Q4 2020 NIU Technologies Earnings Call
[music].
Good day, ladies and gentlemen, thank you for standing by and the World come to New technologies fourth quarter 2020 earnings Conference call.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at the time as a reminder, we are recording today's coal.
If you have any objections you may disconnect at this time now I'll turn the call over to Mr. Jason Young Investor Relations manager of New technologies. Mr. Young. Please go ahead.
Thank you operator, Hello, everyone welcome to today's conference call to discuss the new technologies results for the fourth quarters when the 20.
The press release presentation, and the financial spreadsheet of him.
Postpaid net.
The relations website. This call is being webcast from the covenants on our website and a replay of the call will be available soon.
Please note today's discussion will contain forward looking statements by the end.
And of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.
Forward looking statements involve risks uncertainties assumptions on the other factor.
The actual results may be materially differ from the rest of day program.
Information regarding of the risk factors is included in the Companys public filings with the securities from the Tennessee Commission the.
The company does not assume any obligation to update any forward looking statements, except as required by law.
Our earnings press release and this call include discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and a recalculation of GAAP to non-GAAP financial results on.
From a call with me per day, our CEO of dark for a young Lee and our CFO. Mr. Hardy job now, let me turn the call over to yet.
Thanks, Jason and thanks to everyone for joining us on the call today. So in Q4, we saw a strong growth of a domestic China market.
The the Oregon market recovery from the COVID-19.
We have had a substantial growth in Q4 with total sales volume reached 150 felt a unit of.
A 41, 6% zero a year.
The sales volume in the China market reached kind of 37000, but.
The 35% year over year increase where the world.
So market growth by nearly three ex <unk>.
More than 12000 units.
197, 1% year over the years.
Despite the challenges the COVID-19 had on the market economic conditions globally, our 2020, a new year sales growth.
600000 units, an increase of 42, 8% compared to 2019 the.
The first world, even the kind of market the clip.
The 70000 units of <unk>.
45, 8% year over year increase, whereas the volume in the international market. We reached over 29000 units of plenty of increased from 2019, despite the challenges of Covid.
The 19 Lockdown had all of the key markets around the world.
Despite the initial impact of COVID-19 in Q1 2020, we have realized the rapid growth last year. This result was well in line with all of a breadth of growth strategy.
A two point all of a set for 2020 NPR.
And there are due to a strategy, where the rapidly expanding our product portfolio.
From the needs of different markets.
Of the urban commuter customers by leveraging our unique design and open technologies.
The issue of expanding our product range, we're committed to extending the reach of the retail sales network.
This will meet the pension to more cities, while simultaneously, creating a more debt.
The network and existing students.
The year of 2020 was the first year would put all of our need to.
Strategy into play and the way.
<unk> achieved significant results in both the product portfolio and the.
Sales network expansion.
In 2020, we introduced four new products to the trend of electric bicycle market segment the end too.
The I'm Ed <unk>.
A affordably price between RMB 24, 99% or 50 799, approximately 375 to $900 a day 63.
This core new electric bicycle product happening of each of the third.
Expected the target market accounting for 41, 2% of our 2020 sales.
The explore product covered the two major design style of a simple make the practical in a fully covered E cyclical with the writing range from 40 kilometers from the Nike delivers on a single charge leasing multiple consumer segments mobility needs at a.
Affordable price.
And also the electric motorcycle market had a spend.
The upon our particularly from <unk> plus product.
All of a key three series from 2020 per the new market, especially China volume.
Do you think of the MQ ITT, Florida, the national customers.
<unk>.
<unk> III is a degree of site was a factor Steve Ritchie from a 40 kilometers of 60 kilometers per hour and the price range from RMB 45 day night to RMB 67 days that book.
The complement to our electric motorcycle offerings.
For the Europe, and Americas market, we launched a new product called <unk> and the heritage of design style of our award winning.
M series and the <unk>.
Combined with our TC powertrain technologies.
Moving to ITT is the two battery electric moped with the top the up to 70 kilometers per hour at the range of 110 kilometers.
Simple chart price at a 33 99 euros.
Besides the scooter motorcycle product, we continue to reach our accessory portfolios in 2020, instead of our specialty lines.
150, new products with more than a one 6 million customers globally, we have a strong customer base of installed into the 47, 6% growth in the sector.
On the spare parts sales in 2020 for the time and Mark the last year.
Peter that we are on the right track, who follows us tap into this revenue stream.
Now of supported by the new product launches in the first three quarters in 2020 et cetera, all of our sales network of centers in Q4 in Q4 would add a 350 breath of the stores that reached a total count of 61.
<unk> thousand six sector and the 16th stores, the China setting a quarterly record of in store expenses.
Of the entire year, we added 566 stores much more than the last three years. Despite the COVID-19 impact in the first two quarters.
The only we were able to add more stores, we also strength of Qualcomm in more lower tier cities around China.
Now at 66 cities in China that has a fire of more new branded stores, a 30% plus a chunk from 2019.
Some of the international market in 2020, we have increased our market coverage to a 46 countries from 38 2019.
The additional 19 flex flagship doors in the Permian stores across the globe.
Outside of China will now have a 116 flagship a premium stores as compared to 26 at the end of 2019, despite the COVID-19 situation.
In mind that we continue to sell our products through a network of more than some of the theaters outside of China.
So essentially all of our new factory of a premium overseas tours will be off of a great benefit.
Due to a LIFO growth as we expand the product range to meet the mobility.
Of the region.
Now in addition to the channel expenses in International market. We also made significant strides in our <unk> division, especially sales to support the scooter sharing operators.
Most notably is the contract we signed with line in Q4 2020 of the largest of mobility share of operators globally.
All lines total solution provider for the multi share globally and our support of 19 share operators in Europe, and Americas with our total number of vehicles. The if there was a doubling in 2020.
The mining hard tissue scooters play a key role introduced the electric mobility to a wider range of customers.
The first step in the housing us redefine urban mobility globally.
To support our new point of our growth strategy of aggressively entering.
Mobility market.
So the expanded our branding and marketing activities.
Starting in 2020, we investigate all advertising in mainstream online television series of popular shows in China, which accumulated over a two 5 billion views online offline during the area of all of those programs.
We continue to invest our effort in new total media channels like a bogey on Firefly flow with our OEM quite of a quarterly views, reaching 50, new instead of 20, respectively.
Represent the total ASP increase over 2019.
The overseas market in Q4, specifically, we have up of our effort in social media with close to $1 3 million into action.
The brand on Facebook.
Particularly hard of the top of American Supermodel was thought of writing a new scooter in New York City with strength in the September 2020, which was featured the bulk and other media as well.
We also continue to invest incorporating a marketing activities in Q4, we launched the MLP electric bicycle Camden, a limited edition for the.
The rest of tandem as the incredibly popular Japanese cutting period.
A few short day after the launch of the project will not more than 50 million unique value across a variety of social channels.
Not all of it includes the active user also created another interesting stories in 2020, we had a new fan from Shanghai will spend of 260 watt range of along the entire quarter of China, a masking more than 30 thousands of kilometers.
In the U S. A we have one of our OSB in the either making a video of extreme strength right out of the backup claim on a new book.
And the customers the value decided to modify our traffic kind of with traditional value niche crops. The panels, highlighting how easy the policies and promote sustainable mobility.
And a quick funds back for you as of this.
This morning of users around China.
All of that more than a seven 8 billion until research a variety of distance now.
Each of those kilometers a task.
So the important role we play in a day lifestyle, our users who depend on us to get to work to work on the Holdco outflow of casual crews.
Both branding and marketing effort has significantly increased our brand awareness new is the both of US as the most valuable brand in urban mobility, China's a manager of a leading financial Mac mentioned the equity in China.
As we wrapped up a successful year of 2020, we are very optimistic for 2021.
Our total market in China, the lithium ion based electric bicycle model type of market will continue enjoying rapid growth that can be directly attributed to a handful of key factors being debt free.
First of all of the overall electric tubular market expected to grow by doubling by double digit simply because the old lead acid battery scooters will need to be required to keep the variation of the temporary licenses granted back in 2018 on 2019, starting this year. This will create additional demand of more than a 2 million units.
Every year or the magnitude of four years.
Secondly, the downward pressure on the cost of lithium ion batteries will help to further increase the penetration of the lithium ion battery powered by the new motorcycles.
Just in the last past two years with a officers of this trend in 2019, the lithium battery cover the E bikes motorcycles accounted for less than 10% of the total market in China and by the end of 2020, it's already a high teens.
So in summary, with the rising tide of market for the lithium battery powered bicycles motorcycles.
Motorcycles.
By the regulatory compliance combined with a lower cost of the lithium batteries hardware at the end.
Incredible facility in China that we at the new are poised to capture a significant growth from.
Now excited was the market potential we launched a year of new campaigns during the Chinese new year, this year, which happened to be the year of ops for the year view the Chinese.
Multiple platforms and we generated more than 200 different views of expert in branding and marketing have acted as a catalyst in driving our Q1 sales from 2020 a month.
For the international market and the COVID-19 situation.
Some of it is a individual urban mobility demand. Despite the short term impact on the retail operations in 2020.
Besides the electric motorcycles all of this.
Significant market growth in mainly in the urban mobility sectors like power assisted bicycle kick scooters and other form factors.
As part of our new point of our growth strategy, we have diversified our product portfolio of into the fast growing market with our first part of the bicycle the iOS either one will be shipped in the first half of this year.
We are developing more products in those categories for immediate release to capture the market growth across all segments.
In addition, we also of the return of course its share of mobility market starting from the second half of 2020 again driven by the demand for the individual mobility.
We are well positioned to capture the growth in the market in 2021 with more offerings for our share of operators.
The overall product development, we have 10 months of new product the R&D pipeline for the domestic China market Europe of American market in Asian market.
This product will cover a wide range of urban mobility category from.
The micro mobility to more urban mobility.
In a few short weeks from now in April we will post a spread global product launch event, where we will lose a few a handful of new products that will be ready for purchase in the first half of 2021 for both of the China and overseas market.
Overall, we expect our total sales volume for the end of the year of 2021 to surpass 1 million units.
Eight of the pilot suitable product offerings, our sales network expenses will also be accelerated.
In April of this year, we expect to celebrate our opening of our two thousands of branded stores in China.
And we target to further extend of the opening of our stores throughout the rest of 2021.
International market with the ease of COVID-19 situation, we also expect to accelerate a flagship.
Openings.
Now with this let me sort of harder to talk about financials.
Thank you, Jim and Hello, everyone.
Our franchisees content of the CCAR and the comparisons you need.
I've also observed in the <unk> format to our IR website.
Yes.
As I review, our financial performance.
Referring to the fourth quarter of takeout.
And that the otherwise.
That all monetary figures.
Unless otherwise noted.
Our Q4 sales volume reached the 150000 units increased by 42% a year over year.
China's total increased by setting up the stack as a result of retailer sales network expansion new product class insurance interest.
And also a strong online sales.
In the fourth quarter, our online sales volume increased by three times compared with Q4 2019 and the site.
The successful.
During the double 11 double 12 shopping.
Shopping festivals.
Have a 35% growth rate in China is higher than the general market growth.
According to the.
Timing of electric bicycle market grew by about 17% in the fourth quarter 90 day, but at a higher growth.
For the international markets, our Q4 sales volume with the 13th Southern Union.
A significant increase compared with the pulse of the unit in Q4 2019.
Net sales one of its higher than our initial expectation mainly due to the additional debt we managed to get of sharing operations in overseas market.
Thank you, Mike as the product mix.
I am here with a 120% of total sales volume due to a strong overseas sales.
Last year, it accounted for 24% and to add to that new product.
For the class.
He was here accounted for 25% a go.
<unk> accounted for 30%.
On the 30% of quality of life.
Pretax income.
Perhaps tease me of a model.
A high percentage of net sales volume.
When comparing Q4 2019.
However, when comparing the Q3 the percentage of volume from T zero decreased by 7% and as a result, our AFC from China's contract sales.
The improved by 11%.
Total revenues increased by 25% to $672 million.
Above the guidance, we provided the earlier than they do to the higher overseas sales for sharing operations as I mentioned above.
From a revenue increase was driven by the team was one of the growth of only 2% cash.
Partially offset by a decrease in revenue per scooter.
The ft of 11, 5%.
There are a few reasons from the FTE decreases.
Firstly, the sales of low price model excuse me of a reduced salary asking kind of.
The result of China's could I ask a decreased by 16%.
Second the lower spare part sales to oversee the Bakken natural a decrease.
The ASP for century, and a service by 2020%.
Certainly the high proportion of scooter revenue from overseas market.
The offset of turned back in fact as mentioned above.
In total the ASP decreased by within a 5% in the first quarter.
Oncotype Overcompensating the power ASE high range from two sides.
The net Youtube channel and product mix.
Gross margin was 25, 2%.
<unk> nine percentage point somewhere that this time last year at four three percentage points higher than Q3.
The lower cost margin compared with last year with the lemonade caused the biopsy with one of the things the distributor in China.
In the fourth quarter of 2019.
China sales volume grew by only 16% and the <unk>.
Finally, tying back a few minutes.
The sales volume targets.
Therefore, we came along with a retained interest in tissue per day.
In Q4 of 2020, most of the China issue, Matt It was one of the package.
The bank of 11 eight.
When comparing Q3 2020, our gross margin improved by four three percentage points than they do to a true reason.
First a favorable change in revenue mix being.
Being a higher percentage of revenue from overseas market and also higher percentage of revenue from essentially the cost of service.
<unk> gross.
Gross margins are higher than average.
The second improved the gross margin from China into the sales as a result of continued harvesting.
Despite the sales of low margin TDD Romano, our China is consistent with the gross margin.
Moving to a higher percentage than that of 2019. When there was the only thing with a team of more models.
Our total of the impact including share based compensation of $110 million increased $503 million from 27 percentage year over year.
The increase was mainly caused by a higher sales the margin of 10 million for the retail it seems network the fashion.
Spending of the marketing activities.
As a percentage of revenue our sales marketing expense excluding share based compensation was eight 6% lower.
More than eight 8% in Q4 2019.
R&D expenses increased by 10 million, let me from staff costs and the feedback spend because we have more products in the R&D pipeline, many of which will be launched in the second quarter of lithium.
Our share based compensation expense of <unk>.
The $10 4 million.
Similar to the amount of interest rate.
Comparing the Q4 last year it had the increase of $2 six minute due to the new glass plant volume.
Our income tax expense was about $14 million 13 million of higher than the same period last year.
The high income taxes.
The impact on our net income.
Some of our continuing have used the after two minutes of the law and therefore began to pay corporate income tax.
All of long term income tax rate is estimated to be about 20%.
Full year 'twenty 'twenty, one our average tax rate and as mentioned we took the is up 15% basically because of the cash did you use that to make it a lot from one of our entities in China.
Our GAAP net income of course.
$58 million and adjusted net income was $69 million.
The higher than Q4 2019.
The adjusted net income margin was 10, 2%.
Two six percentage point at a lower than Q4, 2019, mainly because of lower cost margin of error of one 9% at a higher income tax expenses.
The income tax expenses as a percentage of a revenue was 2% one 9% higher income lots of them.
If you compare the adjusted.
Adjusted the backing up before tax.
Q4, 2019 of 2020 and the increase.
The topic of 9 million 22 million a year over year a growth of 19%.
Turning to our balance sheet a cash flow.
We ended the quarter with RMB, one 1 billion in cash cash.
And a short term event.
Lots of investment.
Our operating cash flow with 19 of 116 million, mainly due to reduction of payables of 119 momentum as a result of seasonality.
On a full year of anything of our operating cash flow was a positive 460 minutes.
Our Q4 cash expenditure of with regards of 41 million mainly related to capacity expansion of 21 many of you.
You saw a building of 13 and the R&D spending of seven minutes.
A full year basis, our cash expenditure with about a 115 minutes.
Now, let's turn to guidance.
We expect the first quarter revenue to be in the range of 420 minutes to 478 million a decrease of 80% to a 105% a year over year.
With that let's now open the call of any questions that you may have a lot of.
Operator, Please go ahead.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish to ask a question now please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press the pound key once again, ladies and gentlemen, the stall one questions.
Yeah.
Yeah.
Once again, ladies and gentlemen, if you wish you ask a question now please press star one now.
The first question comes from the line of Vincent Yu from Needham and company. Please ask a question.
Thank you Matthew we'll take them. That's my question and congrats on the strong year I have three questions. The first question is a.
Can the management share with US a news planned for offline store opening this year I'll tell you of any one a whole heads of school openings of course, that's going to for a good.
There's a strong consumer and distributor of interest.
My second question is about a the unit sharing.
Operators can lead the can you talk about how many units true a sharing operators contributed in 2020 and how big of a future.
Opportunity.
Global Liberty sharing platforms, a customer reported then in terms of any of unit sales in 2021.
Mike. Good question is about gross margin outlook can management share some light on the gross margin outlook, which we include one how much cost savings can we expect to the generated from the O N and the battery pack respectively. Thank you.
Okay.
The Facebook until the question So let me quickly cut.
It's a cover the first question to most of our openings.
We actually we I think with all of them diversified product portfolio.
What are you starting a.
Q4 last year and even starting in Q1 this year.
You see acceleration of.
The new store openings.
And you know.
As I mentioned in Q4 last year.
The open more than 300 stores, so actually in Q1 of the theory.
All of that by the end of Q4 last year.
1616 stores now.
That would have our 2000 store open.
Basically early April.
The Chinese new year free.
We're able to open another close to about a 400 380 something stores within the three months.
So that's actually a tremendous growth and we actually we do expect a slowdown I think.
But the more product coming out, especially with new product coming out in April we expect to open more stores you mean.
The Q2, Q3 and Q4 this year.
So I think right now of about 60 minutes.
The end of last year 600 stores.
The the.
There is no minimum we can't add a thousand or even more than a thousand 12 under the 200 stores this year.
And from a second class you have out of the home many units of resource to shareholder returns during 2020 in during 2020 because of the ramp.
In the top 100 unions true Shanghai creators, that's a couple of close to 30% of our total sales in overseas market and non.
The only the contribution from channel operations accounts for 20% of a 70% of out of the overseas sales volume but.
We also expect a similar percentage in 2021.
A final set of question about the gross margin outlook, a first of all of what do we can share with you as you enter 2020 the cost savings the.
Contributing to a full two five per cent of the margin compression. During 2020. However, during 2020, because a lot of Standalone margin excuse me of a model that had a negative impact on our class a market rally able to offset that with a a.
Cost savings in the most of that one of the protection between 2020. One we expect a similar per center per day.
It is a cost saving.
All of the partners, so the lithium batteries and because of that range factors in the gross margin will be more of that April similar to what we see during 2020 for.
So the part of the product mix as already mentioned by again in 2021 launch further products new products in the.
Price range of similar to what do we have a T zero and therefore that price actually have enough to be put on the total market, but a reality.
A comprehensive debt that we can use the cost savings of 12.
On the negative impact and to keep out of my simple. So they said the answer to your second question.
Thank you. Thank you very much.
Thank you. Your next question comes from Alex Potter from Piper Sandler. Please go ahead.
Excellent. Thanks very much. So my first question is regarding guidance of the full year scooter delivery guidance of around 1 million units that was good that looks a bit around what we had expected.
But the Q1 revenue guidance of a little bit weaker than what we thought so it implies a.
Sort of a pocket of I know, there's seasonality to consider here, but it seems like the Q1, a sequential downtick in revenue.
Q4 is a little bit bigger than we had expected. So is there anything to call out there or the strips normal seasonality.
I think the first part of the way in the normal seasonality because even though many of you can a while that the Chinese new year in China.
Many of the fact, hey, that's a shutdown and also the logistics the companies do not provide any of that.
I think he is during Chinese new year Theres also some control.
Some of the whole kind of a bunch of because of the COVID-19, Therefore, there's a small impact from the profit from.
From that part of that and we also want to keep the current they always have a attitude of about 75 the.
Overseas sales of one of them and then because we see the container of the challenge a lot of poker a China, so a shift to the overseas market.
And if we take out all of the impact.
The impact of you can surely looking for the older book receivable.
Gross profit he was one of the.
For the first of all of that.
So in summary, it's a mall because of seasonality tied.
Try to be prudent to the container into a.
Short term interest $1 19, or some changes.
In a shaky.
Okay.
That makes sense, thanks very much at the end.
A question.
On the I guess the prices for international a scooters I can appreciate at the gross margin in the quarter was a good.
There was the mix underlying net good cost control, but if the.
You just look at the price of the scooter that you're selling the international markets versus Q4 of the prices come down is there anything specific driving that.
I'm not reading some other maybe I can't share they because of the.
The two things I think one thing is the.
Because the old let's.
Keep in mind, everybody a study.
And the model of a modest so it really depend on how much.
The model in a different in Sacramento of what distributor order from us.
In Q4 last year, we have a of some of the older the full empty of it.
The slightly lower sales price comparison period, I mean that I think came to the the reason and secondly, some of the I'll share more franchise lending book.
The only one of the only part of the quarter instead of a all of the other.
They can test and Thats a separately into all of those for the spare parts et cetera, So that's where the battery and also lowered our S. P.
But today, it's a lot of it.
We'll put a press.
A kind of normal. So this is the first of all the secondary thing because of the depreciation of a.
The U S dollar of <unk>.
The team.
In the overseas market and we price our productive with all of that.
With the beginning of a startup in RMB, reducing some of the impact on the.
The average at the team that this is the two rigs in the fourth second loyalty for the international market.
Okay, Great. That's Super helpful. And then maybe the last question I had was on the supply chain Theres been obviously a lot of commentary around the semiconductor.
Packed on a various supply chains, but also in the electric passenger vehicle market theres been a lot of commentary regarding a bottleneck.
Bottlenecks in the battery supply chain, a potential delays production delays that are impacting people the ability to ramp production have you seen any of the supply chain impacts of either with regard to semiconductors or with regard to a battery.
I think that's a good question, we're actually in the last two weeks, we actually out there a little bit.
More sooner in the supply chain in terms of actions both deflation in some of its not in the chipset cause there's some shifts that we're using all of a simple controllers. So that has the impact of a absolutely and the Hudson.
T J a temporary shortage of batteries.
For us. It's a you know we have security of supply chain the thinking of the new.
A year, so that helps us to really to cope with the situation and the.
We basically will do a temporary blips of a one week or no longer than two weeks of Covid.
But that we were able to actually be able to handle the situation so far.
Okay, but you have a bigger thing.
Yes.
Okay I appreciate it good quarter guys.
Thank you. The next question comes from a gene Chang from the ICC. Please ask a question.
And that's why the Congress of thinking right.
I think guidance, what's called the results of a hike.
A quick question the first is a.
So can you give us a small color a U.
To be lumped in April.
As such.
A chance the twice a week and the how to distinguish a.
It doesn't the waste products here is a.
And the.
The second one day.
And so.
Oh luminaries true that we are producing all.
The parents, who could use you and a good deal flow. So how do we think about it.
Our excuse me of expansion so I can't go to the <unk>.
All other programs and also on my last question you referred to.
Hmm I'm talking about go by and a think twice a day.
Most of them.
So as we open more stores and maybe more exposure to a lower kind of C D and a more customers when we consider a.
Definitely the Cobra and the new grants a two.
To the different channels.
That's my three questions.
Okay.
Thanks for the question the drafting and then I'll have a harder to come from but the other.
First of all of the new product launch in April.
Well you know, we're very very happy to actually buy all of them.
So I kind of a lumpy, but we actually expected a part of it in.
The person that actually it's a.
You know a few the product actually experience the product flow. So we actually have a multiple products of that.
So a lot to be launching April covering actually multiple categories the pattern with the arc.
Oh, you mean, the high end electric bicycles tie in.
Also the let me call the MIT and the electric bicycle market in China.
The ball is a covering the electric motorcycles in China as well as some of the new categories like a power since the bicycles and <unk> in the.
All of a supermarket.
So it was actually a a wider range of products that we can the launching screen.
We call a global spring new pot of lunch.
He is going to happen.
The in Changzhou.
That's where actually by the time hours.
We have a phase two of the factories.
We have something that with our new factory last in the compute space one of the big 12 of the facts of will be almost ready.
The company revenue, but it seems just stop it and that helps to increase the use of production capacity as well. So the I think that was a.
One of the new car launch the April.
Most of the rumors on the on the on the on the on the cars that are giving you you were talking about recently there.
They were I think.
The their newest reported non used to print a mega from a social media is the only at the.
It's actually a wall of our new users actually I think he is the investments required and the pace did a concept of pizza hut.
A new insights into the electric car, what the electric car the smart electric car the look like for the.
Posted on his own a soc.
A couple of outstanding got picked up.
We actually we felt he was telling the story to be honest, our industrial our IGT I'm actually quite a rich other users.
Right.
No.
Try to see what are the part of it.
What are we a units out of them on the hour.
Two Wheeler device, we didn't really but you know you hit the blogging people use our logo. So there's a little bit would of course.
It was probably a ground of a patent infringement by the we thought we were a medical but we cleared of all of.
Our own.
<unk> will say hey, this is it's a bit.
It's a purity out of passion of a one of our users.
Now the last day on the Cola Cola series.
Oh I.
I think you know all of this note, even though I think we have multiple products and the undergo a series.
But having said that I think that the coolest you're still represent the each months he's done a industry.
The decline in from a part of quality.
The basic as you know.
Good.
The other serious of M series, and a new series so.
I think in the midterm, we still put it we'd still like to pass the Alcoa a serious under the new brand because I think a.
They actually represent what the new brands, representing which as you know technologies freedom.
I hope so.
So the well coming out of more products under the go with you reset the bar this year and a that will help us to actually bring a product to more of a wider range of all customer segments.
That's the answer is something that's on the new product launch.
The in terms of price range.
The last three of a handful of products.
And the similar questions like a cheap there.
All of them to launch a.
A premium products every day price similar to <unk> true.
It will have a quite a few offerings of our customers.
And also putting a proportionate also going to target a different customer segments. For example, wealth our production new production of more pockets of west female.
How about the further expand our customer base.
How about some quintile of the teams one of them in 2021. So that's the answer to your the tends to make a question.
Thank you.
Follow up question.
That's true.
I know that the Mr. You're not an hour.
Shareholder he hits the top one.
A one company to produce.
And it gives you a quick so is there any potential opportunity for us to a lot.
A potential cooperation between you and the.
Great.
Yeah, I think nothing I mean, well I think from a <unk>.
Most of you I think our mission was really from the other mobility of maybe price better so with purity focused on urban mobility I think of many of the tools, we have a proud of them.
No, it's not launched yet, but that's the tubular products the under the motorcycle market. I think this is one of we are good at it.
Some of it of the individuals in the diligence.
Okay. Thank you that's all my questions.
Yeah.
Thank you a next question comes from at least non from UBS. Please ask your question.
Oh, Hi, my name's from Tien Thanks for taking my questions I have three questions.
First one is that could you give us more in operation on a due to the new regulation in China, a how do we think the segmentation between the motorcycle and a E bike after the three years of transition period a few.
Jack You mentioned, a I think most of your incoming products in China are mainly in APAC a E bikes Edmond.
Can we understand that a in the future of after the transition period, focusing Chinese market will mostly be the E bike market a while.
In the overseas market will mainly be the a motorcycle.
Yeah.
Okay Yeah.
Thanks for the question. So I think first of all I think the from the new regulation, there's a clear separation.
On the if I predicted a motorcycle.
Cycle basically of the ebay plus the under the bank regulations with a free.
Kind of until the way I agree that that's a 55 kilos.
The the restriction of the size of the pipe as well of the speed I think according to some data basically last year roughly about what you know about 22 of 23 million units or E bike, whereas the rest of 10, plus then the units or what do you call. The E. R E motorcycles the life E Motors.
Cycles.
So.
I think that.
Yours, as we're seeing that whether that percentage will increase but it really.
Think of it really depends on the city by city regulations on motorcycles, because some places where a when.
When they actually put a restriction of motorcycles then you can see the percentage of would increase.
From our point of view from your point of view of where actually a proud of in both markets.
The bike market, we have our political crowd out from our end to end that you class a.
The one you asked and the arc, but golar G to a <unk> zero. So I think it was like eight a product lines. The tomorrow E bikes and cause the motorcycle like well we have a N. One M class G III and that will have a more product coming out for the motorcycle market. So.
I don't think we're it's not like a week and a focus on one of them versus the other I think for both market I think we have a.
One of the advantage in terms of design, we have a advantage from a technology.
That I think we actually able to gain market share in both markets.
The good thing on the trend of both market is the trend of from that asset to lithium ion batteries, you actually see that claims both on the E. Bike is the very obvious because for it for the impact will be less of a 55 kilos.
The most likely.
You would need to use the lithium ion.
The battery powered.
Cougars, so we'd see a lithium ion battery started because of the percentage of should come a penetration now for a model cycles. A traditionally it's most of the asset where the first one being the lithium ion batteries and the.
The people actually started enjoying the portable lithium ion batteries, because it's easier to charge.
I'll pick it up out of out the we're actually seeing a total of being a basically a increased itamar lithium iron battery penetration in the motorcycle market.
And the new.
<unk> been the the first smart electric lithium ion battery of scooters, both of them and you buy kind of motorcycles I think we have vintage in terms of capturing the market growth on the lithium iron based.
E bikes and a motorcycle market.
Okay. Thank you very clear my second question is about the a market segmentation a mommy a need for high end a school of terrorists.
A V S. A lower end market, what do you think kiss a the risk.
At the presentation market share.
I think it's difficult to talk about.
So sort of a percentage of I don't have the sort of the percentage.
Uh huh.
But no I can't give you a rough price range basically it means from a ratio of the price we're seeing.
We're not the cheapest ones can go as low as 500 RMB two of the.
Sales of one which we.
Most of the market share up from.
The $8 of R&D ish right. So I think that sort of the I'll give you a sense, but now you look at you know the the market average price I think hard of that maybe I think mark of average price probably a refill a 2500 per se.
The market average price of about 2500, RMB 2500 to a 26 on the RP issue lessons. We felt it was like 2025 to 27 on the R&D ish.
So I think that's sort of the market average price.
Now the interesting thing, especially of our UK all of a product offering.
The truth of somebody who actually had a 2000 and 222300 of RMB ish. So neither of the chip is my kids right below the market average, but most of a proud of offerings smoke.
So a lot in the MIT study at a meeting end of the market.
Where are the you know the traditional you know the other competitors the players they have a more cheaper product.
And the sort of supplement that even though there's no official data about a different a what's the monocytes and the.
From the second half of it.
The thing about it.
It does seem as one of the many tier one came to the cities the people in tier one tier two cities have highly for the income.
About the hybrid and he used to pay the tend to buy more and more premium product.
And the Q1 K twin cities. The it was one of them each year around $6 million from 7 million a constantly plenty of kind of 25 per cent of the total market. So thats kind of perhaps the best thing about all of US at the premium segment of it for the overall market.
Okay. Thanks, a lot and my last question is about Oh could even after a more like how you elaborated that day that you have gathered already from the ease of use car 20 like did you use that to support opening new stores or do you use that to more of like a.
The design of products are sort of well. Thank you. Thank you.
So we actually use data into is a free diminishes a well first of all of the data even though we collect the data, but all of the day those didn't use the anonymously in the sense that will use state of Advair.
As a collectively as a group.
We do observe the data to calculate you know to analyze user behavior that help us to why either design new products or provide a upgrade for the existing product most of our scooters actually support the or over the air upgrades of the O T. A.
Were you know basically every three months of six months, there's actually a new software can be actually some of the upgrade to your scooters such that actually will make you a driving experience a little bit better intermodal acceleration smoother or desktop. So a lot of those actually are being you know the operate of being dumped by observing the user behaviors.
You know, how we can actually fine tune the controller fine tune the software such that will improve the product experience. So that's on the existing products on the new product. Obviously, you know we look at.
For example of interest to me well, there that less and less than 30 per some of our users actually drive more than 20 months of 20 kilometer.
Here's a day, so that'll help us of understanding that the understood.
You know what the typical.
Battery.
The basic of battery capacity, we need to provide for our users such that on one hand, you know a can.
Provide the east of you know he of him he or she kind of drive three a three.
Three days of four days of adult English Hearts.
Hi.
On the order of a user with a huge battery you know a huge.
How does batteries, which will add up the cost net must meet the battery a happier.
So those are sort of the customer insight, which I used to for a product.
New product development of <unk>.
Second part of it is actually a what do we habits of the heat map because we have the you know we have a users a jewel.
The inflammation, so we know where the use of drive the scooters, whether you the parts of the scooters, who actually have a heat map of where C. D and that actually helped us to open to open two final store locations to open stores because most of our retail stores of not just from a retail there's all sorts of after sales services. So you can easily.
I think that you know.
There will be areas, where we all share their turns off of users, but the without a single store. So that means we need to open a couple of stores in those regions that will actually provide the adequate.
The customer service to their users.
So that we will do that as well.
Those are sort of the.
More and more of a interesting.
Things, we use the words with the data so I think the more interest in fact, it's actually ruled the day that the accumulated so far with about $7 8 billion kilometer of writing distance and the then.
On a daily basis Theres.
More and more of a malaise being accumulated in total data server segment.
Let me put this way.
And it basically you know the more you look at the more even more of a annualized than you.
Theres more interest you know facts of kind of find out.
From day to actually provide a better service just a better products from users.
Okay. Thank you.
Thank you. Our next question comes from it's a gene Lee from Citi. Please ask a question.
Good evening management Unfortunately from critics.
Congratulations.
Plus barrel a day.
And that's a good question.
The main innovation direction of all of a follow up the new offering.
Considering the comp.
Good day.
It becomes more and more especially in the high end market.
Uh huh.
The key the question so I didn't get I didn't catch what you were talking about our competitors.
The mix of a new product offerings.
Yeah.
I mean, what is the hour to the.
Most of the highlights of our a follow.
Total op offerings compounded to all the competitors.
I see.
Sure.
I guess, how do I described.
I think the attitude of a product to be honest.
It's a very very difficult to describe a.
You know what the loop highlights.
Every year, we do the new product launches, we keep a very secretive.
The when people actually of giving you sort of are there the ortho a ball factor. The thing about this is actually a really cool. So you actually have a suite of products, but none of it.
Give you sort of a very vague answer will be.
So we have multiple part of all coming out in April and the proud of.
To address a different customer segments, because I think more and more weighted in the industry, but I understood that you know a different customer a stick them in factories and a different consumers the different customer segments actually have a different.
The needs for this effort and the ability some of them actually a would require a longer driving distance and some of them a I'd say a what do you require a bigger space being from a you know, especially you do need to take their kids to.
Two schools.
And also a you know a male female may have a different view in terms of you know what.
What's being called a beautiful scooter.
I think.
In the past the when we start with no we start with everyone I'm one of them basically sort of a one form factor for the entire market, but we.
Our start to actually covering a wider range of consumer base.
We actually utilize the we need to design multiple products of different product to actually of a tune for the multiple customers segments.
Taste.
I think that's probably a sort of the main highlight besides the theres a new besides the.
The new what we call it smart functionality in the upgrade of scooters. There also a new powertrain technologies sooner scooters that such that.
We'll make the scooter drive factor.
A longer mileage based on the same battery.
No those are sort of of the technology operations, but you could take a while highlight you you're going to see a multiple device styles, a multiple form factors that actually a tune for a different customer needs.
I see very helpful. Thank you and my answer a question like that and how do the.
Even lives all of a tremendous use of data.
And then.
Maybe we have any way to.
Explore a new functions and features.
By using the IV offer.
The building.
So I think of as I mentioned earlier, so basically a currently we're using data and a three three weeks right, we're using data to a.
The annualized the customer behaviors to help us to define a better product like the new product.
That's the nature of new product design.
To better suit our customer needs at one secondly, we're actually using data to find from a software and software in our controllers, our ease of use such that for the existing customers without buying a new product.
Based on the upgrade software over the air the actually kind of experience.
They will have a upgrade of our U proof of driving experience.
Lastly.
All of those using data to inform of the retail expansions opened stores as well as sales in the after sales service stores in the locations, where you know what he called the white spot, where we have users, but we do have a thorough stations.
And the one more thing to add is actually the data will also use for a.
You know sometimes for a targeted targets of advertising because really analyzing what our users profile in the 19th.
One of our users behavior, we have a better understanding of our potential users and then that will help us to do a targeted advertising so.
Those are sort of the four of where we use the really describing our men's business now in terms of monetizing on the existing data we haven't done that I think the only part of the RFP is actually for the users to continue enjoying the what he called smart connectivity.
And you'll feel I think it was like 30 30 day of 50 to 50 of RMB annual fee.
We charge on the use of mailing to support on the sort of on the on the theory of connectivity.
Yeah, I think it sounds very cool Nathan. Thank you. Thank you.
Alright, Thank you see no more questions in the queue, Let me turn the call back to Mr. Li for closing remarks.
Alright, Thank you operator, and thank you all for participating in today's call of the player support. We appreciate your interest and look forward to reporting to you again next quarter on a progress. Thank you.
Thank you all again this concludes the call you may now disconnect.
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Yes.
Yes.