Niu Technologies (NIU) CEO Yan Li on Q2 2022 Results - Earnings Call Transcript

Niu Technologies (NASDAQ:NIU) Q2 2022 Earnings Conference Call August 15, 2022 8:00 AM ET

Company Participants

Wendy Zhao - Investor Relations

Yan Li - Chief Executive Officer

Fion Zhou - Chief Financial Officer

Operator

Good day and thank you for standing by. Welcome to the Niu Technologies Second Quarter 2022 Earnings Release Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Wendy Zhao. Please go ahead.

Wendy Zhao

Thank you, operator. Hello, everyone. Welcome to today’s conference call to discuss Niu Technologies’ results for the second quarter 2022. The earnings press release, corporate presentation and financial spreadsheets have been posted on our Investor Relations website. This call is being webcast from company’s IR website as well and a replay of the call will be available soon. Please note today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. 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 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. Our earnings press release and this call include discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.

On the call with me today are our CEO, Dr. Yan Li; and CFO, Ms. Fion Zhou. Now let me turn the call over to Yan.

Yan Li

Thanks, Wendy and thanks everyone for joining us on the call today. In Q2 2022, we delivered a mixed result in the China and international markets. Total sales volume was down by 17.4% year-over-year. The total sales volume in an international market were up by impressive 200% year-over-year, reaching nearly 29,000 units, mainly driven by the growth in the new category of kick-scooters. However, the total sales volume in the China market was down by 26.7% year-over-year for China market was severely affected by the COVID-19 resurgence.

Now in the China market, COVID infection spiked starting in early April and affected throughout the entire quarter. The lockdown paused pretty much all business operations in cities like Shanghai and severely slowed down the most in others like Beijing. Niu’s sales are highly concentrated in the higher tier cities, which were impacted by the COVID most significantly as top-tier cities account for 35% to 55% of total sales in China market. In addition, the lockdown in Shanghai also caused months of delay in new product development, as our R&D center is based in Shanghai. This has impacted our sales performance in quarter two as well as in Q3 as quite a few key Niu products that are originally scheduled in Q2 were delayed to late August.