channel Patrick a has a huge demand this had a quarter. Therefore, we have to make some in 10 years bought a missionaries flow actually from they make sure. They have a safe environment to put useful to pick back in November and December because of that I mean, it's almost a suit was one she was a dilemma and also a miss it.
Why are they so that's like a see a higher.
A lot but December.
Excellent.
They already mentioned, we continue to open new stores in China.
Already see our multi while for us to open new stores and the losses She's doing them. All we got a model for says they have a woman them all we have a.
Saturday I was hoping for that.
Increased though it was a little bit.
Personal line.
Let me make a few drivers for continued listing.
December when that gets kind of.
Good day.
Yes.
Lessons for <unk>.
This call.
In terms of total.
For not a lot I think I gave you a comments a few women I believe to net income and tile.
On the.
Next is that for a new products and he he why aren't you a I know something you'll be productively losses.
Early you see no they have not entered into mass production yet.
After a while for trial.
Hopefully.
Everything is a key to watch when you'll be yes, then the hockey stick or not it seems like from a much higher lead here because it's a pull in 19 overseas market for different reasons, we got a healthy because once you I'm looking for.
Yeah for we postpone that.
Production for some of the model for fulfil multiple he keeps you out.
You will be when that humans movement gosh a.
Huh.
A seasonal.
China market and a new production losses somehow a second of all her a what do we need some on a new model without kinda give me for that and how to use the class a win for us in China for the whole.
But the bottom line, what do we usually a became for use our goal and feeling for that.
So a lot, but I think for the South East Asian markets.
Especially as a lease you might see simple revenue separately.
Moving to a large losses, all that you pull up a cycle a C.
Okay, and we'd be happy for pre sales.
Uh huh.
How about for class a wasn't really a sufficient line. They don't want to comment on that you put up a notch how holding true.
Yes.
Yes.
[noise], yeah, it is a dominant to restaurant or something.
Okay. Thank you.
Thank you.
Me, how a mix question from the line of Jim Jones from Sea ice fishing.
Please go ahead.
Hi, Thank you for taking my question a visits per se I have two questions. The first line needs about this start from channel expansion. So a whats our target next year for store extension and we see a other competitors opening stores at higher speeds. So a I want to know what a.
A where a major concern some difficulties in terms of opening stores.
And my second question is we are going to a.
So 60 schools.
M- motorcycles in Indonesia. So can you share some details on our strategy moving himself a unlike a crude production. So that's a real assets export holds a fear that that creates here and I were channel and also a where a compared to a our products compared to the local brands.
Total psychosis and also a maybe a long term sales targets. Thank you.
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That's a.
No I think for things I didn't go to questions. The first one for opening so as I mentioned earlier. So in Q3 were able to add a folks who under stores and a for the keep in mind Q3, usually there's a Q for USI is been our busy sales quarter, where our distributors are not willing to open stores, but.
This year actually was that for we see we actually have a capability to open 200 stores from one quarter and a no. We're actually thinking about that game in Q4, a opening more stores than Q3, and a actually has a higher ambition for next year.
So with a you know.
It depends a I guess it really depends on probably wrap up a few for this year, we'll have a more relative go for next year.
So I think that that's done basically on the for expansion and more importantly, if you look at a beta here, it's actually a we have a capability to open a faster more 'cause a you a with Q3 with net to underscore a.
Our per store sales still went up by 40%.
So does that mean, there's actually a lot a room to open new stores has a six point.
So you can't you. This you would actually get to to have your a 300 400 stores from Q4.
And we'll see how that a depending on how fast its a construction can be a bit finished.
And with that washer will serve the guidance for next year going forward basis.
No.
With the international a with the Indonesian market I think it's Oh, yes, one where we'll have to initially out will be local it will be oh, it's what I've CKD met though because the Indonesia has a huge terror you shipped entire product from China. I think is a terrorist about 40% so that will make the pricing not relevant.
We want to actually enter the Indonesian market not we have a high end product for that we want to enter a stood out non affordable product level of affordable price range product. So we track share will you share where it would not be wise, a luxury product for a more a mass baby call me a product.
So those who actually right now we have a a basic manufacturing partner, Indonesia will help us to a set for the product even with some of the parts be locally sourced and that will actually.
Get to a cheap you know a lower.
Lower tariff for me she bought like a paid less than 80 per cent.
Because it's mostly on parts and a good and that's probably a habit for next year.
The later half of next year, it will see depending on how the sales force for goes.
We are you know we might have to actually a vast too good a factory Indonesia.
Hopefully that answered a question.
Thank you. Thank you.
That's helpful. My question Yeah.
Thank you.
Once again, ladies and gentlemen to ask a question. Please press star one on your telephone.
We have our next question comes from the line of Sebastian, but having a nice.
Please go ahead.
Hi, good evening I'm with the upcoming importance of the go for a series to what extent do you intend to use after sales to protect your margin like.
Thank you.
[noise] from I believe it would go a serious I think the after sales will be conducted by all where a friend or digital source.
He's a so it you know a.
From a from using rocket fuel to protect margin I think it's a similar.
Turning to a message.
The other suitors.
The the question we look at the actual margin. If we go a theaters is actually a slightly less than our lending a serious but not significantly less it's probably been a couple of percentage for that.
Because even though it's actually a mark has a lower prices a.
Somebody because it's using a a the.
A battery usage, it's not a it's not a C. M. A C batteries is actually a oh, a p. batteries, which actually its age a.
Alternative to a but it's actually a cheaper than the C. M. A C a batteries.
And the sum than the lower end a go with here.
Doesn't have the a smile telus liabilities addo, though for people to actually take a series as a base a basic level.
You know it doesn't have the smiles he feels that actually helped to reduce a reduced the cost others use a price that flow.
But our a does support a product where it and users actually a little was not a out <unk>. The users can download the app and they actually Oh.
A registered a scooter app and to be able to receive the same level of after sales service system that flow.
Okay. Thank you.
Thank you.
We have a next question from the line of Paul gone from you'd be S class.
Yeah, Hi, Thanks for taking my question I for that.
One question you.
You mentioned a pathway for today.
A market is about 40%.
So that's why a youre besides a field such a window.
Oh, you Peel off the U.S sales <unk> and so.
Let's say, that's how it's going forward, but.
They know cold for speaking about feel a required.
Oh, yes.
No I think that's a great question. So I think a we are actually looking for what we felt a news that locals, but look we have a really got a sort of the infill.
Information yet so.
You know it was the acts would be to inflammation basically like motorcycle electric motorcycles I should cover about a treaties that actually that will solve a lot already issues as well.
Let me put it this way frankly, we'd rather have everything manufacturing time, now where we have a really tight control with our own factories into a quality issue or is everything on it from from a management complexity is actually much easier to get manufacturing China versus you know shipping parser, either nisha had been locally assembled a.
Manufactured there we underscore why the tariff was there a because a lot of a motorcycle brands our locally manufactured there. So there's actually a a user a locally protection there into that industry, but you know that opened up where it a tariff is being a reduced typically actually.
You know that actually a will change on manufacturing binding that's from all the reasons right now we don't actually we decided not to for example by a land where you go to our own factories as new share with simple still watch geography, but by using it more flat for you for your partner has assembled a.
A option at this point because that would give us a flexibility.
It depends on how that true.
That whole tree anything goes.
Okay. Thank you very much where a helpful I think.
Yeah.
Thank you.
Seeing no more questions in a huge let me turn the call back to Mr. Li for closing remarks.
Okay.
Right. So thank you operator, and thank you all for participating on today's call and a for your support a wheel.
Appreciate your interest I look forward to reporting to you again next quarter on our progress. Thank you.
Thank you all again this concludes the call you may now disconnect.
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