Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Niu Technologies Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Mr. Jason Yang, Investor Relations Manager of Niu Technologies. Mr. Yang, please go ahead.

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the second quarter 2020. The earnings press release, conference presentation and financial press release have been posted on Niu's investor relations website. This call is being webcast from the company's IR website 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 United States 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 the 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 the reconciliation of GAAP to non-GAAP financial results. On the call with me today are our CEO, Dr. Yan Li; and the CFO, Mr. Hardy Zhang. Now, let me turn the call over to Yan. Yan?

Thanks, Jason. And thanks everyone for joining us on the call today. We have observed a recovery in the China market in Q2, while in the overseas market our sales performance was still affected by COVID-19. Now, on performance in Q2, our total sales volume reached 160,000 units, an increase of 61% year-over-year. The sales volume in the China market reached to 155,000 units, an increase of 81% year-over-year, while international market reached 5,000 units, decreased by 52% due to the impact of COVID-19. Despite the decline in sales in the overseas market in Q2, we remain very, very positive about our performance in the second half as the market gradually recovers from the COVID-19 outbreak. Now, in Q2, we continue to build our leadership in urban mobility via new product rollout, branding and marketing activities, and then retail expansion. So, first of all, Q2 has been a very busy quarter for us in launching new products. As I mentioned in the previous earnings call, we launched our MQi2 on May 7, our flagship electric bicycle product for the China market in 2020 as an upgrade of our 2016 signature M1 model, with up to date technology and complying with China's new regulation. The product launch was held on Zhibo or online live streaming sales at Taobao platform and achieved a huge success with 3 million plus views and likes. Since then, M2 has been a key selling product in our electric bicycle category, representing 50.5% of our sales in Q2 and is positioned as our high-end electric bicycle product. We also introduced the MQiS, or MS model, on July 16. MS is slightly smaller compared with M2, but also inherited the family design style of M series using the same technology platform as the M2. We also applied our…

Thank you, Yan. And hello, everyone. 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 performance, keep in mind that we're referring to the second quarter figures unless I say otherwise and that all monetary figures are RMB unless otherwise noted. Our Q2 sales volume reached 160,000 units, increased by 61% year-over-year. China sales volume increased by 81% as a result of demand recovery, retail sales network expansion and new product launch. Our China online sales are particularly worth highlighting. Online sales continues to grow and accounted for 14% of total Q2 sales volume compared with the 2% at the same period last year. The key reason is that, this year, we launched new products such as M2 and G0 through online platforms. This helps to mitigate the restriction from COVID-19 for any big offline event, and also offered a good alternative for customers who are reluctant to go to offline stores. International sales volume decreased by 82% due to the adverse impacts from COVID-19. The lower international sales volume had a significant impact on our Q2 financials. For example, in Q2, we had a lower ASP, lower gross margin and also lower revenues from accessory spare parts. Many of the declines are caused by the lower international sales. We will discuss the impact in details later. We also encourage you to keep this in mind while analyzing our financials. Regarding product mix, as we launched new products, M2, G0 and G2 models in the second quarter, the product mix changed accordingly. N series accounted for around 20% of total volume. M series accounted for around 20%. U series accounted for 40% and Gova series accounted for remaining…

[Operator Instructions]. We have the first question from the line of Vincent Yu. Please go ahead.

Yan, Hardy and Jason, congrats on the robust performance and thanks for taking my question. I have three questions. First question is about the expansion of product category and the related volumes. So, in July, Niu sold close to 68,000 units in China. Can you share with us which models in particular have driven the strong growth, which is about 54%? Second question is about, can you share some comments on the cadence of the reopening of the international stores? And how should we think about the international unit sales for second half 2020? And third question is about how should we think about the China e-scooter ASP for second half 2020? Will we see a meaningful recovery? [Foreign Language]

Thanks, Vincent. Let me answer your first question. For -- the key drivers for the July sales volume growth, there's a few new products we launched in July. First is MS. MS is an electric bicycle category new product. It's very much welcomed by our customer. In July, MS contributed to around 10% of our sales volume total in the China market. And another key driver is the Gova series. We launched both G0 in second quarter. Also, we launched G2. Both of them are electric bicycle. They are also the key drivers for the July sales volume growth. So, it's mainly these three key new products driving the growth. For second question, I would like Yan to comment on.

I think for the international market, basically, I think we do have a pretty good expectation in terms of Q3 and Q4, partially because, one, all the stores are – all our stores are open so far in all the countries. So, it looks like it's back doing business. And the second, we do observe that, because of COVID-19 situation, that actually across the globe, people start to prefer, what do you call, individual urban mobility commuting device, which is basically our products, the electric mopeds and electric scooters falling under it. So, that was actually a good sign actually to drive sales. And lastly, I think we are also planning to roll out in the second half of this year – roll out our EUB, our first electric – power efficient electric bicycles or the e-bike under sort of the European categories as an e-bike. So, that product will be rolled out most likely in Q4 this year, and that will also help to drive a little bit sales in Q4 and actually also go over to the 2021. So, net to net, I think right now it's very positive. And we're also starting to see orders from sharing operators as well. We just recently actually got few orders from share operators really to expand their sharing operations in Europe. I think due to a similar basic phenomenon that we observe, they are a very similar phenomenon as due to the COVID-19 situation, people start using this individual commuting device, whether it's owned or shared. Last, and one more thing, we do --as we mentioned in the previous call actually, we rolled out a new rental program in July in Europe. And this program is actually through an app, the user can actually rent new scooter from participating dealers on a weekly basis, daily basis. And so far, we've had more than hundreds of dealers participate in this new rental program. And we think this actually will also help sort of to lower the, what you call, the entry barriers and give people even, what you call, a cheaper way to try out a new scooter first before making a purchase decision. So, those are all the few things that we're really working hard to get the international market back on track. Yeah, so that's for my question. For question three, on the ASP, I will let Hardy to answer that.

For the scooter ASP, let's first talk about the second quarter ASP. Overall, ASP declined by 25%. And as I mentioned, the 8.5% is because lower international sales. Since July, you see we have already seen a recovery of international market sales. In July, our international market sales grew by 66%. China market growth was around 64%. So, they are growing at a similar speed. Therefore, in Q3, also in the remaining of the year, we believe this 8.5% will not be there anymore. So, if you take this 8.5% off of this 25%, that gives you the remaining 17% that may last for the remaining of the year. But when we look at the ASP, we need to separate them into three categories. One is the China scooter ASP, second is overseas scooter ASP, and thirdly is accessory/spare parts ASP. For the overseas ASP, we believe it will continue to be strong. In the second quarter, our overseas scooter ASP increased by more than 20%. It's a very strong growth. For the remainder of the year, because of the order book, we believe our ASP will be at least the same as last year, or even have a slight growth. The China ASP, however, will decline because of the launch of Gova series. The G0 and G2, their price is lower than the M, U series. Also, the MS, newly launched product in July also had a lower ASP compared with M2 we launched in the second quarter. So, for China scooter, we are thinking anywhere between 15% to 18% ASP decrease in the third quarter. For the accessory spare parts, in this part, we have some uncertainties, mainly because of the overseas sharing operator, how much spare parts they order from us. Currently, for our Q3 forecast, we have been quite conservative in this part. So, in short, the ASPs for the overall products will decline for the second half this year, mainly because of the change in product mix. This is my answer to your third question.

The next question comes from the line of Bin Wang.

Question number one is about product gross margin. Actually, product gross margin quite stable. If possible, can you provide detail about the vehicle or scooter gross margin, and is that increase or decline? And second is about service. Second, if any one-off issue in the gross margin we can explain in the second quarter? Second one is that, you mentioned that raw material in the parts decline, batteries decline is the key driver for margin stabilization. Can you quantify how much were on the normal parts, how much were on the battery, et cetera. That's number one question. Number two is about share-based compensation. I actually found that this one is pretty big in the first half. You have mentioned that you actually offer more [indiscernible] in the second quarter this year. Can I assume this number will be similar in the future compared to 2019? How should we think about the share-based compensation? That's the second question. Third one is about the volume. You actually provided a very good July number. Can you provide guidance in the first two weeks of August? What's the driver for this high growth? [indiscernible] in China because COVID-19 concern. A lot of people actually started buying scooters to avoid public transportation and this is the key driver or e-travel will continue to be strong because China's COVID-19 seems good controlled, so which means the costs might be lower. Is there a reason why you have a second half, also third quarter only 30% to 45% growth which is below the 54% in the July? Do you expect growth to stagnate because the guidance is lower than the June number? Thank you.

Let me first answer your question on the gross margin. Definitely, our gross margin is relatively stable compared with Q1, also last year. The key driver is the cost savings. I think we can provide you further breakdown for the markets on different components. For our scooters, if you take out the logistic cost, the warranty, in the second quarter, gross margin is around 20.7%. Compared with last quarter, it increased by 2%. And if you compare with last year, this has increased by around 3%. So, this is the scooter gross margin. For the accessory and spare parts gross margins, it's around 48%. Still very similar to what we have in Q1, also in Q2 last year. It's relatively stable. So, the service gross margin this quarter is relatively low, only around 30% compared with the 70%, 80% in the previous quarters, mainly because in this quarter we have a service revenue coming from Volkswagen projects. You may recall we provide R&D service to Volkswagen for new products that they plan to launch next year. But because of the COVID-19, the project has to be suspended. Therefore, even though we have the same revenue, we have to incur additional costs, mainly for staff costs because we need to save the team for their projects. That's what dragged down our service revenue gross margin. So, this is margin by product line. And specifically, on the raw material, how much we save on that. So, if we compare with our Q2, raw material procurement costs with Q2 last year, our battery cell costs actually declined by around 10% and the battery pack and BMS also have a few percentage decline. Overall, the battery pack – the overall battery pack including both battery cell, BMS and the pack had a decline of…

I think for the August sales volume growth, we're looking at multiple factors here. The first factor will – which is actually the plus side is actually the back to school, right? So, with kids back to school, I think that will actually provide a positive catalyst to the market where we think we can actually – it will drive the volume growth. I think second is actually, I think, Bin, we just mentioned, you look at basically our guidance, which is actually the year-over-year growth in terms of the – I think we mentioned [indiscernible] the second quarter, no? The guidance on the third quarter.

Higher 30% Q4…

Yeah, actually higher than the second quarter. So, I think that's when we think the back to school will help out. Second is actually a lot of our new products, when you look at – as I mentioned, the G0, the G2, the G3, the MS, all those products basically with – first the G0 and G2 announced in mid-June, rest was actually in July, so if you think about those products, they will kick in – the effect of this new product will kick in practically in Q3 this year. So, typically, when we first announced the new product, usually, we have our own ramp up period and also a ticket roughly about a month or so for the market to fully start to assess the product and really ramp up the sales. So, I think those new products will help us in terms of drive up August sales. And lastly, I think with a phenomenon we observed, as I mentioned in the call, where with the G0, now we start seeing early sign of G2, where with G0 and G2, it actually also helps us to penetrate, what do you call, the lower tier cities in the market where used to be we don't have a perfect product for those markets. And that actually helped us. I think with our two expansions in Q3, those also will contribute in term of the Q3 growth.

Just to add to Yan's comment on August sales trends, in the first half of August, our sales, volume growth maintained at least the same speed as whatever we delivered in July. In the second half of August, we expect the volume growth will accelerate mainly because we started the new school opening promotion activities from Monday – from today. Normally, that will drive the volume for the – yeah, so that's the answer to your question on August sales volume growth.

Third quarter guidance of 30% to 45%, which is well below the 54% in July and August.

It's mainly because of the ASPs. That's right, because we launched the G0, G2, also MS, their ASP is lower than the average ASP. So, this will drive down the ASP. But volume will still be quite strong.

Okay. What about the COVID-19 impact? Because the end of the second quarter, the whole China, actually, volume increased by 45% because of COVID-19. So, to just see the COVID-19's impact or help will be less going forward because COVID-19 seems to be better controlled in Mainland China.

I didn't capture the full question, but hopefully I can answer it. I think basically now with the COVID-19 impact, we saw full impact in Q1, a little bit in Q2. But as of now, I think for China, we're back – effectively, I think – we're safe to say we're back to what you call the pre-COVID-19 market condition or even better because COVID-19 actually drives quite a lot of people to choose not to take public transportations and really start to move to electric bicycle product in China. So, I think in China market, we're actually in a better position, even in a better position than the pre COVID-19 situation. I think that was one of the reasons we keep – we're rolling out multiple new products in the last quarter and also in July and really try to take advantage of this and capture this market growth. I think similarly, I think in Q3, we expect to add more stores. Because of COVID-19, our Q1 store adds or store expansion was subpar because the many construction site – construction was shut down, so we were not able to open lot of stores. But now, we have quite a bit stores ready to be open in the backlog, which will happen in Q3. So, that will help on the China situation. Now, on the international situation, I think it's actually back to normal. But the only thing with the international situation is Q3 traditionally has been a slow quarter for international, especially in Europe where people take vacations. Still we expect actually to getting a faster growth in Europe in Q3 to really make up the gap with Q2. But having said that, keep in mind Q3, typically, there are people taking vacations in Europe. So, little bit sluggish in term of retail.

We have our next question from the line of Lei Wang.

This is Wang Lei speaking from CICC. So, first of all, congratulations on the strong sales despite of the impact from coronavirus. That's very inspiring for sure. Basically, I have three questions, some on financials and some other factors. The first question is about the ASP of the spare parts. This was around RMB 800 in the second quarter of 2019 and then dropped to RMB 500 in the third quarter and then increased to RMB 1,200 in the first quarter of 2020 even with the COVID-19 impact in China. So, what could be the driver that makes the key differences in spare parts ASP? That's the first question. And then, the second question is about the new regulations that we believe will redefine the two wheeler industry in China. So, it seems individual cities are having different law enforcement stress. For instance, in Beijing, it seems we have a more restrictive environment where Shanghai is not taking that regulation seriously for now. How do you view the enforcement in the following quarters? That's the second question. And then, the last question and the third question is about the impact on the sharing economy. So, looking forward, do we think the rising of the sharing economy will lead to negative impact to your sales in the future? Or will Niu become a key vehicle supplier for this industry? That's all my questions. Thanks.

Let me answer your first question about spare parts ASP. I think we need to first talk about the total revenue for accessory, spare parts and services. I think the revenue come from [indiscernible] China market. Secondly is the revenue coming from overseas markets. So, even though in the second quarter, our total revenue from this category reduced by 17%, but if you see that in the international market and also the China market, China market actually grew by 70%. Overseas markets declined by 70%. So, in China, if you calculate the average ASP per scooter, the ASP is actually quite stable. So, the decline or the fluctuation is mainly coming from the overseas market. So, the overseas market, the key driver for our revenue in this category is actual battery and some spare parts we sold to sharing operators in overseas markets, in both Europe, also in the US. This year, because of COVID-19 continue to affect US, continue to affect Europe, therefore, we have much less spare parts that goes to the overseas market. So, that's really the driver who contributes to the fluctuation of the ASP. We think this will continue for probably in the next one or two quarter and we hope next year to become more or less stable. That's my answer to the first question. I will Yan comment on the remaining two questions.

I think, Lei – I think on the regulations enforcement, I actually agree with you. We do observe different cities 2actually apply a different, what do you call – enforce it differently. Top cities – what we observe basically, like top 10 to 20 cities, actually top 20 cities, we're talking about Beijing, Shanghai, Hangzhou, Nanjing, even Wenzhou, those cities, and Hangzhou, those ones, and Fuzhou and Guangzhou, Shenzhen, those ones, actually, they enforce very strictly. And so, in those cities, actually, owning the electric bicycle products that are being sold. And those cities largely represent about – traditionally, in term of market size, they're roughly about 6 million units a year in term of market size, out of that 30 million units total market size annually. And then, after that 20 cities, I think we're still seeing a – cities still enforce the electric bicycle rules. And obviously, there are also cities that allow electric motorcycles, actually allow motorcycles, so that the products that didn't fall under the, what do you call, the electric bicycles are being sold as electric motorcycles. And little bit caveat on this is actually is more enforcement. First of all, regardless which cities, the enforcement is actually very strictly on manufacturers. Basically for the products that manufacturer provide, the product has to be either compliant with the electric bicycle or electric motorcycle. There couldn't be a different – a third category product, which is not combined with either regulations. So, from a manufacturing perspective, Niu, as any other manufacturer, the product we ship are in either electric bicycle, electric motorcycle, and they are being sold as electric bicycles or electric motorcycles. I think only the city that's a little bit loose on this are cities doesn't require people to get license plate on their electric bicycles or electric motorcycle. That's where the enforcement little bit loose. But I think I gave a really long for a short question here. But I think as time passes, you're going to see more and more cities going to enforce the rules. You know, for example, last year, we didn't see Suzhou, basically a third tier city, really enforce this. But this, Suzhou actually start offering – require people to get license plates on electric bicycles practically – basically April/May this year. So, you're going to see more and more cities actually will apply the policy. I think the reason it's slower because it requires quite a bit of administrative effort to establish what are called the license plate protocol, getting the local traffic management to set up post, get bicycles to get license plate registration. It takes time, but I think within a couple of years or so, you're going to [indiscernible] be enforced strictly.

[indiscernible] to lobby the central government, but also really to take some time to lobby the local governments, asking them to implement the implementation?

Actually, it doesn't require lobbying. It's really the local administrative government actually, what do you call, have the task force. So, basically, where they turn around to you, well, we need to do this, now do we have the task force ready. Suzhou didn't do it last year because they didn't feel like they have the task force ready to get – to come with, what do you call, the implementation of it. And this year, Suzhou is ready to join the club. So, you're going to see more cities. Lastly, on the shared operations, yes, we also observed quite some sharing – mostly, still on tier three or tier four or tier five cities. For example, I visit a city called Zhengzhou, so I see a lot of sharing – electrical bicycle sharing. There's one deployed by Hello, there's one deployed by Meituan, and they're electric bicycle sharing operators. We think that actually complements as part of solution for urban mobility. It has little impact to our business because all our products are in the mid end to high-end products. If you actually look at the bikes that sharing operators deploy, it's very simple. It doesn't even have, what do you call, a display. Minimum plastics. It simply just lets you get by. So, we think if there's massive of those being deployed in those cities, I think the market segment got hurt most probably on the low-end side.

I see. So, basically, it won't have impact to your future sales in those lower tier cities as you're having more advanced products.

We got those questions in 2016 and 2017 when the sharing bicycles hit its prime. Currently, the sharing of electric bicycles, sort of the operation, to me, basically allows them to run the longer distance. But other than that, it serves the right market, right?

We have the next question from the line of Alex Potter.

Two questions maybe on margins. First one, going back to gross margin, obviously, the cost control that you mentioned was really strong. I was wondering if you could elaborate specifically on why battery costs and why these components costs are coming down? Is this a function of just cost cuts from your suppliers? Is it because you now have more scale and you're able to negotiate better pricing? Like, what specifically is driving the cost declines? And is it sustainable? So, that's question number one. Question number two is on the mix of e-commerce. I know that, theoretically, at least, your e-commerce sale should be higher margin than your sort of traditional in-store retail sales. Was this driver of the gross margin outperformance in the quarter as well or how would you quantify the impact there on margins? Thanks.

For your first question on the gross margin, the way how we negotiate with our suppliers is that in the beginning of the year we agree on our volume and also agree on the price. And also, we agree on our volume based discounts. So, the more we purchase from them, the lower discount we can get from them. Of course, this is one of the key drivers why you see the large volume give us a lot of benefit for cost savings. Let me go back to the negotiation at the beginning of the year. In the beginning of the year, definitely, we need to have an expectation about the raw material for manufacture of battery cells, et cetera, et cetera. Based on that expectation, we negotiated with our suppliers. In China, because of the capacity build up for the EV segment, also because declining of some of the raw material costs, therefore, when we negotiated with our supplier in the very beginning of the year, we also negotiated quite aggressive target price for the various part of the components. So, in short, there's two key drivers. One key driver is the overall market, how we see the capacity in different components or how we see the cost of raw material devices for the year. Secondly, it really depends on the volume. Normally, the more volume we have, the lower it comes – the more discount we can receive from our suppliers. So, this is answer for your first question. For your second question, you're definitely right. The e-commerce gross margin normally should be higher than the sales through offline if we are talking about same product, same model. But in the second quarter, unfortunately, the e-commerce channel is not the key driver for the stable gross margin, mainly because when we launch new products online, we also give discounts on the new products. Therefore, in the second quarter, actually our e-commerce gross margin was lower than last year, mainly because of the discount we provided to end consumers. But on the other side, we are able to save on the sales and the marketing expenses. But going forward, if we can continue the faster growth on the e-commerce platform with stable price, no more discounts, then definitely e-commerce platform will be one of the key contributor for the market growth going forward. So, this is my answer to your second question.

Just to add on the margin part on the cost cut, so besides the scale, the annual negotiations, I think there's one more thing within the electric bicycle category that we actually – very, very interesting. Because there was, what do you call, a 55 kilogram of weight limitation, so there's quite a bit innovation in terms of lightweight materials. For example, if we reduce the chassis' weight by half a kilo, but at the same time, we're able to add that half kilo weight to the battery pack, it will allow us to use lower density batteries, but achieve the same battery capacity. And by doing so, we have observed in cases that we're actually able to save RMB 100 to RMB 200 on a per scooter basis. If you look at it on a scooter of RMB 4,000 or RMB 5000, this is basically 5% savings. So, this is actually due to – to figure out where – simply, it's a math question – what do you call, it's a math question where the total weight is restricted to 55 kilos. So, where should I reduce the weight and where should I increase the weight, and such that give me a lower cost product at the same performance. So, there are a few tricks or innovations we're also doing on that domain, which actually helps quite a bit as well.

We have our next question from the line of Xinchi Yin.

I have a couple of questions about the new products. So, we just noticed that Yadea is also releasing new products, the pedal assisted electric bikes. I was wondering what's your point of view about this niche market? And when exactly will your new product launch? And in your opinion, what size of this market will be in the future? And I have another question about the new brand Gova. Can you tell us what's the approximate gross profit margins of the Gova? Thanks.

So, Xinchi, actually quickly talk about the first, I assume you mentioned the power assisted bicycle, or what we call the paddle lite or ebike, basically [indiscernible] this product category. So., our product, we actually announced at CES this year in January. It's EUB-01. This product is targeted Europe and the United States market. The reason we targeted in Europe and the United States market because market size is huge. Basically, it's a 5 million units a year market, with average retail ASP of $2500. And that market has been doubled in the last three years and expected to be doubled again in the next three or four years. And for us, to get into that market is actually also very simple. It uses motor. The only thing it requires is the power assist sensors. But in term of design frame, we have all that capability internally. The only caveat with that product for Europe is the power assisted bicycle in Europe, there's anti-dumping policy from Europe against China, so that our product has to be locally manufactured in Europe. So, we actually are able to secure a local manufacturer partner in Europe and will help us to produce that product in Europe. This product got a little bit delayed this year because of the COVID-19 situation. Our team couldn't get to Europe. There have been a lot of on-site negotiation, checking the site, all that stuff. So, it got a little bit delayed. But, hopefully, we should be able to get this product out the door in second half and it will drive a huge future growth for the Europe and the United States market. This particular product, we don't think this product actually has a market in China, particularly because China, people actually – the power assisted bicycle is not as friendly as our electric bicycle products. So, consumers who actually prefer electric bicycle first over the power assisted ones where you actually require to pedal a bit before you actually have the power output. So, hopefully, that will answer the ebike market, power-assisted bike market. On the Gova brand, before I hand to Hardy on the gross margin, so we don't view Gova as a second brand. We still view Gova as the Gova series and a Niu brand. That will help to leverage our existing sales channel and also leverage our brand awareness. But on a gross margin, I'll let Hardy to answer your question there.

For Gova, we have a quite wide range of models from G0 to G2 with different packs. But it does give you a range, the gross margin for different products. And the Gova series, anywhere between 13% to 22% depending on which model, which packs we're talking about. So, this is answer to your second question.

Seeing no more questions in the queue, let me turn the call back to Mr. Li for closing remarks.

All right. Thank you, operator. And thank you all for participating on today's call and for your support. So, we'd really appreciate your interest. And we look forward to reporting to you again next quarter on our progress. Thank you. Operator?

Thank you. Thank you all again. That concludes the call. You may disconnect now. Thank you. Good day.