Q4 2023 Niu Technologies Earnings Call

[music].

Okay.

Unknown Executive: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Niu Technologies' fourth quarter 2023 earnings conference call. At this time, all participants are in listen-only mode.

Good day, ladies and gentlemen, thank you for standing by welcome two new technologies fourth quarter 2023 earnings Conference call.

At this time all participants are in listen only mode. Later, we'll conduct a question and answer session and instructions will follow at that time.

Unknown Executive: Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

As a reminder, we are recording today's call if.

If you have any objections you may disconnect at this time.

Yan Li: Now I'll turn the call over to Ms. Crystal Li, Investor Relations Manager of Niu Technologies. Ms. Li, please go ahead.

Now I'll turn the call over to MS Crystal Li Investor Relations manager of New technologies is Li. Please go ahead.

Yan Li: Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the fourth quarter of 2020. The earnings press release, corporate presentation, and financial spreadsheets have been posted on our investor relations website. This call is being webcast from our company's IR site as well, and the replays of the call will be available. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor Prohibitions of the U.S. Private Security Litigation Reform Act of 1995

Thank you.

Hello, everyone.

Conference call to discuss new technologies.

The fourth quarter of 23.

The earnings press release.

Corporate presentation and financial.

It has been.

Investor Relations website.

Call it.

Our company's IR.

And a replay of the call.

Sure.

Please note today's discussion will contain forward looking statements.

Have a privilege.

Private Securities Litigation Reform Act.

Yan Li: Forward-looking statements involve risks, uncertainties, assumptions, and other factors. The company's actual results may be materially different from those expressed today. Further information regarding the risk factors is included in the company's public filings with the Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required by law.

Forward looking statements.

Uncertainties assumptions and other factors.

Actual results may be materially different from those expressed today.

Further information regarding risk factors as included in the Companys public filings with Securities and Exchange Commission.

The company does not assume any obligation to update any forward looking statements.

As required by law.

Yan Li: Our earnest press release and this call included discussion of certain non-GAAP financial measures. The press release contained a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial measures. On the call with me today are our CEO, Dr. Yan Li, and CFO, Ms. Fiong Zhou. Now, let me turn the call over to CEO Yan. Thanks, Crystal, and hello everyone.

Our earnings press release, and this call include discussions of certain non-GAAP financial measures.

The press release.

I'm not sure of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

On the call with me today are our CEO.

Dr.

<unk> and CFO Phil.

Charles.

Now, let me turn the call over to CEO.

Yes.

Thanks, Crystal and Hello, everyone in the fourth quarter of 2023, our total scope.

Yan Li: In the fourth quarter of 2023, our total sales volume was 137,000 units, maintaining the same level one year ago with a slight year-over-year drop of 0.6%. Specifically, sales volume in the Chinese market dropped by 6.4% to $110,000. While sales in the overseas market had a significant increase of 33% to 27,000 USD, total revenue in Q4 was RMB478.7 billion, a decrease of 21, Those results wrapped up the financial year of 2023. In 2023, the total sales volume was 710,000 units, and total revenue for the entire year was RMB 2.4 billion.

37000 units.

Many of the same level, one year ago was flat year over year drop off <unk>, 6%.

Typically sales alone in the China market dropped by six 4% to 110000 units.

Sales in the overseas market had a significant increase up 33% to 27000 units.

Total revenue in Q4 was RMB $478 7 million a.

A decrease of 21%.

I'll wrap up the financial year of 2023 2023. The total sales volume was 710000 9000 units total revenue for the entire year was RMB two 7 billion.

Yan Li: Now the year of 2023 presented significant challenges for Niu's operation. The lingering effect of the lithium battery price hike in 2022 continued to impact our sales in the first half of. While the price of lithium batteries returned to the normal level in the second half of the year, our business faced additional setbacks due to consumption upgrades or downgrades in the top-tier cities in China. This trend, characterized by cautious spending behaviors among premium market customers, resulted in a slowdown in sales.

Now the year of 2023 presented significant challenges for news operation the lingering effect of lithium battery price Spike in 2020 to continue to impact our sales in the first half of 2023.

While the price of lithium battery returned to normal levels in the second half of.

Our business faces additional step backs to consumption upgrades or downgrades in the top tier cities in China. This trend characterized by caution spending behaviors among the Peruvian market customers resulted in a slowdown in sales.

Yan Li: Now, in the international electric two-wheeler market, we encounter challenges both externally and internally. The decline of the electric moped market in key European countries, such as Germany and the Netherlands, coupled with temporary operation disruptions due to issues faced by our distribution partners in Europe, further hindered our growth in 2020. Despite the high winds, 2023 presented itself as a year with opportunities to reflect and refocus our strategy.

Oh in the international electric to win the market, we conduct challenges both externally and internally.

While electric multi market in our key European countries, such as Germany, Nonetheless, coupled with temporary operational disruptions due to issues faced by our distribution partners Europe further hindered off gross in 2023.

Despite the headwinds our 2023 presented itself a year with opportunities to reflect that and I spoke with our strategy.

Yan Li: In the China market, our product strategy remains focused on the premium market segment, enhancing our product line by growing our classic series and also by successfully introducing a more sporty style Falcon 7. One notable product released in 2023 is the MQL, the legacy return product updates our iconic M series with significant design performance. In just seven months of launch, the MQL sales volume in 2023 represents 16% of China's total sales. The F Falcon series is also another popular series that we introduced in 2023 that quickly became a well-known style besides the classic Halo light series, with the recent launch of F400T, F200, and F100 products.

And the China market all product scratchy.

Focused on the premium market segment. He has been a product line by growing our classic series and also by successfully introduced and more sporty.

Phil Hawkins serious.

One notable product release in 2023 is the killer App.

C return product updates our iconic M series with significant performance improvements.

In just seven months after lunch I'm qol sales volume in 2023 represents 16 personnel China's total sales.

The Falcon series. There's also another popular soon is that we actually see 2023, how quickly become volatile besides the classics penalized series with a recent launch.

T F to wonder as minor products, the new F series together. It represents you already 35% of total China sales.

Yan Li: The new S series together represent nearly 35% of total China sales. So our dedication to craft a premium product is complemented by our unwavering commitment to build a premium brand. Throughout 2023, we will remain deeply engaged in branding and marketing activities, leveraging various user events and cross-brand collaboration to strengthen our presence in the Chinese market. We will actively participate in exhibitions and roadshows, collaborating with leading lifestyle brands such as The North Face Mountain Festival, SneakerCon, G-Fusion Gaming, Set, and the Designer Toy Expo.

Our dedication to cross our premium product is complemented by our unwavering commitment to go to premium prep throughout 2023, and we remain deeply engaging branding and marketing activities leveraging virus user events and cross brand collaboration to strengthen our presence in China market.

We actively participated in exhibitions and also collaborating with leading lifestyle brands that's right.

The North face, Montana Festival Sneaker contribution.

First on the designer toy Expo.

Events provided us always baffle alternatives to showcase our products and.

Brand preference Simon.

Tennis player we maintained a robust online presence through a strategic communication and marketing campaigns.

Yan Li: This event provided us with valuable opportunities to showcase our products and elevate our brand preference. Simultaneously, we maintain a robust online presence through strategic communication and a marketing campaign predominantly on short video platforms like Xiaohongshu and Douyin. Collaborating with over 600 KOLs and KOCs, our content generated over 250 million views, further solidifying our brand's digital footprint. Furthermore, 2023 saw us embark on impactful cross-brand collaborations, such as our partnership with globally recognized IP Kumamon, resulting in the launch of new cross-Kumamon G100 scooters. Additionally, in Q4 2023, we established a significant official partnership with JD Gaming, a leading eSports team in China and a finalist in the League of Legends World 2020. Moving forward, we'll continue to leverage our strategic collaboration and high-profile events to amplify our brand visibility and position in the market. Now I'll turn it into the overseas market. In 2023, we will encounter a mix of challenges and opportunities. Our electric two-wheeler sales experienced a significant decline of 70%, primarily due to the operation disruption faced by one of our key distributors.

Predominantly our short video platforms like shopping with one OEM.

Collaborating with over 600, kols until our content generated over 20 or 15 minute abuse further solidifying our friends digital footprint.

Okay.

The more 2023 philosophy block think impactful cross brand collaboration such as our partnership with globally recognized IP commitments, resulting in the launch of a new crop come on G want under schooners. Additionally, in Q4 2023, we established insignificant official partner.

Shane with J D gave me a leading esports team in China and a finalist in the league of legends water to 2023.

Moving forward, we will continue to leverage our strategic collaboration and high profile events to amplify our brand visibility.

In the reinforced.

Patients in the market.

Now I'll turn it into the overseas market.

Three we conquer the next cell challenges the opportunities.

Our electric two Wheeler sales experienced a significant decline of 70% primarily.

Attribute to the operation disruption faced by Walmart Tejas Peters.

However, our micro mobility stigma, sorry, modest increased up half a percent year on year.

Despite the decline in the electric two wheelers sector, we have initiated efforts to make operational adjustments to improve our performance since the second half of 2023.

We continue to introduce new products in 2020 through Eaton electric two Wheeler markets in the fourth quarter, we introduced the <unk> a high performance hybrid electric motorcycle until the European market.

Yan Li: However, our micro-mobility segment saw a modest increase of 0.5% year-on-year. Despite the decline in the electric two-wheeler sector, we have initiated efforts to make operational adjustments to improve our performance in the second half of 2020. We will continue to introduce new products in 2023 in the electric two-wheeler market. In the fourth quarter, we introduced the RQI, a high performance urban quad electric motorcycle to the European market. Cutting-edge design, swift acceleration, and integrated smart features such as keyless lock and unlock, GPS navigation, and OTA update have been met with enthusiasm from the market. Alongside the RQI, we launched the XQI Electric Dirt Bike, available in two variants, the XQI 3 Street for urban riders and the XQI 3 Wild for off-road adventurers.

Its cutting edge science with acceleration that you took were smart features such as the keyless locks unlock GPS navigation OTT update have been met with enthusiasm from the market.

Alongside that <unk> launched the X U I electric dirt bike available to barron's the extra light Sweet St. Paul Carbone writers and execute three wild for off Road Adventures.

Two I quickly garnered a claims when he was at 2023 cold Winter off of New York product Design Awards.

Furthermore, 2023 market all official launch of our new swap battery swapping solution is compatible with our newly introduced ethic Center E. More pets. This initiative imagine collaborating with partners across Southeast Asia, South America, and Europe revolutionized the way writers to engage with our product by offering quite efficient battery swap.

Thereby opening doors in the markets that would have previously yet to kind of penetrate.

Officially kick off solution in Q4, 2023, I expect perhaps battery swapping cabinets available by working closely with three to five operational partners by the end of 2024.

Yan Li: The FQI quickly garnered acclaim, winning the 2023 Gold Winner of the New York Product Design Award. Furthermore, 2023 marks the official launch of a new battery swapping solution compatible with our newly introduced F600 eMorpath. This initiative aims to collaborate with partners across Southeast Asia, South America, and Europe to revolutionize the way riders engage with our products by offering quick, efficient battery swaps,thereby opening doors in the markets that we have previously yet to penetrate. We officially kick off the solution in Q4 2023 and expect to have battery swapping cabinets available by working closely with three to five operational partners by the end of the year 2023. In the micromobility sector, we deliver sales volume slightly higher than the previous year with an increase of half percent.

And the micro mobility sector with deliberate this is more of a slightly higher than the previous year with the increase of half percent. However, the total activation number in 2023 quote by two X compared to 2022.

Product strategy, we're focused on running our.

Product portfolio to cater to a broad spectrum needs a long haul premium take you at air and the kick you out Air X model constructive predominantly from lightweight carbon fiber for incredible, Norway under tough Kino granted southern spicy orange in micro mobility categories.

Was it takes about air series, we now crossed the peak.

Comprehensive lineup that spans from higher innovative design scooters.

U S dollars thousand plus range to a high performance scooter in the 800 to $900 range to a festival.

Entry level options and that's we've had it for $400 bracket.

His diverse range lays a strong foundation for anticipated sales growth in 2024.

Yan Li: However, the total activation number in 2023 grew by 2x compared to 2020; product strategy focused on running our Product Portfolio to cater to a broader spectrum needs; the Lanchao Premium KQi Air and the KQi Air X models, constructed predominantly from lightweight carbon fiber for an incredible low weight of under 12 kilograms, solidifies our range in the micromobility category. With the Kings of Air series, we now have a comprehensive lineup that spans from high-end innovative design scooters in the U.S. dollar $1,000-plus range to high-performance scooters in the $800 to $900 range to accessible, entry-level options in the $300 to $400 bracket.

They expand the sales channel of our micro mobility product also play a bigger and our growth in 2023 were transitioning from focusing on online sales throughout Amazon Shopify to a combination of online and offline sales by working with our official retail partners like best buy media Mart Lounge anymore.

Through those retail partners, who are able to place our products in more than I thought.

Physical location in the United States and Europe.

Alright.

The patient global exports out of North Dakota, including the Am Expo in Las Vegas, If I believe I can I mean land on the electric Expo in various countries have significantly elevated news breast or is visibility.

Moreover, our in Cushing and popular media, especially at the appearance in the movie might administered to a television show sector band Marshall and the prices right has pleasantly surpassed our expectations further enhancing our brand presence on the global stage.

Yan Li: This diverse range lays a strong foundation for anticipated sales growth in 2024. The expanded sales channel of our micromobility product also plays a big role in the growth. In 2023, we will transition from focusing on online sales on Amazon and Shopify to a combination of online and offline sales by working with official retail partners like Best Buy, Media Mart, Blanget, and more. Through those retail partners, we were able to place our products in more than 1,000 physical locations in the United States and Europe. Our active participation in global expos and roadshows, including the AIM Expo in Las Vegas, IFA in Berlin, ECMA in Milan, and the Electric Expo in various countries, has significantly elevated news breadth visibility. Moreover, our inclusion in popular media, such as the appearance in the movie Murder Mystery 2 and TV shows like Drew Barrymore's show and The Price is Right, has pleasantly surpassed our expectations, further enhancing our brand's presence on the global stage.

Now as we move into 2020 for all offices optimism for growth. It's brought bites strategy adjustments laid out in 2023 across our operations.

In China, our commitment remains strong towards the premium market segment, focusing on premium product. The Watson targeting very specific customer segments channel expansion into tier two tier three cities as same store sales growth to be online offline traffic optimization.

Yeah.

And terminal products back in 2022 weeks, our new classic of UK life, plus model awkward U series to be training pud likely find smart controls and enhanced economics.

This model quickly captured market attention and contribute to near 14% of total sales declined 22.

Similarly, the I'm sure all introduced in Q2 2023, I think he has been at all time partner F series presented itself as a classy return with the performance improvement.

So al cockpit to 16% of our total 2023, China sales.

Both models are a clearer testimonial to the consumers preference for our classic design comeback combined with Aqua technology, posting powertrain smart functionalities.

Yan Li: Now as we move into 2024, our optimism for growth is brought by the strategy adjustment laid out in 2023 across our operation. In China, our commitment remains strong towards the premium market segment, focusing on premium product development, targeting very specific consumer segments, channeling expansion into Tier 2 and Tier 3 cities, and same-store sales growth via online and offline traffic optimization. In terms of products, back in 2022, we introduced our new classic UQI Plus model, an upgraded U-series, featuring improved light design, smart control, and enhanced rider ergonomics. This model quickly captures market attention and contributes to near 14% of total sales in 2020. Similarly, the MQL introduced in Q2 2023 as the enhancement of the old-time popular M-series presented itself as a classic return with performance improvement. The MQL contributed to 16% of total 2023 China sales. Both models serve a clear testimonial to the consumer's preference for a classic design combined with upgraded technology, both in powertrain and smart functionality. Those design styles are deeply ingrained in the minds of Chinese consumers as premium, high quality.

Those design styles are deeply ingrained in the minds of Chinese consumers as premium the high quality.

The successful launch of the <unk> class in the U series and M to M series set a foundation for our new product.

Now on February 29.

2024, with a few of our newly designed and X series.

The design style of our first lesson or product a month, which laid the foundation for our company back in 2015, the unwound with our first electric multi in China and has sold over half a million units since its launch.

It has not only become the lesson or decide upon you, but also a classic example of premium high quality Smart electric scooter in China.

However, since 2019 was the newly tricky with the introduction of a new regulations on China electric bicycles to Oman, no longer met the optics standard.

And it has to be stored at the motorcycle leading to a decline sales. Nonetheless consumer has lumpy requesting an upgraded online that comport complies with both the regulations for electric bicycles that multiple cycles.

Now in 2024 was finally W and X series with Macs, representing an electric motorcycles and next tea at the electric bicycle.

Both models the inherited these lifestyle offer orange won but refine upwards modern look.

The design stands out with a futuristic style incorporating mathematics transparent panels to showcase its fast circuitry the body shop, yet smooth aerodynamic lines. Additionally, we have upwards of Halo light a signature elements are shared across our most well known scooters and unmatched serious the halo likes the embedded in the spot.

Yan Li: The successful launch of the UQI class in the U-series and MQIL in the M-series set a foundation for our new product. Now, on February 29, 2024, we debut our newly designed NX series. It continues the design style of our first legendary product, the N1, which laid the foundation for our company back in 2016. The N1 was our first electric moped in China and has sold over half a million units since its launch. It has not only become a legendary design for Niu but also a classic example of a premium, high-quality smart electric scooter in China. However, since 2019, with the introduction of new regulations on Chinese electric bicycles, the N1 no longer meets the updated standards and has to be sold as a motorcycle, leading to a decline in sales.

Adding another futuristic custom design.

Okay.

T I quickly with our most cutting edge technology functions to date, making them the smartest electric scooters on the market for driver safety. They are equipped with the full function Aps at Tcs.

<unk> features the PSC the blind spot detection and are stopped loader rear cross traffic warning along with Dawson automobile great Dash Cam in the front and the millimeter wave radar in the back.

To further enhance the riding experience there.

After that with the interactive P F T displaced everything out smart cockpit.

This incorporate writing its features such as TV start navigation minimal access as well as the interactive features including lab timing writing routes locks.

Payment system.

Yan Li: Nonetheless, consumers have long been requesting an upgraded M1 that complies with both the regulations for electric bicycles and motorcycles. Now, in 2024, we finally debut the NX series, with the NX representing the electric motorcycles and the NXT as the electric bicycles. Both models inherit the design style of the original N1, but are refined upgrades to the modern, The design stands out with a futuristic style, incorporating magnetic transparent panels to showcase its front circuitry. The body is designed with sharp, yet smooth aerodynamic lines.

Also to seamless integrated with use their smart device ecosystem. The update also incorporate new smart features like masco navigation compatible with Apple and Huawei Hanmi system. The integration notable features such as voice control shortcut on display at the bites management, including Apple spent my feet.

Yours.

No as long as the highest performance electric motorcycle with every release doesn't ask boosted maximum power 20000 lots with top speed of 135 kilometer power and accelerates from zero to 50 kilometer problem right and just to point 45 seconds.

The black tea is available immediately since its launch with pricing from RMB 6000 to 12500.

Yan Li: Additionally, we have upgraded the halo light, a signature element shared across our most well-known scooters. On the NF series, the halo light is embedded in the front panel, adding another futuristic touch to the design. The NX and NXT are equipped with our most cutting-edge technology functions to date, making them the smartest electric scooters on the market. For driving safety, they are equipped with full-function ABS and TCS. Additionally, they feature DSC, blind spot detection, and RCW, rear cross-traffic warning, along with the automobile-grade dash cam in the front and the millimeter wave radar in the back to further enhance the writing experience there.

Next is available you made the on X T were well received as evidenced by online preorder stuff. The next to initially through live streaming of major platforms.

With the initial two weeks of launch with C Corps are more than 10000 units in preorders generating sales revenue exceeding 100 million RMB. This amount is 40% more than compared to our initial crowd funding kind of painful released I'll firstly a month.

Those preorder results position us a top seller across all major ecommerce platform during the period.

With the successful launch of the Max next T series targeting the premium motorcycle consumer segments in performance driven electric bicycle segments. We'll also plan to introduce several product to target diversify user group for example, our recently upgraded you one product launch just a few days.

Yan Li: Outfitted with the interactive PFT display serving as a smart cockpit, This incorporates its features such as keyless start, navigation, remote access, as well as interactive features including lap timing, writing routes, locks, and entertainment. Also, to seamlessly integrate with the user's smart device ecosystem, the update also incorporates new smart features such as integration on all features such as voice control, shortcut phone display, and device management, including Apple's Frontline feature. Now, as one of the highest performance electric motorcycles we have ever released, the NX boosts its maximum power 20,000 watts with top speed 135 km per hour and accelerates from 0 to 50 km per hour in just 2.45 seconds.

So targeting female users with this new color scheme economic improvement you handle that position is that we use smart functionality to the options to equal baby seat and accessories.

The key to our product strategy in 2024 is to build our product portfolio targeting the premium consumer segment was that first if I E.

Okay.

All supported with those new products. We also plan to restart kind of expansion in Q2 2020 for building up the channel coverage across tier one to tier four cities will initially focus on the top 45 feet, which represent 80% of ourselves with plans to build sales probably in the lower tier cities as well.

Yes.

Now with the additional store count with the key focus for 2024 remains to improve our same store sales leveraging the combination of online and offline traffic.

Initially the effort in the second half 2023 conducting over 15000 livestream sessions Antonia on the Shelton who have recorded.

Some successful queso excuse me Archie M. B of over 100000, RMB, just one license obsession, indicating a successful online to offline conversion model, we plan to further scale up.

Yan Li: The NXT is available immediately since its launch with pricing from RMB6,000 to RMB12,500, while the NXT Pro is available in May. The NXT was well-received as evidenced by online pre-orders of the NXT Pro initially through live streaming of major platforms. With the initial two weeks' launch, we secured more than 10,000 units in pre-orders, generating sales revenue exceeding 100 million RMB. This amount is 40% more than compared to our initial crowdfunding campaign for the release of the first one. Those pre-ordered results placed it as a top seller across all major e-commerce platforms during the period. Now, with the successful launch of the NX-NXT series targeting the premium motorcycle consumer segments and performance-driven electric bicycle segments, we also plan to introduce several products to target diversified users. For example, our recently upgraded U1 product launched just a few days ago, targeting female users with this new color scheme, ergonomic improvement in the handle and seat position, easy to use smart functionality, and options to include a baby seat, etc.

Starting Q1 2024, we have continued lightroom initiatives 30 key CD market I believe those store to start directly through online live streaming on a daily basis.

Additionally, we have plans to launch online sales campaigns and co create over 10000 widespread and social media content with those strategies in place with anticipated same store sales by 10% to 20% in 2020 for driving significant volume growth for the company and he has store profitability.

Now with our product strategy and retail China expansion focus we aim to further strengthen our brand through marketing and branding campaigns are recent highlight with our collaboration with JD gaming team expanding our partnership formed last year with join forces with J D gaming team out there all facial electric scooter.

This collaboration extended from social media engagement product lunches and seek to make a significant impact within the generation Z demographics.

The collaboration with JD gaming market.

Beginning a serious partnership plan for 2024, where you tend to continue our co branding effort with several strong IP is targeting specific user groups and leveraging social media platforms.

Yan Li: The key to our product strategy in 2024 is to build our product portfolio targeting the premium consumer segment with diversified, Supported with those new products, we also plan to restart channel expansion in Q2 2024, building up the channel coverage across Tier 1 to Tier 4 cities. We initially focused on the top 45 cities, which represent 80% of our sales, with plans to build sales fronts in the lower tier cities as well. Now with additional store counts, the key focus for 2024 remains the improvement of same-store sales, leveraging the combination of online to offline and offline traffic. We initiated those efforts in the second half of 2023, conducting over 15,000 live stream sessions on Douyin and Xiaomengshu. We have recorded some successful cases of achieving a GMB of over 100,000 RMB in just one live stream session, indicating a successful online to offline conversion model we plan to further scale up. Starting Q1 2024, we have continued live stream initiatives in 30 key city markets, enabling those stores to sell directly through online live streaming on a daily basis.

Now in the overseas market.

Our comprehensive product portfolio, which includes the introduction of IMTT 100, or two on X to a model in the fourth quarter of 2023 strategically bridged the gap between our product offerings of high performance electric motorcycle market demand some.

J D 100 price then and in.

Europe, not 5000 together with NTT provides a comprehensive coverage from 50 to 125 city electric more pets that are too I had targeted electric motorcycle category offering a high performance quite motorcycle option with price starting on it. He tells me euros. Additionally, the new turbine execute mark start with that view.

Product and offer a motorcycle sector priced that takes all the euros back to my model has garnered significant attention.

Our active engaged mi industry event, that's right and Expo in Las Vegas for the reader in Germany.

Has further amplify our brand visibility at those exports with brought our latest spikes providing attendees equally.

Influential killed piece with the opportunity to test drive it grew out products the positive feedback that the heightened interest from the diverse user groups receive that they'll keep that it has to be instrumental in solidifying our presence in the market.

Most importantly, since the later half of 2023, we have undertaken substantial adjustment to our business operations. He oversees electric two wheelers sector.

And some of our key markets in addition to the existing distributors.

Yan Li: Additionally, we have planned to launch an online sales campaign and co-create over 10,000 pieces of wide-spreading social media content. With those strategies in place, we anticipate improving our same-store sales by 10-20% in 2024, driving significant volume growth for the company and enhanced store profitability. Now with our product strategy and retail China expansion in focus, we aim to further strengthen our brand through marketing and branding campaigns. A recent highlight was our collaborations with the JD Gaming team. Expanding our partnership from last year, we joined forces with JD Gaming as their official electric scooter partner.

We already established entities in the operation team put directly distribute shop, some of our product to retailers.

I believe the direct distribution model will enable us to invest more in local pricing and marketing established strong ties with customers and make us more adaptable to local market changes.

Those operational adjustments may initially delay the revenue recognition on two product actually reach to individual retailer dealers. They will help us to create a strong foundation in each local market in the long run.

With a comprehensive product portfolio and operational adjustment complete in Q1 2024, we are confident in kick starting the growth beginning in the second quarter of this year.

Now in the overseas micro mobility sector will have established a solid foundation for growth in 2024 over the past two years, although the books fill through volume has remained relatively flat compared to 2023 to 2022, the actual sell volume to customers has doubled as suggested by the ACA.

Yan Li: This collaboration extends from social media engagement to product launches and seeks to make a significant impact within the Generation Z demographic. Collaboration with JD Gaming, Marks & Beginning of a Serious Partnership Planned for 2024 We intend to continue our co-branding effort with several strong IPs targeting specific user groups and leveraging social media platforms. In the overseas market, Our comprehensive product portfolio, which includes the introduction of MGT-100, RQi, and XQi models in the fourth quarter of 2023, strategically bridges the gap between our product offerings and high- The MGT-100, priced at €5,000, together with MGT, provides comprehensive coverage from 50cc to 125cc electric mopeds.

<unk> number increase and.

The trend to continue I don't who X rate, we believe that our product portfolio ability and there's still channel establishing that has.

Position us well for further growth this year.

On the product portfolio front with the introduction of a particular area of full copper fiber lightweight high performance Geek Scooter is September 2023, we're now post the comprehensive product lineup. Additionally January 'twenty 'twenty four and marks the launch of <unk> 300 series.

Smell popular to fly three series designed for Altera use. This take you like 300 series featuring due to hydraulic suspension for better handily, even surface promising up to a 60 kilometer range per charge.

<unk> added $700.

We have several other product upgrade plan throughout the year of 2024.

Yan Li: The RQI targets the electric motorcycle category, offering a high-performance quad motorcycle option with a price starting at 8,000 euros. Additionally, the new dirt bike XQi marks our debut product in the off-road motorcycle sector. Priced at 6,000 euros, the XQi model has garnered significant attention. Our active engagement in industry events, such as an expo in Las Vegas, and as a moderator in Dortmund, Germany, has further amplified our brand visibility. At those expos, we brought our latest bikes, providing attendees, including influential KOCs, with the opportunity to test drive and review our product. The positive feedback and heightened interest from the diverse user group received at those events has been instrumental in solidifying our presence in the market. Most importantly, since the latter half of 2023, we have undertaken substantial adjustments in our business operations in the overseas electric two-way sector. In some of our key markets, in addition to the existing distributors, we have, and are establishing entities and the operation team for direct distribution of some of our products to retailers. We believe this direct distribution model will enable us to invest more in local branding and marketing, establish strong ties with customers, and make us more adaptable to local With those operational adjustments, revenue recognition may initially delay until products actually reach individual regular dealers.

Now with the product lineup, we made significant progress in turn retail channel in the second half of 2023 lays a solid foundation for growth in 2024.

In the U S market, well well position that you all were 800 best buy stores.

In our effort in turn retailers, such as Walmart target Costco in Europe, our product our display in over 400 medium our stores in Germany.

Over 200, plus branches towards the friends and the we're making progress in placing them nearly 100.

English stores these space.

Additionally, we're moving forward with new retail partnership with media or Italy, and the retailers to Australia and others.

By the end of 'twenty 'twenty four with plan to double the number of point of sale itself, but micro mobility products by expanding the retail sales network.

So heading into 'twenty 'twenty four we're optimistic about really any growth in the China market. The excitement surrounding our latest product release has been powerful leveraging the momentum gained from the newly released product.

Also there's a lot of scheduled prepare for all the other products throughout the year as well as the channel expansions.

In the overseas motorcycle market, but they are ready to ship the product and the operational adjustments already placed in Q1, we're confident in the growth of 'twenty 'twenty. Four however, those operational adjustments made temporary result, TNT clients still in Q1 as the sales are actually booked differently do to the model.

Sure.

For the micro mobility Sentimentally anticipated fast growth in Q1 as well as throughout the entire year given that would happen there our product portfolio and establish both online and offline channels at a big enough this year.

Now when those factors considered anticipated sales volume in 2020 import reaching one to $1 2 million units.

Yan Li: They will help us create a strong foundation in each local market in the long run. With the comprehensive product portfolio and operational adjustment completed in Q1 2024, we are confident in kickstarting growth beginning in the second quarter of this year. Now, in the overseas micro mobility sector, we have established a solid foundation for growth in 2024 over the past two years. Although the book sales volume has remained relatively flat compared 2023 to 2022, the actual sell volume to customers has doubled as suggested by the activation number increase, and the trend continues at 2x rate. We believe that our effort in product portfolio building and the sales channel establishment has... position as well for the father growth. On the product portfolio front, with the introduction of the KQi Air, a full carbon fiber, lightweight, high-performance kick scooter in September 2023, we now boost the comprehensive product lineup. Additionally, January 2024 marks the launch of the KQi 300 series, an enhancement of the popular KQi 3 series designed for all-terrain use. This KQi 300 series features a dual-tube hydraulic suspension for better handling on an even surface. We have several other product upgrade plans throughout the year of 2020.

Now I'll turn to <unk> to discuss thank you Yan and Hello, everyone. Please note that our practice contains all the figures and comparisons you need and we have also uploaded a cellphone that feeders to our IR website, where you can see reference as I review, our financial results I'm, referring to the fourth quarter.

First unless I say, otherwise and all monetary figures are in RMB is not specified.

Jim mentioned, our total sales volume for the fourth quarter was 137 salary unit a decrease of 6% compared to the same period of last year.

And specifically speaking the China marketing sales volume with 100 and salaries.

Overseas market with 27000 units.

And for the full year 2023.

The total sales volume of about 700 in Canada.

710000 units, including 601000 units in China.

$9.

And the total revenue in the fourth quarter was RMB 479 million down 22% compared to the same period of last year to break down the scooter revenues by making whatever revenue in China, the RMB 365 million down 21%.

This decline was primarily country due to a shift in product mix.

As the Chinese economy.

Our premium tier and showed a slower recovery in rate and compare it to the mass premium theory.

As a result, the XP reached to RMB 32 16.

15% lower on a year over year basis.

However, the SP each category has increased.

Premium E. S. P remain nearly five almost 5000 and the mass premium the ASP increase to nearly 3000.

Yan Li: Now with those products lined up, we made significant progress in entering retail channels in the second half of 2023, laying a solid foundation for growth in 2024, in the US market while well positioned in over 800 Best Buy stores and events, in our effort to enter retailers such as Walmart, Target, and Costco. In Europe, our products are displayed in over 400 million-mark stores in Germany. Over 200 Blanchet stores in France, and we are making progress in placing them in nearly 100 English stores in Spain.

The overseas Scooter revenue.

E Scooter Nemo pad and motorcycles.

Nearly 16 Korean blandly Scooter S P decreased to 2200.

49% year over year, despite the higher.

Sales volume contribution I'll kick scooter with the lower U S. P. The new launch to keep them on K U S contributing to a 22% of the sales volume which targeted toward the healy.

And the entry level market and has a lower retail prices.

Accessories spare parts and services revenue were RMB $65 million.

Yan Li: Additionally, we're moving forward with new retail partnerships with MediaWare in Italy and retailers in Australia and others. By the end of 2024, we plan to double the number of points of sale of micromobility products by expanding the retail sales network. So heading into 2024, we're optimistic about regaining growth. In the Chinese market, the excitement surrounding our latest product release has been powerful. Leveraging the momentum gained from the newly released product, we have a royal schedule prepared for all the other products throughout the year, as well as channel expansion. In the overseas motorcycle market, with the ready-to-ship product and the operational adjustment already in place in Q1, we're confident in the growth of 2024. However, those operational adjustments may temporarily result in a decline in sales in Q1, as the sales are actually booked differently due to the model change.

Due to the decreasing the overseas spare parts and services as we mentioned in the previous quarters.

For the full year 2023, our total revenue decreased by 16% to RMB, two 7 billion and China Scooter revenue as a whole we saw a 15% year over year decline to RMB 2 billion and it was especially scooter revenue decreased by 29% to RMB.

$349 million.

Total overseas revenue, including scooters and Knox contributed 15% of total.

Total revenue.

And now when I look at the E. S. P 20 planes green Yeah. Overall scuderi S. P was slightly decreased to 33 23, 3% down year over year.

While the domestic scooter S. P was $33 44 up 1% and this is <unk>.

Growth was driven by a higher ASP.

<unk> premium mass premium periods, despite a shift in the mass premiums overall productivity.

And over this.

Lastly, scooter ASP 3200.

21%.

The propulsion of peak school, there's increased and also combined with the decrease in the newly launched a lower ESP keep scooters in Q4.

Yan Li: For the micro-mobility segment, we anticipate fast growth in Q1 as well as throughout the entire year, given that we have layered our product portfolio and established both online and offline channels at the beginning of this year. Now, with those factors considered, we anticipate the sales volume in 2024 reaching 1 to 1.2 million units. Now I'll turn to Ziyang to discuss. Hello again, and hello everyone.

Gross margin for the fourth quarter was 19% 3.4 ppt lower than the same cure it out last year and mainly due to the product mix change in the domestic market.

For the year in 'twenty three the gross margin was 21, 5% up from 21 one.

Great.

And representing a four ppt increase on an annual basis and mainly due to a reduction in raw material costs, especially in domestic new product line.

And talking about operating expenses, the fourth quarter Opex was 246 million 50 million higher than the same period of last year and mainly due to a lower revenue base.

Wenjuan Zhou: Please note that our press release contains all the figures and comparisons you need. We have also uploaded Excel format figures to our IR website for your easy reference. As I review our financial results, I'm referring to the first quarter figures unless I say otherwise. And all monetary figures are in RMB unless otherwise specified. As Yan mentioned, our total sales volume for the fourth quarter was $137,000, a decrease of 0.6% compared to the same period last year. Specifically speaking, the China market sales volume was a hundred and ten thousand, the Overseas market was $27,000, and for the full year 2020. The total sales volume was $700,000, of which $710,000 was.

And marketing expenses.

984 million higher than a year and primary resulting from our expansion into the overseas markets.

Out of which 43 million arthropathy overseas Microrna, but if you're a holiday promotion and the out of hospital from the rental expenses largely driven by the inventory build up resulting from geopolitical conflicts and artist stopped taking four they expecting peak season in 'twenty two.

94 <unk>.

Finally, the current warehouses are incurring higher units per area called.

Since the micro mobility sector is still in the early operating stage.

Expenses are expected to decrease in the subsequent quarters.

R&D expenses were 36 million 5 million lower than the fourth quarter of 'twenty, two and mainly due to the decrease in staff costs.

Wenjuan Zhou: Yating Chen, Jing Chang, Niu Technologies Sponsored ADR Class A, And the total revenue in the fourth quarter was RMB 479 million, down 22% compared to the same period of last year. To break down the scooter revenues by, the total revenue in China will be $355 million, down $21 million. This decline primarily contributed to a shift in product. As the Chinese economy was still in recovery, our premium series showed a slower recovery rate compared to the. As a result, the ASP reached reached our B32. 15% lower on year-over-year. However, the SP in each category has... The premium ASP remained almost 5,000, and the mass premium ASP increased to nearly 3,000.

Share based compensation of RMB 8 million and partially offset by the increase in designing and testing expenses.

New models, which have been and will be launched in 2024 of RMB 3 million GM.

G&A expenses wildly 19 million 20 million lower on an annual basis, mainly caused by the decrease in provision for credit officers of RMB $22 million and a decrease in staff related costs of <unk> 5 million.

For the full year 2023, the old taxes was RMB 891 million, 15% higher than in 2022, and the increase was mainly due to the provision for credit losses of RMB 114 million and the increased promotional activities in rental expenses being overseas.

<unk> of RMB or Hunter had wandered Albion, partially offset by 45 million decrease in G&A, and also 40 million decreasing domestic marketing and promotion.

Wenjuan Zhou: Overseas Crude Oil Revenue was nearly $60 million. The blended scooter ESP decreased to $20, 100% down, and 49% yield. Volume Volume Contribution of Keek Scooter with the Lower AF, The new launch of K1 and KU is contributing to 22% of the sales, which targets the youth and the entry-level market, and has a lower ratio price. Accessories, Spare Parts, and Services Revenue Award, Due to the decrease in the overseas spare parts and services as we mentioned in the previous quarter. For the full year 2023, our total revenue decreased by 16% to RMB 2.7 billion. China's scooter revenue as a whole saw a 15% year-over-year decline to RMB 2 billion, and the overseas scooter revenue decreased by 29% to RMB 349 million. And now let's look at the ASP 2021. The overall scooter ESP was slightly decreased to 33.5, while the domestic scooter ESP was 3344.

Despite prudently Racine provision for credit losses on our June payment, we retain our part to keep our future receivables collection, even though our current partner in this robust financial sandy and their uncle repayments continuously.

Excluding the noncash expenses, such as the provisions for credit losses, depreciation amortization and share based compensation the old tax increased 2% year over year.

The non-GAAP tax was RMB 800.

45 million.

In the fourth quarter, we had a net loss of RMB 130 million and a non-GAAP net loss of RMB, Oaxaca and $22 million.

A full year basis due to the factors, including the lower than expected domestic sales.

The increase in overseas business expansion as mentioned above.

We had a net loss of 272 million and non-GAAP net loss of 220 of $24 million.

Turning to our balance sheet and cash flow. We ended the year with the RMB 1070, 8 million in cash restricted cash and term deposit and short term investments.

On annual basis, the operating cash flow with interval 96 million primary because when they get in net income after adjusting for noncash items.

And our Q4 Capex was 22 million for the full year. The Capex was 17 9 million 56 million lower than last year as we cautiously opened up stores in the Atlantic market.

Wenjuan Zhou: Yating Chen, Jing Chang, Niu Technologies Sponsored ADR Class A, And overseas, Blackbeard's total EMP was 3,200. 21% down on the proportion of kick scooters, and also combined with the decrease in the newly launched and lower AF. The gross margin for the fourth quarter was 19%.

Now, let's turn to guidance, we expect the first quarter revenue to be in the range of RMB 438 million to $480 million.

The increase of 5% to 15% year over year.

Please be aware that this outlook is based on information available as of the date and reflect the company's current and preliminary expectation, which is subject to change due to uncertainties related to our various factors and with that let's now open the call for any questions that you may have.

Wenjuan Zhou: 3.4 PPT lower than the 10 period of last year and mainly due to the product mix change in the domestic market. Well, for the year-end 2023, the world's margin was 21.5%, and representing a point for, mainly due to a reduction in raw material cost, especially in domestic new products. Talking about Operating Expenses, the fourth quarter OPEX was $246 million, $50 million higher than the same period of last year, mainly due to lower revenue. Selling and marketing expenses were $191 million, $84 million higher than the same period of last year, and primarily resulting from our expansion into the overseas market. Out of which 43 million were from the overseas micro-mobility holiday

Yes.

Please go ahead.

We will now begin the question and answer session to ask a question on the phone. Please press star one one and wait for it to Pan out.

Okay.

One moment for the first question.

Okay.

Our first question comes from the liable to Attunity from Citi. Please ask your question.

Good evening and I'm I'm.

Jean Marie France.

Thank you for your time and and I like the more interested and follow your questions.

That you are more about us and unlocks the true I'm more about our industry and.

Wenjuan Zhou: And the other half stems from the rental expenses largely driven by the inventory buildup resulting from geopolitical conflicts and early stock taking for the expansion. Additionally, the current warehouses are incurring higher units per area cost. The micro-mobility sector is still in early operations, and those expenses are, in fact, Subsequent quarter. R&D expenses were $36 million, $5 million lower than the first quarter of 2020, and mainly due to the decrease in staff costs and share base compensation of RMB 8 million and partially offset by the increase in design and testing expenses, a new model which has been and will be launched in 2024 of Armviz. GNA Expenses for R&D were 19, 28 million lower on an annual basis, and a decrease in staff-related costs of R&B 5.

The first one is this year's store expansion plan and the strategy it means.

Would we like to restore the already know channel or more to supplement and the new thinking channel and.

The second question is about how to evaluate our nine volt.

Our graphics sales target this year in Nevada.

Squeeze on the same topic.

Bob two things about.

And I wonder if you'd like to sockets too and then I'm going to cause the sector.

So I'll talk about first on the store openings I think actually a mixed up.

Basically I think we're still going to be focused on the top 45 cities.

Wenjuan Zhou: For the full year 2023, the OPEX was RMB 891,015% higher than 2020. And the increase was mainly due to the provision for credit office of R&B 114, and increased promotional activities and rental expenses in overseas markets of RMB101 million, partially offset by $45 million. GMA, and also $40 million decrease in domestic marketing and, Despite prudently raising provisions for private offices on overdue payments, We retain a positive outlook on future receivables collection. Given the all current, popular, robust financial identity and their ongoing, Exclude the non-cash expenses such as the provisions for credit office, depreciation and amortization and share rate compensation, the OPEC Non-gas OPEX was R&D 845, In the fourth quarter, we had a net loss of RMB131, non-gap involved of R&D 122 million on a full year basis due to the factors including the lower than expected domestic Sponsored ADR Class A, expansion, as mentioned above.

First, yes, and with the option to expand into other cities as well.

So normally in the past if you look at it.

Last couple of years.

Because the lithium price hike.

We have lost roughly about 500 stores.

I think the expansion for including actually including the store would have lost on the rig.

Claiming back as law is.

Opening new areas.

So I think.

They'll start basically I think we have a clear roadmap actually.

Location map on where to open stores and based on our pizza.

With our new product portfolios.

No I think with the what was the second question about competitors I think Oro, if we look at R. R.

Purple product offerings.

So.

Our current product offering is basically the price range.

Anywhere between.

Basically $3500 specified under RMB above to up to 12000 RMB. So.

Current market.

The Bloom about 35 under RMB that volume.

Basically somewhere around 14 to 16 million units.

Wenjuan Zhou: We had a net loss of 272 million and a non-gap net loss of 224. Turning to our balance sheet and cash flow, we ended the year with RMB1,078 million in cash, restricted cash, term deposits, and short-term investments. On an annual basis, the operating cash flow was in full 96 million, primarily because we made a net income after adjusting for non-cash IT. And our Q4 pack was 22. For the full year, our capex was $79,000.

So within that let's call that our addressable market of 14 to 16 million units and was that number last year with illnesses.

600000, so even with this year's forecast.

Thank you know the markets to the addressable market is still very significant large down our oil target.

In the sense that I think.

We're less worried about the competitors.

I think we're more focused internally.

Cost of getting the best product out there and how to expand the channels expand our stores. So the consumers are.

Wenjuan Zhou: 56 million lower than the last, that will cautiously open up doors in the domestic market. Now, let's turn to guidance. We expect the first quarter revenue to be in the range of our $438 million to $480 million, an increase of 5%. Please be aware that this audio is based on the information available as of the date and reflects the company's current, which is subjected to change due to uncertainty, will be our heads up. And with that, let's now open the call for any questions that you may have for us. Operator, please go ahead.

The interest of customers to actually have a location to acquire the product.

I think that that sort of hopefully that addressed your second question.

Got it quite clear and am I right.

I really hope they stick.

Yeah could be.

We could see a robust change in Alberta.

In all other markets.

Uh huh.

Next two questions about the sector.

First of all one is the less the net lending playa.

It has attracted.

Attention Oscar Society.

Unknown Executive: Thank you. We will now begin the question and answer session. To ask a question on the phone, please press star 11 and wait for your name to be announced.

Sure.

But back to the back of truth.

The Bachelor it's all true.

To be honest.

Unknown Executive: One moment for the first question. Our first question comes from the line-up to Jun Li from Citix. Please ask your question. Good evening, and I'm Jing Li from CITIC.

There's also a view.

Should that sector.

And the second is.

Our users are more concentrated.

Hi, TSA days.

Yating Chen: Thank you for your time. And I'd like to be more interested in the following questions. The first two are more about us, and the last two are more about our industry. The first one is our store expansion plan and strategy. It means we would really like to restore the original channel or more to supplement the new thinking channel. And the second question is about how to evaluate Ninebot's aggressive sales target this year and whether to squeeze our sales target, and the above two are about us. And I wonder if we'd like to stop this too, and then I'm going to the chapter.

Just to mention.

Also all the.

Users are high.

We offer a product.

Yes, it's.

It's Ron it's a pretty long.

Accumulate six well.

Long time, so I'm very curious about whether we can.

We have done.

Analyze this.

Uh huh.

Behavior.

A lot there.

We can't change in consumption habits from accumulated.

Such as changes in the cycle changes.

Yan Li: Right, so I'll talk about first the store openings. I think you're actually mixed up. Basically, I think we're still going to be focused on the top 45 cities at first.

Cos or batteries.

This is.

Right right.

Two questions about sector.

Sure I think first of all I'll address the issue.

As far accident I think.

It's unfortunate.

Yan Li: And with the option to expand into other cities as well. So notably in the past, if you look at the last couple of years, because the lithium price is high. Yating Chen, Jing Chang, Niu Technologies Sponsored ADR Class A, So I think those are basically we have a clear roadmap, Location Map on where to open stores based on our new product portfolio. No, I think with the second question about competitors, I think, overall, if you look at our product portfolio, product offerings, our current product offering is basically a price range anywhere between basically $3,500 RMB and up to 12,000 R So when you look at the entire market, the volume above 3500 RMB, that volume is basically somewhere around, you know, 14 to 16 million. So within that, let's call that our addressable market of 14 to 16 million units. And with that number, last year we only did, what, you know, 600,000.

So I think what it really cost of four high quality.

<unk>.

Yes, I think that.

So you know.

In the case, where what we observed in the market as many people who've byproduct either low quality.

By product then you know they buy the argument of scooters, but then.

Complement with a modest by third party lithium batteries unusual either those third party.

Lithium battery or secondhand lithium batteries.

Ported manufactured with low quality, that's where.

So.

I am not sure what the actually the cost of 95.

Our experience back then throw all the time.

Actually the modified lithium batteries.

Not arancino manufacturer ones are one of the main causes so I think from our perspective, I mean, we have actually taken many cost.

Preventive measures wakes up our scooters only work with our batteries.

Not necessarily not working with a third party on batteries and I think with this I think it's basically a.

Basically raised the bell.

<unk>.

Sure.

Basically I think it's basically people quite four four.

Yan Li: So even with this year's forecast, I think, you know, the market is still, the addressable market is still significantly larger than our volume target. So in a sense, you know, I think we're less worried about the competitors, but I think we're more focused internally on how to get the best product out there and how to expand the channels, expand the stores, so the consumers, the interested consumers, actually have a location to acquire the product. I think that's sort of, hopefully that answers your second question. I got it quite clear. And I really hope that this year could be and we could see a robust team in our, in our market. And the next two questions are about the sector. The first one is the Nanjing fire which has attracted the attention of society to the batteries of the two wheelers.

I think it's a high quality product with Orange.

Parts are.

Are necessary.

And took care of <unk> right. So I think that's accurate.

Set of advantage for us.

No I think that in terms of your second question about our user behaviors.

Typically well serve the people to attempt to keep these scooters.

I guess the first three roughly about three to four years I think three years roughly sort of.

The usage cycle.

The for Us where we're highly <unk> to.

Too concentrated in the top tier cities I think this year its actually what we're looking at is actually beyond.

Besides.

Kidney market sharing in the top tier cities.

Actually expand our footprint and getting more.

Our store coverage as well as market shares in the tier two or tier three cities.

Yating Chen: What is our view of the impact on this sector? And the second is that our users are more concentrated in high-tier cities, as you just mentioned. And also, our users' time of using our products is relatively long and has accumulated for a long time. So I'm very curious about whether we can, or whether we have ever done some analysis of our users' behavior on whether we can detect changes in their consumption habits from this accumulated data, such as changes in the cycle of changing costs or batteries.

With basically with products that are suitable for those market.

Go ahead.

Alright quite clear and thank you again.

Sincerely hope that we could achieve the goals of this year.

Thank you.

Yeah. Thanks, Thank you for the questions go.

Your next question comes from the line of <unk> Chen from CIC. Please ask your question.

Yeah.

Hi, Thank you for my question.

Yan Li: Thank you. This is my question about the sector. Sure, I think first of all, we should address the issue with the fire accident. I think we're, you know, it's unfortunate.

First question is about our sales volume target.

As we can see the traffic growth for 'twenty 'twenty four is.

Yan Li: So I think what it really calls for is a high quality product. And I think that's so, you know, or, you know, in the case we observed in the market, many people who buy products, either low quality, or they buy products, then you know, they buy the original scooters, but then they complement them with modified third-party lithium batteries. And usually, the third-party lithium battery or second-hand lithium batteries, you know, they're poorly manufactured with low quality, that's where so, you know, I'm not sure what the actual cost of the 9g fire is, but, you know, from my experience back then, you know, throughout the time, it, you know, it's actually the modified lithium batteries, like a, Not original manufactured ones are one of the main causes.

Is more optimistic than last year, and so I'd like to know.

What is that target just volume kicks gutierrez.

And what about <unk>.

What is the sales target for two wheelers.

Specially.

For domestic and overseas market.

This is my first question. Thank you.

No I think for the.

For the kick scooters were looking at because.

You know in the past few years, even though the selling volume to our distributors remain roughly constant.

But the sell off basically that fell to the consumer has been doubled.

If I compare 2023 to 2022, so that's because you know the comprehensive product portfolio.

Yan Li: So I think from our perspective, I mean, we have actually taken many cautious, you know, preventive measures. For example, our scooters only work with our batteries. Not necessarily, not working with third-party second-hand batteries, and I think with this, I think it's basically a, it basically rings a bell saying, you know, It's basically, I think it's basically people cry for, I think it's basically a high quality product with original parts, Alright, so I think that's actually pretty, you know, sets an advantage for us. Um, no, I think that in terms of your second question about user behaviors, I think typically we'll observe that, you know, people tend to keep this scooter for roughly about three to four years. I think three years roughly sort of the usage cycle.

So over the year, we're actually able to get two oldest offline channel.

So expect the.

Oh oil.

This year, it also doubled which sort of sort.

What are you implying the sell in volume to the distributions distributors to actually double its volatile and it takes whenever we're looking at somewhere anywhere between 200000 tons.

250000 units.

So I think that that's on the on the peak scooter markets.

Then the rest of.

Is it sort of the.

Electric two wheelers.

Within the electrical two Wheeler market volume I think majority of them are going to be in the China side, where the international electric Twitter electric motorcycles, probably somewhere around 20 to 30000 units.

Yan Li: I think the problem for us is, you know, we're highly, we're a bit too concentrated in the top tier cities. I think this year what we're looking at is actually the young, besides, you know, giving market share to the top tier CDs, is actually expanding our footprint and getting more Store coverage as well as market shares in tier 2 and tier 3, Yating Chen, Jing Chang, Niu Technologies Sponsored ADR Class A Got it quite clear, and thank you again for your time, and I sincerely hope that we can achieve the goals of this Thank you. Yeah, thank you. Thank you for the question. The next question comes from the line of Yating Chen from CICC.

The rest of it Oh, China.

Thank you very much and my first question and then my second question is about our Oh, our profit margin.

Especially.

I would like to know our product strategy in 2024.

To us to achieve our sales volume targets.

The average selling price or or Prostates margin will decline in 2000.

Sure.

Alright.

So I think you know basically.

Yeah look I guess this question sort of relates to our first cross unit alongside the <unk>.

Yating Chen: Please ask your question. Hello, thank you for receiving my question. My first question is about our sales volume target. As we can see, the target growth for 2024 is more optimistic than last year. And so I'd like to know what is the target sales volume of kick scooters and what is the sales target for two-wheelers, especially for domestic and overseas markets? This is my first question.

<unk> P M.

March so that's actually that more and more of the premium or high end product for our case the pricing retail pricing between 6000 to 12000 RMB, but then.

If you look at the another.

Another product was just launched.

It's called <unk> basically upgrading you won.

Few days ago that retail pricing is around 4000 RMB. So you can look at across the board, we expect our average ASP to roughly remain constant.

Yan Li: Thank you. No, I think for the kick scooters we're looking at because, in the past few years, even though the sell-in volume to our distributors remains roughly constant, but the sell-off, basically the sell-off to the consumer has been doubled, if I compare 2023 to 2022. So that's because, you know, the comprehensive product portfolio, also, we're actually able to get to all these offline channels over the year. So we expect the sell-off volume this year also doubled, which sort of, you know, sort of implies the sell-in volume to the distributors actually doubled as well. So on the kick scooter, we're looking at somewhere, you know, anywhere between, you know, 200,000 to 250,000 units. So I think that's on the And the rest of it, old China.

Paired with last year.

I'll, let beyond the comments on the larger part yeah well.

I just mentioned.

Even though that we upgraded our classic our classic NCR with and we're about to launch date for you.

Our products in the following months.

I would say a better price.

Tomorrow Cisco product.

But the ESP will Ah stay at a relatively flat level in the domestic product line.

Well in the.

Overseas product line.

I think you know we have a highly expectation on the on the motorcycle animal pets recovery overseas markets.

Those are you know almost a three to four times higher than they are keytruda as P itself is back to.

Yan Li: Thank you very much. And my first question and my second question are about our profit margin. Especially, I'd like to know our product strategy in 2024. To achieve our sales volume target, will the average selling price or our profit margin decline in 2024? Alright, so, I think, you know, basically, in. We look at, I guess this question sort of relates to our first product launch, the NX, and the NXP in March. So that's actually more of a premium, a high-end product in our case. The pricing, retail pricing is between $6,000 to $12,000 RMB.

Were they expected.

Likely recovery of property from the overseas Scooter S. P in 'twenty 'twenty four altogether.

<unk> will give us a oh.

I'll gladly in school there yet.

Almost at the same level in in this year go back to the gross margin for the domestic scooter satiny overseas corridors, we would've expected a slightly gross margin increased to a one point to two points PBT one to two.

The PPP altogether blended with at Alaska, and the overseas market and here at all.

We have already.

Made the cost to our cost.

Our efficiency those operational activity in 2023, and with the scale of our sales volume increase when they get the benefit from their wells Marty, but we didn't expect it to a higher gross margin increase because we feel you know consider two was Hershey.

Yan Li: But then, you know, you look at another product, which is launched; it's called U1E, basically upgrading U1, which a few days ago, the retail pricing is around $4,000 RMB. So across the board, we expect our average ASP to roughly remain constant compared with last year. So I'll let Jian comment on the margin part.

Sure the profit with our dealers and also the overseas market expansion with our partners. That's why you know we consider it the gross margin all together, we only increased to one increase.

Wenjuan Zhou: Yeah, well, as Jian just mentioned, even though we upgraded our classic N series, and we're about to launch a new product the following month with a better price versus the current product, but the ASP will stay at a relatively flat level in the domestic product line. Well, in the overseas product line, since, you know, we have a high expectation for the e-motorcycle and moped recovery in the overseas market, those are, you know, almost three to four times higher than the kick scooter ASP. So we will expect a slight recovery from the overseas scooters ASP in 2024, almost at the same level in this. Go back to the growth margin for the domestic scooters and the overseas scooters; we were expected to see a slight growth margin increase of 1.0 to 2.0. 1.2 point PPP, altogether, blended with the domestic and the overseas part.

One to two points PBT for the whole year.

Yeah.

Oh, Thank you very much and bye.

Thank you very much and my last question is on I'd like to know do you have any guidance for it.

Tuesday for on the selling expense ratio or Tuesday, where each girl or remain steady.

Compelling ways 2023.

Yeah.

Well its like last week, David very special case since we have we are in the transition of our overseas expansion and also <unk>.

On the heart in the domestic market. That's why they are expenses ratio is pretty high.

But.

I think the benchmark for the off what he expenses as a percentage of revenue we could use the benchmark at the second half of 2021 first half of 'twenty two.

Wenjuan Zhou: You know, we we have already made the cost cost efficiency, those operational activities in 2023. And with the scale of the of the sales volume increase, we may get the benefit from the growth margin, but we didn't expect it a higher growth margin. Yating Chen, Jing Chang, Niu Technologies Sponsored ADR Class A, Oh, thank you very much. And my.

We made a we will try to to bring back the a.

D. I spent it expenses as percentage of revenue Oh back to that level, which means at least that we will have a.

Wenjuan Zhou: Thank you very much. And my last question is, I'd like to know, do you have any guidance for 2024 on the selling expense ratio? Or to say, will it grow or remain steady compared with 2023? Well, 2023 is a very special case since we are in the transition of overseas expansion and also, you know, the hard landing in the domestic market. That's why the expenses ratio is pretty high. But, you know, I think the benchmark for the expenses as a percentage of revenue we could use the benchmark in the second half of 2021 and the first half of 2022. We may, you know, we will try to bring back the expenses as a percentage of revenue, go back to that level, which means at least we will have a. We will maintain the expenses within 20% to 24% since it's a slightly large range. We are still in the transition between the overseas and the domestic market balance. But, you know, the first half of 2022 and the second half of 2021 is a benchmark for the expenses ratio. So this is our target for the 2024 expenses ratio. Thank you very much. That's all my questions.

With that we will we will we will maintain the expenses within a.

20% to 24%.

It's a you know a slight lead large range.

We are still early in this transition you know putting overseas and the domestic markets balanced, but you know are the the first half of 2022 and second half of 'twenty, one and if they a benchmark updating expenses ratio.

Oh. This is the this is our target for 2024.

Our expenses ratio.

Thank you very much that's all my questions.

Thank you for the questions once again to ask a question. Please press star one.

Okay.

Okay.

One moment for the next question.

Okay.

We have a question from the line of Michael Simmons from global to USA. Please go ahead.

Hello talk to me.

Like to ask a question about the balance sheet.

And these are sort of slightly tough trading conditions.

You and your team have done a good job.

Maintaining a good cash level and the balance sheet, but can you just give us a feel for looking forward this year, particularly.

As you've explained youre going to be spending some money on your international expansion.

So nearing to launch many new products.

Can you just give us some feel for what the balance sheet from a cash position slightly to look like going forward. Please.

Yeah.

Well this is beyond from a from you.

I can't I, just can't give the trend of our balance sheet is that off the exact figure because you know oh.

We are still at the very beginning of 'twenty one for <unk> just mentioned.

<unk> for the operating activities and strategies, we introduced a pop up that we may spend.

The higher Capex.

Yating Chen: Thank you for the questions. Once again, to ask questions, please press star 11. One moment for the next question. We have a question via Michael Simmons from Global View SA. Please go ahead. Yeah, hello, Dr. Li.

The store opening in domestic market I think this is the big you know are not operating.

Consumption in the domestic from our strategy well in the overseas markets, we didn't expect that.

Michael Simmons: Yeah, I'd just like to ask a question about the balance sheet in these sort of slightly tough trading times. You and your team have done a good job maintaining a good cash level in the balance. Can you just give us a feel for looking forward to this year, particularly... Money on Your International Expansion? We are continuing to launch many new products. Kent, can you just give some feel for what the balance sheet looks like... Well, this is Piyong from VIEW. I think I can, I just can't give the trend of our, you know, balance sheet instead of the exact figures because, you know, we are still, you know, at the very beginning of 2024.

Any large capex.

The only.

Our operational activities will have what will happen in 2024.

Is that how we lunched.

How we launched our products and our in our a strategic partner stores.

So those are purely operational operational activities will reflect it in the operational cash flow.

This is a hash slow parts and the Capex part.

In the meantime, we didn't expect that yeah, you know in a huge increase in the our receivables all the payables essentially around the idea of our business model.

Wenjuan Zhou: As Yen just mentioned, except for the operating activities and strategies we introduced, on top of that, we may spend higher capital on the store opening in the domestic market. I think this is the big, you know, non-operating consumption in the domestic strategy. Well, in the overseas markets, we didn't expect, you know, any large capex. The only, you know, operational activities will happen in 2024; that is how we launched, you know, how we launched our products in our strategic partner stores. So those are purely the operational activities that we reflected in the operational cash flow. So this is the cash flow part and the capital expenditure part. In the meantime, we didn't expect the, you know, huge increase in receivables or payables.

Straightforward a lot.

And we also see it in it and we didn't expect that the higher increase in the inventory as well cause you at all right now.

Already have enough <unk>.

Ah enough inventory for the big season sales being 21 before and after that we may remain relatively secure level update inventory, but we're not you know we're not reached to them.

The higher London, 2000, Twenty's weighted.

So I think the business model doesn't change the only need that if we want to expand.

The I D.

Dorothy domestic market it will bring up the Capex a.

Wenjuan Zhou: So I think the business model doesn't change. The only thing is that if we want to expand the stores in domestic markets, it will bring up the capex. While the current production has already reached the 2 million production capacity. And we didn't expect, you know, as high as this level of sales volume, so we don't we don't have any, you know, further demand for the expansion of our facility.

While the current production.

Has already reached.

Reached two 2 million production capacity and where do you expect that you know a Ah Ah Ah Ah is.

Hi at this level of sales volume. So we don't we don't have any you know Florida.

Martin on the expansion.

Our facility.

Wenjuan Zhou: I hope this will address your question. Thank you very much. Thank you for your questions.

I Hope this will address your question.

Thank you ma'am.

That's useful.

Unknown Executive: With that, I would like to turn the call back to management for closing. All right, thanks, everyone, for being a participant in today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect your line.

Thank you for the questions.

I would like to turn the call back to management for closing.

Alright, thanks to everyone for it.

For participating in today's call and for your support we appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you.

Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect your lines.

Yeah.

Yeah.

Okay.

Okay.

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Okay.

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