Sales and Distribution - The company sold a total of 709,802 units in 2023, including e-motorcycles, e-scooters, kick-scooters, and e-bikes, with 600,994 units sold in the China market and 108,808 units in international markets[289] - The company operates through 288 city partners with 2,856 franchised stores in 251 cities in China and 56 distributors in 54 countries overseas as of December 31, 2023[289] - Total e-scooter sales decreased by 19.9% from 1,037,914 units in 2021 to 831,593 units in 2022, and further decreased to 709,802 units in 2023[449] - Revenues from e-scooters accounted for 88.9% of net revenues in 2023, with domestic sales in China contributing 600,994 units and international markets contributing 108,808 units[445] - The F series e-scooter sales increased significantly from 79,747 units in 2022 to 209,554 units in 2023, representing 29.5% of total e-scooter sales[450] - The company operates 2,856 franchised stores in 251 cities in China through 288 city partners and has 56 distributors in 54 countries overseas as of December 31, 2023[445][454] - As of December 31, 2023, the company sold smart e-scooters through 56 distributors in 54 countries overseas, with international market revenues accounting for 14.7%, 18.5%, and 15.2% of total revenues in 2021, 2022, and 2023, respectively[455] - The company plans to expand its distribution network, launch new products tailored to local markets, and explore additional business opportunities in Europe, the U.S., and Southeast Asia[455] Product Portfolio and Innovation - The company's product portfolio includes two main lineups: electric motorcycles, mopeds, and bicycles (NQi, MQi, UQi, F series) and micro-mobility products (KQi kick-scooters and BQi e-bikes)[293] - The company's RQi series features high-performance electric motorcycles with advanced features such as removable batteries, front and rear cameras, and a 5kW mid-mounted motor[298] - The company's SQi series is positioned as its most high-end electric bicycle product in China, featuring aerospace magnesium alloy materials and a futuristic design[299] - The company's KQi series offers a range of electric kick-scooters, including the high-end KQi Air and entry-level KQi1 and KQi2 models[300] - The company's R&D expenses include payroll and related costs for employees, design and development expenses, and facility and equipment costs, with plans to continue innovation and expand the product portfolio[469] Financial Performance - The company raised approximately US55.2millioninnetproceedsfromitsinitialpublicofferingonNasdaqinOctober2018[288]−Revenuesfromaccessoriesandsparepartsaccountedfor7.5373.5 million) in 2023, primarily due to a 14.6% decrease in e-scooter sales volume[480] - E-scooter sales revenue decreased by 17.4% from RMB2,853.9 million in 2022 to RMB2,358.7 million (US332.2million)in2023[480]−Revenuespere−scooterdecreasedfromRMB3,810.3in2022toRMB3,735.9(US526.2) in 2023, mainly due to decreased sales of higher-priced e-motorcycles and e-mopeds in international markets[481] - Accessory and spare parts sales revenue decreased from RMB242.3 million in 2022 to RMB197.6 million (US27.8million)in2023,drivenbyreducedbatterypacksalesandlowere−motorcycleande−mopedsales[482]−ServicerevenuesincreasedfromRMB72.4millionin2022toRMB95.5million(US13.4 million) in 2023, attributed to growth in the user base[482] - Cost of revenues decreased by 16.7% from RMB2,498.9 million in 2022 to RMB2,081.0 million (US293.1million)in2023,inlinewiththedecreaseine−scootersalesvolume[483]−Costpere−scooterdecreasedfromRMB3,005.0in2022toRMB2,931.8(US412.9) in 2023, primarily due to lower freight costs for overseas sales[483] - Gross profit decreased to RMB570.7 million (US80.4million)in2023fromRMB669.7millionin2022,butgrossmarginincreasedfrom21.144.7 million) in 2023[478] - Net income (loss) worsened from a loss of RMB49.5 million in 2022 to a loss of RMB271.8 million (US38.3million)in2023[478]TechnologyandDataAnalytics−Thecompany′sNIUappsynchronizeswithsmarte−scootersandcollectsuserbehavioraldatatoenhancecustomerengagementandbrandloyalty[292]−NIUappconnectedwithapproximately2,704,500smarte−scooters,accumulating21.4billionkilometersofridingdistancedataasofDecember31,2023[314]−NIUcollects462typesofdatapointscovering72dimensions,includinghumidity,lighting,andtemperature,fromCloudECUandupto32sensorspere−scooter[314]−NIU′scloudsystemhandlesoveramillionpersistentconnectionsconcurrentlyandsupportsTB−leveldatabasequeries[315]−NIU′sproprietarybigdataplatform,NIUInspire,analyzesdatatoimproveproductperformance,firmwareupdates,andtargetedmarketing[316]−NIU′sCloudECUsupportsOTAupdates,enablinguserstobenefitfromperformanceimprovementsandfeatureenhancements[328]−NIU′sFieldOrientedControl(FOC)systemoptimizesmotorperformanceandpowerconsumptionusingreal−timedataanalytics[331]−NIU′sElectronicBrakingSystem(EBS)recycleskineticenergyandenhancesbrakingefficiency[332]−NIUisdevelopingadvancedsystems,includingactivesafetysystems,self−balancingsystems,andL2autonomousdrivingsystems[335]RegulatoryComplianceandLegal−ThecompanyhasobtainedChinaCompulsoryCertificationforallcurrentfor−saleproductsandaimstoobtaincertificationforfutureproducts[387]−ThecompanycomplieswiththeProductQualityLawofthePRC,ensuringnoproductionorsaleofcounterfeitproductsorfalseinformation[386]−ThecompanyadherestotheProductionSafetyLawofthePRC,maintainingsafetyfacilitiesandprocedurestoensureemployeeandpublicsafety[385]−ThecompanyhasnotinitiatedanyproductrecallsundertheInterimProvisionsontheAdministrationofRecallofConsumerGoods[388]−ThecompanyoperatesitswebsiteandappthroughBeijingNiudian,complyingwithforeigninvestmentregulationsintelecommunications[392]−ThecompanyissubjecttotheForeignTradeLawofthePRCandhasmadenecessaryfilingswithauthoritiesforimportandexportactivities[390]−Thecompanyisnotrestrictedorprohibitedunderthe2021NegativeListforforeigninvestmentinelectricbicycledesign,manufacture,andsale[391]−ThecompanymonitorsregulationsundertheNDRCOrder11forpotentialoverseasinvestmentsexceeding300 million[393] - The company is subject to foreign debt regulations, including the Interim Provisions on the Management of Foreign Debts and PBOC Circular 9[395] - The company complies with the Network Security Law of the PRC, ensuring data integrity, confidentiality, and availability[398] - The amended Counterespionage Law of China, effective July 1, 2023, links data security to national security, prohibiting unauthorized data provision and cyberattacks against specific authorities[399] - The Data Security Law, effective September 1, 2021, mandates data processors to establish a whole-process data security management system and imposes penalties for violations[402] - The Personal Information Protection Law, effective November 1, 2021, regulates personal information processing and requires consent for data collection and use[401] - Data processors handling over one million users' personal information must undergo cybersecurity review before listing abroad[404] - The Data Export Measures, effective September 1, 2022, require security assessments for exporting personal information exceeding certain thresholds[405] - The Standard Contract Measures, effective June 1, 2023, regulate outbound transfer of personal information through standard contracts[407] - Companies processing personal information in China must undergo regular compliance audits, as per the Measures for the Administration of Personal Information Protection Compliance Audits (for Public Comments)[409] - Cross-border data transfer exemptions include transfers for contract performance, HR management, emergencies, and non-sensitive data involving less than 100,000 people[412] - Mobile app information service providers must comply with the Administrative Provisions on Mobile Internet Applications Information Services, effective August 1, 2022[415] - The Telecommunications Regulations require value-added telecommunication service providers to obtain an ICP License before operations[414] Taxation and Financial Regulations - Mainland China employers are required to contribute to social insurance for employees, including basic pension, medical, unemployment, maternity, and injury insurance, as well as housing funds[423] - Mainland China residents must register with SAFE for offshore investment and financing through special purpose vehicles, with penalties for non-compliance including restrictions on profit distributions and capital contributions[424] - Mainland China residents participating in overseas stock incentive plans must register with SAFE and remit foreign exchange proceeds into mainland China bank accounts[425] - Foreign-invested enterprises in mainland China must allocate 10% of after-tax profits to statutory common reserves until reserves reach 50% of registered capital[426] - Mainland China resident enterprises are subject to a 25% enterprise income tax rate, while non-resident enterprises without mainland China branches pay a 10% tax rate on mainland China-sourced income[427] - Dividends to non-resident enterprises are subject to a 10% withholding tax, which may be reduced to 5% under certain tax treaties[428] - VAT rates for goods and services in mainland China were adjusted to 13% and 9% respectively, effective April 1, 2019[429] - Advanced manufacturing enterprises can claim an additional 5% input tax credit against tax payable[429] - The company's subsidiaries in mainland China, Jiangsu Xiaoniu and Beijing Niudian, enjoy a preferential income tax rate of 15% as High and New Technology Enterprises (HNTE) for the fiscal years 2021-2023 and 2022-2024, respectively[474] - The company's Hong Kong subsidiary, Niu Technologies Group Limited, is taxed at 8.25% on the first HK$2 million of profits and 16.5% on the remaining profits, with no provision for Hong Kong profits tax made in 2021, 2022, or 2023[473] Manufacturing and Operations - A new manufacturing facility in Changzhou, with a total building area of 123,500 square meters, was completed in August 2021 to meet increasing demand for e-scooters[441] - The company prepaid RMB39.4 million in 2020 and RMB2.0 million in 2019 to acquire land use rights for a 61,148 square meter plot in Changzhou, where the new facility was built[441] - The company's PRC legal counsel confirmed that the VIE structure and contractual arrangements comply with current PRC laws, but noted uncertainties regarding future regulatory interpretations[439][440] Customer Engagement and Loyalty - The company's NIU app provides services such as online repair requests, smart checks, service station locators, and NIU Cover insurance services[306] - The company's NIU Points loyalty program allows users to earn points through activities and redeem them for exclusive NIU badges, accessories, and coupons[308] - Over 75% of NIU users rode their e-scooters on a monthly basis in 2023[311] Warranty and After-Sales Services - NIU's battery packs feature a 24-month or 20,000-kilometer warranty, with some models offering a 36-month or 30,000-kilometer warranty[318] Corporate Structure and Agreements - Beijing Niudian's shareholders have pledged 100% equity interests to the company's WFOE to guarantee performance under contractual agreements[434] - The company's WFOE has exclusive rights to provide operational support and consulting services to Beijing Niudian, with service fees equal to 100% of net profits[436]
Niu(NIU)2024-04-24 10:04