Q2 2026 Niu Technologies Earnings Call

August 10, 2026

Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the NIU Technologies Second Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. 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. I will turn the call over to Ms. Kristal Li, Investor Relations Manager of NIU Technologies. Ms. Li, please go ahead.

Speaker #1: 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.

Speaker #1: Now, I will turn the call over to Ms. Kristal Li, Investor Relations Manager of Niu Technologies. Ms. Li, please go ahead.

Speaker #2: Thank you, operator. Hello everyone. Welcome to today's conference call to discuss new technologies result for the second quarter 2026. The earnings press release cooperate presentation and financial spreadsheets has been posted on our investor relations website.

Kristal Li: Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss NIU Technologies results for Q2 2026. The earnings press release, corporate presentation, and financial spreadsheets has been posted on our investor relations website. This call is being webcast from company's IR site as well. A replay of the call will be available soon. Please note today's discussion will contain forward-looking statements made under the safe harbor provision of the US Private Securities Litigation Reform Act of 1995. 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 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.

Speaker #2: This call is being webcast from the company's IR site as well, and a replay of the call will be available soon. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provision of the U.S.

Speaker #2: Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions, and other factors. The company's actual results may be materially different from those expressed today.

Speaker #2: Further information regarding the risk factors is included in company's public filings with the security and exchange commission. The company does not assume any obligation to update any forward-looking statement except as required by law.

Speaker #2: Our earnings press release and this call include discussion of certain non-GAAP financial measures, and the press release contains a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results.

Kristal Li: Our earnings press release and this call include a discussion of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results. On the call with me today are our CEO, Dr. Yan Li, and CFO, Ms. Wenjuan Zhou. Let me turn the call over to CEO Yan.

Speaker #2: On the call with me today are our CEO, Dr. Yan Li, and CFO, Ms. Fang Zhou. Now, let me turn the call over to CEO Yan.

Yan Li: Hello, everyone. Thank you for joining our Q2 2026 results call. In Q2 2026, we continue to execute our core mandate of high-quality resilient growth while navigating a profound structural adjustment in the domestic two-wheeler market and accelerating the strategic realignment of our international business. For Q2 2026, we achieved a total sales volume of 434,000 units, representing a robust year-over-year increase of 24%. This expansion was propelled by the China sales reaching 400,000 units, up 26% year-over-year. Overseas shipments scaled to 32,000 units, up 3.6% year-over-year, signaling a steady operation recovery in the international business. Total revenue for the quarter reached RMB 1.44 billion, representing a year-over-year growth of 14.7%. Gross margin stood at 16%. This primary trajectory was driven by three main factors.

Speaker #3: Thanks, Dr. Kristal. Hello, everyone. Thank you for joining our second quarter 2026 results call. In the second quarter of 2026, we continued to execute our core mandate of high-quality, resilient growth while navigating a profound structural adjustment in the domestic two-wheeler market and accelerating the strategic realignment of our international business.

Speaker #3: For Q2 2026, we achieved a total sales volume of 434,000 units, representing a robust year-over-year increase of 24%. This expansion was propelled by China sales reaching 400,000 units, up 26% year-over-year, and overseas shipments scaling to 32,000 units.

Speaker #3: Up 3.6% year-over-year, signaling a steady operational recovery in the international business. Total revenue for the quarter reached RMB 1.44 billion, representing year-over-year growth of 14.7%.

Speaker #3: Growth margins stood at a 16%. This primary trajectory was driven by three main factors. First, the active promotional sales clearance and inventory write-off of our international micromobility business.

Yan Li: First, the active promotional sales clearance and the inventory write-off of our international micro-mobility business. Second, the structural product mix shift towards the higher volume electric motorcycles in China, which carries relatively lower margins compared to our historical premium e-bicycle segment. Third, ongoing cost pressure from elevated raw material prices. Crucially, those collective headwinds were partially offset by our ongoing components platformization and the commercial cost reduction initiatives. I would like to provide more details on our performance and strategic executions across both China and the international market. First, let's talk about China market. In Q2 2026, the China sales volume grew 26% year-over-year to 400,000 units. This strong volume growth was achieved against the challenging regulatory and the macroeconomic backdrop.

Speaker #3: Second, the structural product mix shifted towards a higher volume of electric motorcycles in China, which carries relatively lower margins compared to our historical premium e-bicycle segment.

Speaker #3: And third, ongoing cost pressure from elevated raw material prices. Crucially, those collective headwinds were partially offset by our ongoing components platformization and the commercial cost reduction initiatives.

Speaker #3: Now, I would like to provide more details on our performance and strategic executions for both the China and international markets. First, let's talk about the China market.

Speaker #3: In Q2 2026, the China sales volume grew 26% year-over-year to 400,000 units. This strong volume growth was achieved against a challenging regulatory and macroeconomic backdrop.

Speaker #3: Now, with the full enforcement of the new national standard for electric bicycles, coupled with broader consumer demand decline in the top-tier cities, the domestic two-wheeler market is undergoing significant structural transformations.

Yan Li: With the full enforcement of new national standard for electric bicycles, coupled with broader consumer demand decline in the top-tier cities, the domestic two-wheeler market is undergoing a significant structural transformations. Specifically, the premium e-bicycle segment, historically our strongest category, experienced a meaningful industry-wide contraction, with the H1 decline estimated between 25% and 30%. Concurrently, consumer demand has decisively expanded towards electric motorcycles, especially in lower-tier cities where the motorcycles are not banned, a category with lower average selling prices and margins than the premium e-bicycles. We proactively reallocate our R&D and product resources in advance, aggressively pivoting towards a high-growth electric motorcycle segment. The structural momentum of electric motorcycle business is now directly offsetting the pressure in the premium e-bicycles, establishing a strong foundation for our next growth phase. First talk about the product portfolios.

Speaker #3: Specifically, the premium e-bicycle segment, historically our strongest category, experienced a meaningful industry-wide contraction, with the first half decline estimated between 25% to 30%.

Speaker #3: Concurrently, consumer demand has decisively expanded towards electric motorcycles, especially in lower-tier cities, where the motorcycles are not banned—a category with lower average selling prices and margins than the premium e-bicycles.

Speaker #3: We proactively reallocate our R&D and product resources in advance, aggressively pivoting towards a high-growth electric motorcycle segment. The structural momentum of the electric motorcycle business is now directly offsetting the pressure in premium e-bicycles, establishing a strong foundation for our next growth phase.

Speaker #3: Now, first, talk about the product portfolios. During the second quarter, our execution focused on decisive structural engineering of our product portfolios. In terms of electric motorcycles, the electric motorcycle category contributed approximately 60% of our China sales volume in Q2, serving as a primary growth engine of our domestic business.

Yan Li: During Q2, our execution focused on decisive structural reengineering our product portfolios. In terms of electric motorcycles, the electric motorcycle category contribute approximately 60% of our China sales volume in Q2, serving as a primary growth engine of our domestic business. We continue to strategically concentrate resources here, building our comprehensive product matrix across key consumer user cases. First, following the strong reception of Windstorm series, we expand aggressively with the N Fengchi series, a high-performance model purposed to build for delivery professionals and high-frequency cargo use. Delivering 0 to 50 km per hour acceleration in just 5.4 seconds and top speed of 70 km per hour, and support for mainstream battery swapping. It priced at an accessible RMB 3,399, achieved a record-breaking online pre-order of 32,000 units on its very first day.

Yan Li: During Q2, our execution focused on decisive structural reengineering our product portfolios. In terms of electric motorcycles, the electric motorcycle category contribute approximately 60% of our China sales volume in Q2, serving as a primary growth engine of our domestic business. We continue to strategically concentrate resources here, building our comprehensive product matrix across key consumer user cases. First, following the strong reception of Windstorm series, we expand aggressively with the N Fengchi series, a high-performance model purposed to build for delivery professionals and high-frequency cargo use. Delivering 0 to 50km per hour acceleration in just 5.4 seconds and top speed of 70km per hour, and support for mainstream battery swapping. It priced at an accessible RMB 3,399, achieved a record-breaking online pre-order of 32,000 units on its very first day.

Speaker #3: We continue to strategically concentrate resources here, building our comprehensive product matrix across key consumer use cases. First, following the strong reception of the Windstorm series, we spent aggressively with the M Fengchi series, a high-performance model purposely built for delivery professionals and high-frequency cargo use.

Speaker #3: Delivering 0 to 50 kilometers per hour acceleration in just 5.4 seconds, a top speed of 70 kilometers per hour, and support for mainstream battery swapping.

Speaker #3: A price at an accessible RMB 3,399 achieved a record-breaking online pre-order of 32,000 units on its very first day. In April, we also launched an NX Marathon series to directly eliminate range anxiety and the charging constraint.

Yan Li: In April, we also launched the NX Marathon series to directly eliminate range anxiety and the charging constraint. Equipped with a high capacity 72-volt 50 amp hour battery, it delivers a verified full throttle range of 146 km. In Q2 alone, the NX Marathon contributed 11% of our total domestic sales volume. Building on this momentum, we further expand the lineup in July with the NX 100 and NX 70, extending our price point coverage and solidifying our leadership in the family commuting segment. In terms of e-bicycle segment, we maintain a long-term commitment to a market while systematically strengthening our product matrix under the new national standard. First, we enhance our entry-level offerings, led by the Y series, to effectively broaden the consumer access.

Yan Li: In April, we also launched the NX Marathon series to directly eliminate range anxiety and the charging constraint. Equipped with a high capacity 72-volt 50 amp hour battery, it delivers a verified full throttle range of 146km. In Q2 alone, the NX Marathon contributed 11% of our total domestic sales volume. Building on this momentum, we further expand the lineup in July with the NX 100 and NX 70, extending our price point coverage and solidifying our leadership in the family commuting segment. In terms of e-bicycle segment, we maintain a long-term commitment to a market while systematically strengthening our product matrix under the new national standard. First, we enhance our entry-level offerings, led by the Y series, to effectively broaden the consumer access.

Speaker #3: Equipped with a high-capacity 72-volt, 15-amp power battery, it delivers a verified full-throttle range of 146 kilometers. In Q2 alone, the NX Marathon contributed 11% of our total domestic sales volume.

Speaker #3: Now, building on this momentum, we further expand the lineup in July with the NX 100 and NX 70 extending our price point coverage and the solidifying our leadership in the family commuting segment.

Speaker #3: Now, in terms of e-bicycle segment, we maintain a strong long-term commitment to a market where systematically strengthen our product matrix under the new national standard.

Speaker #3: First, we enhance our entry-level offerings, led by the Y series, to effectively broaden consumer access. Second, we are actively in the process of reintroducing key models in the RMB 5,000 to 7,000 price range, reestablishing our technological leadership in the premium e-bicycle space.

Yan Li: Second, we are actively in the process of reintroducing key models in the RMB 3,000 to 7,000 price range, reestablishing our technological leadership in the premium e-bicycle space. Now while maintaining a prudent discipline during the current market condition, we're fully prepared to capitalize on market recovery when demand returns, leveraging our complete and diversified compliance portfolio. Now second, let me talk about R&D and technology. The technology and continuous innovation remains core to Niu's long-term strategy. Following our March vision announcement to redefine mobility and enter the era of AI-powered two-wheel electric vehicles, we move decisively in Q2 alongside leading technology partners to convert hardcore AI capabilities into tangible mass market user experience. Core features including the new AI OS, screen navigations, integrated triple camera recorder system, AI pets, and AI voice interaction are now fully integrated across multiple mass production models.

Speaker #3: Now, while maintaining prudent discipline during the current market conditions, we're fully prepared to capitalize on a market recovery when demand returns, leveraging our complete and diversified compliance portfolio.

Speaker #3: Now, second, let me talk about R&D and technology. Technology and continuous innovation remain core to NIU's long-term strategy. Following our March vision announcement to redefine mobility and enter the era of AI-powered two-wheel electric vehicles.

Speaker #3: We made a decisive move in Q2 alongside leading technology partners to convert hardcore AI capabilities into tangible mass market user experiences. Core features, including the new AIOS screen navigation, integrated triple-cam recorder system, AI Pads, and AI voice interaction, are now fully integrated across multiple mass production models.

Yan Li: Our user data confirm those features are being frequently used. For example, in terms of our sweep screen navigations, it reach approximately 190,000 monthly active users. Now adding to those technology momentum, our new AI officially received two Red Dot awards for interface and user experience design. This marks the first time two-wheeler operating system has received international recognition, serving as a powerful global validation of our design and technological leadership. Now let me talk about the brand and marketing. On the brand front, we continue to execute our strategy of brand-driven growth, deliberately expanding Niu's position from a niche top-tier urban geek brand towards a broader mass premium market. We're driving a full funnel brand awareness and mainstream consumer acquisition through a multi-touch point approaches. First, support of our global celebrity ambassador, large-scale brand campaigns, influencer content, and user engagement programs.

Speaker #3: Our user data confirm those features have been frequently used. For example, in terms of speed, our screen navigations a reach approximately 190,000 monthly active users.

Speaker #3: Now, adding to that technology momentum, our new official awards for interface and user experience design—this marks the first time a two-wheeler operating system has received this international recognition, serving as a powerful global validation of our design and technological leadership.

Speaker #3: Now, let me talk about the brand and marketing. On the brand front, we continue to execute our strategy of brand-driven growth deliberately expanding NIU's position from a niche top-tier urban geek brand towards a broader mass premium market.

Speaker #3: We're driving a full-funnel brand awareness and mainstream consumer acquisition through multi-touchpoint approaches. First, supported by our global celebrity ambassador, large-scale brand campaigns, influencer content, and user engagement programs.

Speaker #3: We are actively shifting brand perception from single-brand recognition to a deeper consumer understanding and engagement. Second, we sustain a targeted branded visibility investment across 37 key cities, occupying high-traffic touchpoints, including outdoor digital screens, major transit hubs, cinemas, and the central commercial district, generating over 5.9 billion total impressions.

Yan Li: We're actively shifting brand perception from single brand recognition to a deeper consumer understanding and engagement. Second, we sustain a target brand of visibility investment across 37 key cities, occupying high traffic touch point, including outdoor digital screens, major transit hubs, cinemas, and the central commercial district, generating over 5.9 billion total impressions. Last, we successfully launched a targeted offline community event such as Earth Day campaign that generated 250,000 exposures, and also Shanghai outdoor exhibitions, which generated 3.25 million impressions. Now on the retail channel side, in light of broader market uncertainties, we focus on same-store sales increase and prioritize the operational health and the profitability of retail ecosystem. In terms of network footprint, by end of Q2, our store network stood at a 4,570 stores nationwide, with lower tier cities accounting for 36% of our total footprint.

Speaker #3: And last, we successfully launched a targeted offline community event, such as the Earth Day campaign, that generated 250,000 exposures, and also the Shanghai Outdoor Exhibitions, which generated 3.25 million impressions.

Speaker #3: Now, on the retail channel side, in light of broader market uncertainties, we focus on same store sales increase and prioritize operational health and the profitability of retail ecosystem.

Speaker #3: In terms of network footprint, by the end of Q2 our store network stood at 4,570 stores nationwide, with lower-tier cities accounting for 36% of our total footprint.

Speaker #3: Now, by concentrating our resources on empowering existing retailers, same-store sales surged by 24% year over year, driving consecutive operational efficiency gains across our store network.

Yan Li: Now, by concentrating our resources to empowering existing retailers, the same-store sales surged by 24% year-over-year, driving a consecutive operation efficiency gains across our store network. We're focused on online channels. The online channel delivered a standout performance. In the Q2 online sales grew by 50% year-over-year and accounts for 64% of our total domestic retail sales. Besides the traditional Tmall and JD.com, we also opened on Douyin, powered by nine official flagship accounts and 1,600 dealer-operated accounts. We executed 57,000 live streams and produced 90,000 short-form video clips in Q2, and generating over 720 million impressions. Now let me talk about the international business. In Q2 2026, the overseas sales reached 32,485 units, representing a 3.6% year-over-year growth. This demonstrates our international business has steadily exited its structural adjustment phase to re-enter the growth trajectory. Now, first, talk about the international electric motorcycle business.

Speaker #3: And we'll focus on online channels. The online channel deliver a standout performance. In the Q2 online sales grew by 50% year over year and accounts for 64% of our total domestic retail sales.

Speaker #3: Besides the traditional team on JD.com, we also launched on Douyin, powered by nine official flagship accounts and 1,600 dealer-operated accounts. We executed 57,000 live streams and produced 90,000 short-form video clips in Q2, generating over 720 million impressions.

Speaker #3: Now, let me talk about the international business. In Q2 2026, overseas sales reached 32,485 units, representing 3.6% year-over-year growth. This demonstrates our international business has steadily exited its structural adjustment phase to re-enter the growth trajectory.

Speaker #3: Now, first, let's talk about the international electric motorcycle business. Our overseas electric motorcycle business maintained a powerful momentum, delivering 4,800 units in Q2—a substantial year-over-year increase of 50%.

Yan Li: Our overseas electric motorcycle business maintained powerful momentum, delivering 4,800 units in Q2, a substantial year-over-year increase of 50%. This performance directly validates the efficacy of our direct-to-retailer strategy. In terms of our networks, our dealer network successfully expanded from 307 stores at the beginning of the year to 417 active locations by end of Q2. In terms of product mix, following the successful introduction of our high-performance models such as NQiX 500, NQiX 300, FX200, the 125cc-plus category has rapidly climbed to account for approximately 50% of our total European sales volume. This premium mix optimization structurally lifts the gross margin profiles, enabling our team to achieve a key milestone of local profitability. Now, in the emerging market like Asia Pacific and other areas, we made steady progress through an asset-light, profitability-first approach.

Yan Li: Our overseas electric motorcycle business maintained powerful momentum, delivering 4,800 units in Q2, a substantial year-over-year increase of 50%. This performance directly validates the efficacy of our direct-to-retailer strategy. In terms of our networks, our dealer network successfully expanded from 307 stores at the beginning of the year to 417 active locations by end of Q2. In terms of product mix, following the successful introduction of our high-performance models such as NQiX 500, NQiX 300, FX200, the 125cc+ category has rapidly climbed to account for approximately 50% of our total European sales volume. This premium mix optimization structurally lifts the gross margin profiles, enabling our team to achieve a key milestone of local profitability. Now, in the emerging market like Asia Pacific and other areas, we made steady progress through an asset-light, profitability-first approach.

Speaker #3: This performance directly validates the efficacy of our direct retailer strategy. In terms of networks, our dealer network successfully expanded from 307 stores at the beginning of the year to 417 active locations by the end of Q2.

Speaker #3: In terms of product mix, following the successful introduction of our high-performance models such as the NX500, NX300, and FX300, the 125cc-plus category has rapidly climbed to account for approximately 50% of our total European sales volume.

Speaker #3: So this premium mix optimization structurally lifts the gross margin profiles and helps the team achieve a key milestone locally. Now, in emerging markets like Asia Pacific and other areas, we made steady progress through an asset-led, profitability-first approach.

Speaker #3: And we have made a first approach in, for example, Algeria, with sales of over 1,000 units, and Thailand, with sales of over 1,000 units. Now, we'll maintain this disciplined asset-light expansion model: first validate the product-market fit and local profitability, then selectively scale into additional high potential markets.

Yan Li: We have made a first approach, for example, Algeria with sales over 1,000 units and Thailand with sales over 1,000 units. We'll maintain this disciplined asset-light expansion model. First, validate the product-market fit and local profitability, then selectively scale into additional high-potential markets. In our micro-mobility business internationally, Q2 marked a successful completion of Tmall's channel transition, bringing the terminal sales velocity firmly back to an onward growth path. While the wholesale shipment reached 27,000 units, the end-user retail activation, which truly measures the organic consumer demand, exceeded 36,000 units, representing a 21% year-over-year growth in Q2. This activation trend accelerated month-over-month. For example, it grew at 21% in May and 37% in June, proving our inventory clearance initiatives are working effectively. Our promotional strategy for legacy models yielded highly positive results in terms of our channel clearing.

Speaker #3: Now, in our micro-mobility business internationally, Q2 marked the successful completion of our two-channel transition, bringing the terminal sales velocity firmly back to a growth path.

Speaker #3: While the wholesale shipment reached 27,000 units, the end user retail activation, which truly measured the organic consumer demand, exceeded 36,000 units, representing a 21% year-over-year growth in Q2.

Speaker #3: And this activation trend accelerated month over month. For example, it grew 21% in May and also 37% in June, proving our inventory clearance initiatives are working effectively.

Speaker #3: And our promotional strategy for legacy models yielded highly positive results in terms of channel clearing. As anticipated, those inventory clearance programs created a short-term compression on our micro mobility gross margin.

Yan Li: As anticipated, those inventory clearance program created a short-term compression on micro-mobility gross margin. We view this as a necessary, prudent, and deliberate investment to restore a long-term operation path. Now, Luca, had the second quarter in 2026 serve as a pivotal period for deliberate operational adjustments. In China, our momentum was anchored by the rapid acceleration of our electric motorcycle category, which successfully offset market-wide regulatory and macroeconomic headwinds in the electric bicycle segments. Moving into Q3, we'll continue leaning aggressively into the electric motorcycle growth momentum. We're expanding to new consumer segments by launching a female-focused product lines, while systematically deepening our market penetration with our Windstorm and Milesone product families.

Yan Li: As anticipated, those inventory clearance program created a short-term compression on micro-mobility gross margin. We view this as a necessary, prudent, and deliberate investment to restore a long-term operation path. Looking at the second quarter in 2026 serve as a pivotal period for deliberate operational adjustments. In China, our momentum was anchored by the rapid acceleration of our electric motorcycle category, which successfully offset market-wide regulatory and macroeconomic headwinds in the electric bicycle segments. Moving into Q3, we'll continue leaning aggressively into the electric motorcycle growth momentum. We're expanding to new consumer segments by launching a female-focused product lines, while systematically deepening our market penetration with our Windstorm and Milestone product families.

Speaker #3: But we view this as a necessary, prudent, and deliberate investment to restore a long-term operational path. Now, looking ahead, the second quarter in 2026 will serve as a pivotal period for deliberate operational adjustment.

Speaker #3: In China, our momentum was anchored by the rapid acceleration of our electric motorcycle category, which successfully offset market-wide regulatory and macroeconomic headwinds in the electric bicycle segments.

Speaker #3: Now, moving into Q3, we'll continue to aggressively drive electric motorcycle growth momentum. We're expanding into new consumer segments by launching female-focused product lines, while systematically deepening our market penetration with our Windstorm and Milestone product families.

Speaker #3: At the same time, while the broader, market-wide recovery in electric bicycles depends on market conditions and consumer sentiment, we're taking proactive internal steps to structurally improve our revenue and ASP in the e-bike segment today.

Yan Li: At the same time, while the broader market-wide recovery in electric bicycle depends on market conditions and consumer sentiment, we're taking proactive internal steps to structurally improve our revenue and ASP in the e-bike segment today. In Q3, we're reintroducing a refreshed lineup of mid- to high-end compliant e-bicycles, targeting the RMB 5,000 to 7,000 price range. By upgrading our product mix with premium features and advancing the integration of new AI OS and AI-assisted riding features, we aim to lift our ASP and defend our margin profile while broader markets stabilize. On the channel front, we'll continue to amplify our online traffic generation across social commerce platform, driving public domain traffic directly into our retail store network to support a sell-out across all categories.

Speaker #3: In Q3, we're reintroducing a refreshed lineup of mid to high-end compliant e-bicycles targeting the RMB 5,000 to 7,000 price range. By upgrading our product mix with premium features and advancing the integration of new AIOS and AI assist riding features, we aim to lift our ASP and defend our margin profile while broader markets stabilize.

Speaker #3: On the channel front, we'll continue to amplify our online traffic generation across social commerce platforms, driving public domain traffic directly into our retail store network to support a sell-out across all categories.

Speaker #3: Now, in the international market, our core electric motorcycle business will maintain steady structural growth, and our direct retailer strategy, leveraging the higher 125cc-plus model penetration, will help lift the regional margins.

Yan Li: In the international market, our core electric motorcycle business will maintain a steady structural growth under our direct-to-retailer strategy, leveraging the higher 125cc+ model penetration to lift the regional margins. Concurrently, our micro-mobility segment remains firmly on track, with our distribution transition largely complete. The active promotion clearance in Q3 will bring the overseas inventory back towards a healthy normal baseline by the end of the year. In summary, 2026 was an important year for structural transformation for NIU by capturing the volume growth in electric motorcycle, re-establishing our premium edge in e-bicycle, and advancing our AI ecosystem, and normalizing our overseas inventory while building a more resilient operation base. We remain disciplined, realistic about the market condition, and focused entirely on execution. I'll turn over to our CFO, Tianzhou, to talk about the financials.

Speaker #3: Concurrently, our macro mobility segment remain firmly on track with our distribution transition largely complete the active promotion clearance in Q3 will bring the overseas inventory back towards a healthy normal baseline by the end of the year.

Speaker #3: So in summary, 2026 was an important year for structural transformation for NIU by capturing the volume growth in electric motorcycle, reestablishing our premium edge in e-bicycle and advancing our AI ecosystem and normalizing our overseas inventory while building a more resilient operation base.

Speaker #3: We remain disciplined, realistic about the market conditions, and focused entirely on execution. Now, I'll turn it over to our CFO, Yan Zhou, to talk about the financials.

Wenjuan Zhou: Thank you, Yan. Hello, everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded Excel format figures to our IR website for easy reference. As I review our financial results, I'm referring to the Q2 figures unless I say otherwise. All monetary figures are in RMB, if not specified. As Yan just mentioned, our total sales volume for the Q2 was over 434,000 units, up 24% compared to the same period of last year. 402,000 units were sold in China, while the remaining 32,000 were sold overseas. Nearly 60% of our sales in China came from the top five bestsellers. The total revenue for the Q2 amounted to RMB 1.44 billion, an increase of RMB 185 million, or 15% compared to the same period of last year. China revenue was RMB 1.32 billion, accounting for 92% of total revenue.

Speaker #1: Thank you, Yan. Hello, everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded figures in Excel format to our IR website for your reference.

Speaker #1: As I review our financial results, I'm referring to the second quarter figures unless I say otherwise. All monetary figures are in RMB, unless specified otherwise.

Speaker #1: As Yan just mentioned, our total sales volume for the second quarter was over 434,000 units, up 24% compared to the same period last year. 402,000 units were sold in China, while the remaining 32,000 were sold overseas.

Speaker #1: Nearly 60% of our sales in China came from the top five best sellers. The total revenue for the second quarter amounted to $1.44 billion, an increase of $185 million, or 15%, compared to the same period last year.

Speaker #1: China revenue was $1.32 billion, accounting for 92% of total revenue. Of this, scooter revenue was $1.21 billion, a year-over-year increase of 15%.

Wenjuan Zhou: Of this, the scooter revenue was RMB 1.21 billion, a year-over-year increase of 15%. This growth was primarily driven by the higher sales volume, but partially offset by the decrease of revenue for e-scooters. China scooters ASP was RMB 3,010, down 9% year-over-year. This decline in ASP was primarily attributable to a shift in the product mix, with a higher proportion of the electric motorcycles. During this quarter, these models were primarily sold within a narrow retail price range of RMB 4,500 to RMB 7,000, including the models such as FX and X Windstorm versions. This kind of shift towards models within this price range resulted in a lower ASP compared with the same period of last year. Overseas revenue was RMB 116 million, representing 8% of the total revenue.

Speaker #1: And this growth was primarily driven by the higher sales volume but was partially offset by the decrease in revenue per e-scooter. China scooter ASP was RMB 3,010, down 9% year-over-year.

Speaker #1: And this decline in ASP was primarily attributable to a shift in the product mix. With the higher proportion of the electronic motorcycles during this quarter, these models were primarily sold within a narrow retail price range of RMB 4,500 to RMB 7,000.

Speaker #1: Including models such as FX and X, as well as Windstorm versions. This shift towards models within this price range resulted in a lower ASP compared with the same period last year.

Speaker #1: Overseas revenue was $116 million, representing 8% of total revenue. Scooter revenue, including electronic motorcycles, mopeds, kick scooters, and e-bikes, amounted to $106 million.

Wenjuan Zhou: Scooter revenue, including electric motorcycle, mopeds, kick scooters, and e-bikes, amounted to RMB 106 million, slightly increased from RMB 103 million in the same period of last year. This increase was driven by the higher sales volume. The ASP of overseas scooters was RMB 3,270. Revenue from accessories, spare parts, and services was RMB 124 million, a 29% increase compared to the same period of last year, mainly driven by the growth in NIU App services and higher sales of accessory and spare parts in China market. The gross profit for this quarter was RMB 230 million, declined from RMB 252 million during the same period of last year. The gross margin was 16%, 4.1 ppts lower than the same period of last year, of which 2.5 ppts decrease driven by the change in the product mix and higher cost in China market.

Speaker #1: This slightly increased from 103 million in the same period last year. This increase was driven by the higher sales volume. The ASP of overseas scooters was RMB 3,270.

Speaker #1: Revenue from accessories, spare parts, and services was $124 million, a 29% increase compared to the same period last year, mainly driven by the growth in new APP services.

Speaker #1: And higher sales of accessories and spare parts in the China market. The gross profit for this quarter was $230 million, declined from $252 million during the same period last year.

Speaker #1: The gross margin was 16%, 4.1 percentage points lower than the same period last year, of which 2.5 percentage points decreased due to changes in the product mix.

Speaker #1: And higher costs in the China market, and the rest is a 1.6 margin on overseas kick scooters. In the China market, as mentioned previously, electronic motorcycles accounted for a greater share of domestic sales.

Wenjuan Zhou: The rest of 1.6 ppts decrease due to the lower margin on overseas kick scooters. In China market, as mentioned previously, the electric motorcycles accounted for a greater share of the domestic sales, and these models carry lower gross margins compared with the e-bicycle models. Meanwhile, higher product costs across the upstream supply chain put additional pressure on the domestic gross margin. Internationally, the inventory clearance of the kick scooters resulted in a lower margin, which also contributed to the overall gross margin decline. The operating expenses for the second quarter were RMB 341 million, increased to RMB 76 million or 29% compared to the same period of last year. The OPEX ratio was 24%, up from 21% in the same period of last year, but down from 29% in the last quarter.

Speaker #1: And these models carry lower gross margins compared with the e-bicycle models. Meanwhile, higher product costs across the upstream supply chain put additional pressure on the domestic gross margin.

Speaker #1: And internationally, the inventory clearance of the kick scooters resulted in a lower margin, which also contributed to the overall gross margin decline. The operating expenses for the second quarter were $341 million.

Speaker #1: Increased to $76 million, or 29%, compared to the same period last year. The OPEX ratio was 24%, up from 21% in the same period last year.

Speaker #1: But down from 29% in the same period in the last quarter. Selling and marketing expenses rose by $36 million year-over-year to $239 million, primarily driven by the increase of R&B by $21.9 million and an intensified marketing plan in the domestic market starting from the beginning of this year.

Wenjuan Zhou: Selling and marketing expenses rose by RMB 36 million year-over-year to RMB 239 million, primarily driven by the increase of RMB 21.9 million in intensified marketing plan in the domestic market starting from the beginning of this year, including the e-commerce advertisement and branding. The RMB 12.2 million in depreciation and amortization expenses related to the new store expansion. Selling and marketing expenses accounted for 17% of revenue, up from 16% in the same period last year, but down from 20% in last quarter. R&D expenses increased by RMB 8 million year-over-year to RMB 52 million, primarily due to an increase in design testing costs as well as the staff cost. R&D expenses represented 3.6% of revenue, compared to 3.5% in the same period last year, and 4.5% in last quarter.

Speaker #1: Including the e-commerce advertisement and branding, the R&B, $12.2 million in depreciation and amortization expenses related to the new store expansion. Selling and marketing expenses accounted for 17% of revenue, up from 16% in the same period of last year, but down from 20% in last quarter.

Speaker #1: R&D expenses increased by $8 million year-over-year to $52 million, primarily due to an increase in design and testing costs, as well as staff costs.

Speaker #1: R&D expenses represented 3.6% of revenue, compared to 3.5% in the same period last year, and 4.5% in the last quarter. G&A expenses increased by RMB 31 million year-over-year to RMB 51 million.

Wenjuan Zhou: G&A expenses increased by RMB 31 million year-over-year to RMB 51 million, primarily due to the foreign exchange losses related to the remeasurement of the foreign currency-denominated assets, mainly the accounts receivable. At the overall earnings level, the impact of these foreign exchange losses were partially offset by the interest income. G&A expenses represented 3.5% of revenue, compared with 1.5% in the same period last year, but down from 4.7% in the previous quarter. Excluding the impact of foreign exchange losses, G&A expenses were RMB 32 million, compared with RMB 44 million in the same period last year. In the second quarter, we had a net loss of RMB 102 million, with a net loss margin of 7.1% under the GAAP accounting, compared to a net income of RMB 5.9 million with a net income margin of 0.5% for the same period of last year.

Speaker #1: Primarily due to the foreign exchange losses related to the remeasurement of the foreign currency-denominated assets, mainly the accounts receivable. At the overall earnings level, the impact of these foreign exchange losses was partially offset by interest income.

Speaker #1: G&A expenses represented 3.5% of revenue, compared with 1.5% in the same period last year, but down from 4.7% in the previous quarter. Excluding the impact of foreign exchange losses, G&A expenses were RMB 32 million.

Speaker #1: Compared with RMB 44 million in the same period of last year. In the second quarter, we had a net loss of RMB 102 million with a net loss margin of 7.1% under the GAAP accounting, compared to a net income of RMB 5.9 million with a net income margin of 0.5% for the same period of last year.

Speaker #1: And the non-GAAP net loss was $90.8 million, with a non-GAAP net loss margin of 6.8%. Turning to our balance sheet and cash flow, we ended the quarter with RMB 1.7 billion, an increase of 36 million compared to the end of last year, in cash, restricted cash, term deposits, and short-term investments.

Wenjuan Zhou: The non-GAAP net loss was RMB 98 million, with a non-GAAP net loss margin of 6.8%. Turning to our balance sheet and cash flow, we ended the quarter with RMB 1.7 billion, increased RMB 36 million compared to the end of last year in cash, restricted cash, term deposit, and short-term investments. Our operating cash inflow amounted to RMB 392 million. The CapEx for the second quarter amounted to RMB 53 million, reflecting an increase of RMB 21 million compared to the same period of last year. This can be primarily attributed to an increase in the opening of new stores and modules cost in China. Now let's turn to guidance. We expected the third quarter revenue to be in the range of RMB 1.86 billion to RMB 2.03 billion, an increase of 10% to 20% year-over-year.

Speaker #1: Our operating cash inflow amounted to $392 million. The CapEx for the second quarter amounted to $53 million, reflecting an increase of $21 million.

Speaker #1: Compared to the same period last year. This can be primarily attributed to an increase in the opening of new stores and module costs in China.

Speaker #1: And now let's turn to guidance. We expect third quarter revenue to be in the range of RMB 1.86 billion to RMB 2.03 billion, an increase of 10% to 20% year-over-year.

Wenjuan Zhou: Please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectation, which is subject to change due to uncertainties related to various factors. With that, we'll now open the call for any questions that you may have for us. Operator, please go ahead.

Speaker #1: And please be aware that this outlook is based on the information available as of the date, and reflects the company's current and preliminary expectations, which are subject to change due to uncertainties related to various factors.

Speaker #1: And with that, we now open the call for any questions that you may have for us. Operator, please go ahead.

Speaker #2: Thank you. To ask a question, you'll need to press star one one on your telephone and wait for your name to be announced.

Operator: Thank you. To ask a question, you'll need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Seeing no questions in the queue, let me turn the call back to Dr. Yan Li for closing remarks.

Speaker #2: To withdraw your question, please press star one and then one again. Seeing no questions in the queue, let me turn the call back to Dr. Yan Li for closing remarks.

Speaker #3: Thank you, operator, and thank you all 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.

Yan Li: Thank you, operator, and thank you all 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.

Speaker #3: Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

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