Niu Technologies (NIU) Q2 2021 Earnings Report, Transcript and Summary

Good day and thanks for standing by. Welcome to the Niu Technologies Second Quarter earnings release conference call. At this time, all participants are in a listen-only mode. And after the speakers' presentation, there'll be a question-and-answer session. [Operator Instructions] on your telephone, and please be advised that today's conference is being recorded. If you require any further assistance, [Operator instructions] I would now like to hand the conference over to your first speaker for today, Mr. Jason Yang. Thank you. Please go ahead, sir.

Thank you, Operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies' results for the Second Quarter, 2021. The earnings press release, corporate presentations, and financial spreadsheet have been [Indiscernible] on Niu's Investor Relations website. This call is being webcast from companies on our website and a replay of the call will be available soon. Please note this 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 extra results may be materially different from those expressed today. For more information regarding the risks factors, it's 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 [Indiscernible] hold discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and the recalculation of GAAP to non-GAAP financial results. On the call with me, today are our CEO, Dr. Yan Li, and the CFO are Hardy Zhang. Now let me turn the call over, Yan.

Thanks Jason, and thanks to everyone for joining us on the call today. In the Second Quarter, we'll continue to see strong growth in the China market as we continued our new product rollout and retail expansions. We also achieved decent growth in an international market despite the ongoing challenges of COVID-19 and global logistics. Our total sales volume reached nearly 253,000 units. an increase of 58% year-over-year. Sales in China reached $246,000 units, an increase of 59% year-over-year, while the volume in the international market reached nearly 7,000 units, or a 35% increase year-over-year. We are attributing our Q2 gross to the three key strategic exact executions. Our targeted retail expansions, the release of new products that appeal to wider customer graphics, and our targeted marketing campaigns and user-centric activities. Taking where we left up in Q1 in the second quarter of this year, we added another 450 new branded stores across China, reaching a total of 2,366 stores by June 30th. And also setting a record for the most stores we have ever opened in a single quarter. These nearly 2,400 stores were thorough as a strong base to drive sales growth in Q3. For the international market, despite the challenges of COVID-19, we continue to add 26 flagship and premium stores with our total flagship and premium stores number reaching 149 in addition to our Feldman plus dealers. Now, as we mentioned in our last quarterly update, we held our global product launch in early April where we introduced a larger assortment of China in the national vehicles. We're having some reports that most of those products are now in the market or about to ship in the coming weeks. We are very excited about the speed that we can take products from concept to the market, giving us more agility to meet the demands of the urban mobility market, both in China and upward. One of the key products from the April event is MQi2S. We begin the sales of our M2S just a few weeks ago in late July. The new M2S is the upgrade of M2, the flagship product under the new China National Standard for electric bicycles. The M2S is equipped with our latest IoT technologies, a color display with navigation that mirror your mobile phone, and the Okay go system with distance sensing and Keyless ignitions. And also our latest battery management system, new energy 7.0 which increased the dry range. We launched M2S with starting price of RMB5600, 5600 RMB up to 8000 RMB. The market response has been great especially in the top-tier cities where the M2S is the view as the most high-end electric bicycle product in the market. Now shifting our discussion to our huge popular GOA series. All GOA S and the GOA C Series have allowed us to expand our offerings for the mid-tier product categories, and the health us to quickly tap into an even larger total addressable market in China. So GOA S series carries a more masculine design style and features of new ego lights, which has been a hit with our new target demographics. As we mentioned in our last earnings call, [Indiscernible] JD.com presales record for urban mobility product and had a significant impact on our sales volume growth in Q2, accounting for 24% of our total sales and volume in the quarter ending June 30. The GOVA F2 has been a very popular product despite being launched in late May, the F2 accounts for 6% of our total sales volume in Q2. And we are also about to launch the GOVA F4 electric motorcycle product in the next few days. Price from RMB, 4,500 to 6,700. Now while the other product coming out of the April global launch was the GOVA C0. The C0 was specially designed for female customers with multiple macros and deserve flavored color choices and a wide variety of accessories. Taking into account the actual needs of women's daily commute, from appearance and configurations to performance. The C0 is encrypted with our Sky High, allowing the C0 to be connected to our new app. Just like our MMU Series vehicles. The C0 had two versions differentiated primarily by the writing range of 50-kilometer standard range at 70 kilometers extended range options. Affordably priced at RMB 3,400 and 3800 RMB. We also upgrade our GOA G3 vehicle in order to better meet the riding habit of users in China's second and third-tier market. The all-new G3 has been seeing a significant upgrade to performance, thanks to the update we made on the hot motor, the controllers, as well as the low resistant tires. The G3 now can get a 100 kilometer plus driving range on a single charge. Now, prior to those changes, the G3 accounted only for 5% of our total sales volume in Q2, but since our recent product update in July, the all-new G3 sales have quickly climbed to 16% of our total volume. The G3 is priced at RMB 3700 to 4,000 RMB. We're also quite excited about our KQI3 kick-scooters that were announced back in April. Just a few weeks ago, on July 13th, we launched our European and U.S. pre-sales for KQI3 on Indiegogo or an e-commerce platform. The KQI3 is our first product of more to come in the micro-mobility space, trying to tackle the last mile commute. Compared to the competition up being $700 price point. The KQI3 offers better performance, a more stable ride, and more color options. The KQI3 campaign, on Indiegogo, was fully funded in under five minutes and has raised over the U.S. $1 million-plus in sales in a little over three weeks with the support of more than 1,800 backers. As of today, the pre-sale volume for KQI3 has exceeded 2,000 units plus and the delivery will start in Q3. Additionally, the wholesale orders for the end of year retail holiday sales in the U.S. and Europe are already being produced. Now shifting gear a bit, the April global product launch helped us to kick off a new cycle of domestic and international communications. The launch event alone garnered more than 1,000 publications across hundreds of domestic international media outlets, firmly established our position as a global market leader [Indiscernible] mobility. Beyond traditional media, our team continued to accelerate our growth and engagement on social media platforms. In the Second Quarter of [Indiscernible], quiet showed channel tests attracted more than 34 million views, an increase of over 400% year-over-year. We believe. capitalizing on those channels not only broadened our exposures but more importantly, is being paid off in sales. Now, I also want to share some very exciting news. We are very proud to announce that the new scooter and Morpheus are responsible for powering 10 billion kilometers of itself traveling globally. In just a few short weeks, we'll cross the 10 billion kilometers threshold, and that we believe it is the important moment, not just for new but the entire 2-wheeled and the micro-mobility industry. This will be the first 10 billion kilometers ever recorded in the 2-wheeler industry history. The 10 billion kilometer milestone doesn't simply prove that each day more people choose Niu to make their daily commute. But it also shows more and more customers that pushing the boundaries, how and why they ride a Niu The milestone shows the aspiration of our new fans join us to redefine urban mobility and make life better. It represents the strength and vitality of our brand, and when people think of urban mobility, they will first think of Niu. Now to celebrate the 10 billion kilometer milestone with our new fans, we launched a variety of brand campaigns, partnering with China influencers and tap into targeted TV ads to promote the new lifestyle. This will all couple with the release of our new -- all-new limited edition NQi, 10 billion kilometer scooter, paying homage to the orange M1 that launched the brand in 2015. These activities are perfectly timed to amplify our brand messaging during the peak sales seasons of 2021, in China. But finally, I want to take a moment with some forward-looking state comments for Q3. We plan to keep our retail expansion momentum adding another 300 plus stores in Q3 despite the half-sale season. We have also ramped up our production capacity ND recently brought up Phase 2 of our factory online, increasing our annual compact into more than 2 million vehicles. And this will provide good support to the third quarter shipment. The increased compacity coming just in time for our back-to-school promotions running from August to September this year. Now, with the launch of new products, expansion of our sales channel, coupled with the assortment of peak season promotions, we are very excited about the weeks ahead in the China market. Now, for the international market, we're very excited about our successful launch of our KQi kick-scooters and believe it will contribute significantly to our sales growth in the years ahead. However, in the near term, our international market continues to be hindered by the COVID-19 situation in the European market and the shortage and the much higher shipping cost, which prevented us from supplying sufficient inventories for the retail sales in an international market. Now, I will turn the call over to Hardy to discuss our financial results. Hardy.

Thank you again. And hello everyone. Our price release contains all the figures and comparisons you need. We've also uploaded Excel format figures to our IR website for your reference. As I review our financial performance, we are referring to the second-quarter figures, unless stated otherwise. And that's all my three figures RMB unless otherwise noted. Our Q2 was sales ordering raised to 253,000 units representing a 58% in year-over-year growth. China sales volume increased by 59% mainly driven by the Niu product launch. The 2 new models, F0 and F2 started delivery rates in the second quarter. They contributed to 30% of our total sales volume, and are key drivers for the second quarter sales quota growth. International sales volume increased by 35%, slightly below our expectations. There are continued challenges from coordinating and international shipping. Both affected our sales and the delivery to the international markets. With regards to product mix, the N series accounted for 11% of total sales volume. M series accounted for 14%. U series accounted for 19%, and GOA series accounted for 56%. Out of the 56% from the GOA series, 30% was from the low price models, G0 and F0. remaining 26% was from other global models, with relatively higher retail prices. The overall product mix improved this quarter compared with Q1. Specifically, the percentage of sales volume from the low-priced models, C0, F0 reduced fact 38% in Q1 to 30% in Q2. They improve [Indiscernible] also last to a higher-end in this quarter compared with Q1. Total revenues increased by 47% to 945 million. Within the guidance, we'll provide the earlier the quality of revenues improved this quarter with better product mix. Decided to improve the east quarter product mix mentioned above. We also generated 130 million revenues from our [Indiscernible] services, representing a 98% year-over-year growth, and accounting for 14% of our total revenues. The strong sales mainly came in from battery pack sales to share new operators in the European market. Our ASP in Q2 declined by 7% year-over-year but improved by 2% quarter-over-quarter. Let's look at the details. For China market, this quarter ASP decreased about 9% year-over-year, mainly due to the sales of low price, the model C0 and F0, which account for 30% of total sales volume compared with the 14% in Q2 last year. However, when compared with Q1, the ASP increased by 10% due to a better product mix and also sales price increases. For the international market, the scooter ASP decreased by 25%. There are 3 key reasons. First, deprecation of the U.S. dollar against RMB affected ASP by around 8%. Second, the change in the way distributors placed orders. Many distributors chose to place separate orders for a scooter body and a battery pack, so as to save international shipping costs. As a result, battery-pack sales were booked into spare parts revenue instead of scooter revenue. This practice also happened in Q1 as we discussed in the last earning call and expect to continue in future quarters. The impact of this practice was around 14%. Third, change in product mix affect our national ASP by an [Indiscernible] of 3%. In summary, out of the 25% ASP decline, around 14% was caused by the way of separate ordering. Around 8% was caused by the depreciation of the U.S. dollar, and the remaining 3% was from a change in the product mix. Compare with Q1, our ASP for international markets increased by 6% due to a change in product mix. The ASP [Indiscernible] spare parts and services were 512 First Quarter, 25% increase compared with Q2 last year. Out of the 25% increase, 9% was due to the change in the way of placing orders we just talked about. The remaining 16% was due to strong sales of battery packs to sharing over years. The gross margin was 22.7%, 0.3 percentage points lower than this time last year [Indiscernible] due to three reasons. First, the higher percentage of sales from low margin models, G0, F0, reduced our margin by around 1.3%. Second, the highest spare parts sales to international markets improved our margins by around 1.7%. Third, the higher raw material costs from the commodity price increase, reduced our margin by around 0.7%. The raw material cost increase continued into Q3 but the good news is, since August, some of the cost of the key components, for example, battery pack began to decline. We may still see some cost pressure in the third quarter but from the fourth quarter, we expect the cost decline will benefit our margin. Our total openings expense, including share-based compensation, was 125 million, increased by 43 million or 53% year-over-year. The increase was mainly caused by higher sales and marketing expenses of over 11 million for branding and advertisement, higher depreciation expense of 9 million for new store openings, and 15 million for staff costs. As a percentage of revenues, our operating expense, excluding share-based compensation, was 13.20%, 0.5% higher than Q2 last year. Mainly due to higher depreciation from new store openings. In the month of May, we received a total 41 million government grant, out of which 21 million was booked into income statements in the Second Quarter. The remaining they'll be booked in the following quarter. Our net income was 92 million, a 62% increase year-over-year. The adjusted net income was 104 million and the adjusted net margin was 11%, 0.5% higher than the same period last year. We are pleased to deliver a profitable quarter with an improved net margin. Turning to our balance sheet and cash flow, we ended the quarter with RMB 1.2 billion in cash, term deposits, and short-term investment. Our operating cash flow was positive 287 million, much higher than our net income. Our Q2 capital expenditure was around 83 million, mainly relating to a capacity expansion of 21 million and new store up building of 52 million. Now, let's turn to guidance. We expect third-quarter revenues to be in the range of RMB 1.25 billion to 1.45 billion, an increase of 40% to 62% year-over-year. With that, let's now open the call for any questions that you may have for us. Operator, please go ahead.

Thank you. As a reminder, [Operator Instructions] and to withdraw your question, [Operator Instructions] and please stand by while we compile the Q&A roster. [Operator Instructions] First question is from the line of Vincent Yu of Needham & Company. Please go ahead, line is open.

Thank you for taking my question. I have three questions. The first question is with offline retail store expanding at a fast pace, the scooter sales volume in China is somewhat soft in second quarter. Any reason behind this discrepancy that management can shed some light on? My second question is, in terms of international shipping [Indiscernible] already shared the impact from international shipping on ASP in second-quarter sales results. Is there any other impact on our second sales results the management want to share, and will we continue to see such impact in the second half? My third question is about the guidance, so there's about RMB 200 million differences between our guidance top and the bottom. So, the band for Third Quarter is [Indiscernible] more. So, what is factored in this difference? Is that something to do with the [Indiscernible] community regulation, or any other reason. Thanks.

Again, Vincent. Thanks for the questions. So, I think let me make sure I got the first question clear. I think with the [Indiscernible] store expansions on Q2 versus Q1, you're saying that volume increase is incomparable with the expansion. I didn't fully get what your first question is about.

Yeah, softer than I think we expected because the offline retail store is expanding roughly faster pace. So, are we seeing at the stores need to be mature in roughly longer time or do we -- shall we see these stores mature in the third quarter or like in anything that you can share on that front?

But I think you hit the right point. I think typically when they open the store -- because you look at, it really depends on even though we say versus with Q1 than Q2 versus Q1, we add up 450 stores. But it actually depends on which month of store are open. So, usually with the new store opening, it would take it roughly about quarter or so to have the stores to get to sort of a right operating pace. So, I think that's where you actually start seeing as we have mentioned that the Q2 stores -- [Indiscernible] Q2 stores, they are actually a very strong basis for our Q3 gross, because the other stores opening in Q2, they started getting a bit attraction, and get into mature and its sort of fully operation that's where the Q3 up results will come in. And on the second [Indiscernible] international shipments, I mean -- I think to be honest, yes, we do observe a -- rather, we see an up stack in two things. One is the shortage of the international shipping containers. And second is actually even when you're able to book the containers, that per container cost used to be $6,000 and now it's actually ramped up as high as $18,000. So, it's actually 3x of what we observed in the past. And on per container basis, we used to be able to get roughly about 40 scooters per containers. So that's actually -- talk about -- it's almost about a $150 into my shipping cost. Now you instead of $150 that become $450 per unit shipping cost. I think this is actually the issue we have observed for the past two quarters. And where -- and those are issues because some are international orders. We have a backlog of almost 4,000 units we're not able to shift in Q2 because of lack of container, and because of there's a high shipping costs where our distributors or importers in Europe and US, sort of are patching our bedding, waiting for the shipping costs to decline a bit before to ship more. So, this is a part -- the obstacle we're facing right now, so I think the Company is looking for, one, working with the distributors and to see whether there's a possible way for us and together work with them to subsidize some of the shipping costs increases. And second, whether this will be reflected into the retail prices of our international product.

Yeah, and for your third question on the guidance, why did you have a wider band for the guidance. There's fewer factors when we consider giving you this kind of -- does it take a while to bring some kind of uncertainty is -- or upside or [Indiscernible] upside is whether the replacement demand will kick in already in September. For example, in Beijing, the Beijing local governmental already announced since October, November, the regulatory authority will start going on the street to check people's scooters, whether they are in compliance or not, whether they have replaced to the [Indiscernible] plate for their electric bicycles. So, we expect to some of the customers, we take the ultimate promotion in September to early replace their bicycles. If that's kicking quickly, that we're able to miss the higher-end of our guidelines. So, this is one of the biggest elements in -- why we're giving the guidelines. On top of that, of course, there is also a few other factors why the COVID-19 is that we see some rebound in China. Some of the street were closed because of the COVID, looks like in the next 1-2 weeks, some of the streets, some of the places may have relaxed their policy, allow people to come to the shops again. But again, this is some certainty

about COVID. Also, there's also uncertainty with the international shipping, whether we get sufficient capacity to ship all the backlog orders within the third quarter. So, there is few reasons behind why we're giving up wider range. This is in answer to your third question, Vincent.

Got it. Very clear. Thank you very much.

Thank you. Our next question is from the line of Bin Wang of Credit Suisse, please go ahead. Line is open.

Thank you. I've got three one. The first one is about -- can we -- about the generic performance in the first half August. What's the sales gross in terms of [Indiscernible] That's number one. Number two is about C0 margin. I noticed why it's much more expensive compared to [Indiscernible]. And what's the operating gross margin we can anticipate for C0 because maybe going to induce segment, very important driver for the future? And the last one is about a sector. Investors seems to be worried about a sector dimming, although you have a very decent gross, but our sector seems to be flat in the second quarter. So, what's the reason about flattish sector production, and what's your forecast for the second half of sector? Thank you.

So, I will comment first and then let me to add further comments. For your first question, I believe you asking about how we see the sales or the momentum in August. So far in the first 15 days, the orders are very strong. Very strong retail still as well as orders coming from our distributors because the August, the peak-season already started and also the flooding in [Indiscernible] they [Indiscernible], so we see more people coming back to street began to buy new scooters. So, in August, we do see very strong growth not only from our orders but also from the retailers [Indiscernible]. Your second question is about our gross margin for the C0. The margin is around the 15% versus similar to what we saw in G0 and [Indiscernible], but there's a ramping up of the production while we get more and more orders of the raw materials, we may see potential, the margin may go up to 20%, but in the short-term it's still around 15% similar to other products. Comments on the third question about the sector growth. What we saw in April based on the information from IT, the industry grew by around 29%. In May, the industry grew by -- almost flat. To combine April and May, the industry grow by around 18%. We're still waiting for June numbers they're coming out by the authority but we do believe the industry continue to have a double-digit growth in the second quarter. As you can see, we are growing our China sales volume by close to 60%. For the second half of this year, we do believe the market will continue to grow, but it depends on which location and which geography we are. I think some of the Tier 1, Tier 2 cities, especially where the new regulations and new standards was strictly enforced, we do believe the growth will continue very strong. For example, we talked about Beijing. Beijing will begin to check the scooter whether they are in supply or not. In this case, we do believe many customers will begin to replace their scooters. It also apply to other cities where the new regulation is strictly enforced. But in the lower-tier cities, where the new regulation was not strictly enforced, then because of the very high base last year, the growth rate may not be as fast as what we saw last year. For new technologies, around 70-80% of our steel volume is coming from the top 30 cities. They're many Tier 1, Tier 2 cities. So, we think we are a very good marketplace -- geography, in terms of geography. Therefore, we do believe our sales will or will continue to grow very fast in the second half, so this is comment to your third question on whether [Indiscernible].

I think Hardy covers pretty well on this one.

Can you quantify that in April, very well. We're very convinced in number. Thank you.

What do you mean, April numbers?

No, you -- August. You just mentioned August is very good. So, can you provide some quantifying very good in August?

Yeah. In August, we are looking to double our sales volume. In August we are doubled in our sales compared with the August last year. As a part of the reason is because some of the orders was not able to ship out in July because of the flooding. And also, because the hurricane in Shanghai. But even off that, we've seen very, very strong orders coming in August.

Okay, great. Thank you so much. Great.

Thank you. Our next question is from the line of Winnie Dong of Piper Sandler please go ahead the line is open.

Hi, thank you in advance for taking my question. I was wondering if you can comment on the gross margin trajectory, I know Hardy put a few puts and takes in the quarter. Do you see a way to push this metric back to the mid-20s? That's my first question. And then my second question is on the international markets. I think in previous times or during earnings calls, you guys have mentioned Southeast Asia as a key market. Can you please provide an update there? Is that still the case? What kind of momentums are you guys striving right now? Thanks

Yes. I think let me first comment on the gross margin. I think in Q4 [Indiscernible] in Q4, we do believe we have a high chance to get our margin back to middle 20's, but in Q3 we'll continue to see some of the cost of price share. First of all, our business has a similarity. If you look at the Q3 margin, each year Q3 margin is the lowest compared with Q2. If you look at the year 2019, 2020 numbers, that Q3 gross margin is around 2% below Q2 margin. So, they take a Q2 with 22.7% then we minus 2% then it's 20.7% And also because some of the procurement cost for raw materials is still very high in May, June, and also July. So, we will still have some burden in the Third Quarter to [Indiscernible] all inventories. To continue the data, since August, some of the raw material cost began to decline, especially the battery cost. [Indiscernible] battery costs we buy, their costs already down by more than 10% compared with the peak, the peak time. Therefore in -- that's why I think in Q3 we see some continued pressure only because of the inventory we bought earlier. But in Q4, if this trend to continue, we do believe we have a good chance to get back to maybe mid-20s in terms of gross margin. For the international market, also on the Southeast Asia market I'll let Yan to comment on.

I think, so as we talking the previous call, basically, I think you look at the first couple of quarters in this year, I think in the main focus through on the European and the US markets, and those probably still represent huge majority sales of our international markets. On the Southeast Asia n market, we'll continue to explore different options into [Indiscernible] Asian market. We start to open about 4 or 5 stores in Jakarta this year. And those actually -- and also, we start to grow-up two products, that's our M1[Indiscernible] G3 products for the Southeast Asian market this year. So far, the sales has been relative soft because the two products right now, still -- even the G3 products is still priced somewhere around $1,500 which is slightly more than what we hope d for under that market. So, I think there's two things we're looking at. One is the continued decline of the DTN batteries, especially RFT batteries costs that help us to -- really to drive the retail price down of the G3 product to somewhere around $1,300 to $1400. I think that's where we're going to see a tipping point among that market. So, I think we're looking at probably -- not in the Q4 this year, it will be some time next year where we actually able to see such a cost decline and able to pick up that sort of other sales in that market.

Great. Thank you so much.

Thank you. Next question is from the line of [Indiscernible] Chen of CICC, please go ahead. Your line is open.

Thank you for taking my question. [Indiscernible] So I have many serious questions. The first, I think that we can still, see? the year-on-year decline on U series and N series [Indiscernible]. And the GOVA series has been on the market fall, [Indiscernible] year. So previously, we see main focus in the future. The high-end markets, space, or penetration rate was price of -- above 35,000 RMB maybe can get to 15% to 20% in the [Indiscernible] market in the longer-term. So, have we adjusted our focus of the high-end market space? This is my first question. And second is that recently, I see that with the launch of any new products by our pure brands and also the expansion of our own stock to give you more competition managed risks that could on the single stock that was -- can we see some growth on the single-cell [Indiscernible]. And also last year, since First Quarter last year, we began to open more stores quickly at a higher speed, so how are they operating profitability of the new stores compared with the old stores. My last question is, for our new kick-scooters product. Also has been felt in the European and the market in [Indiscernible]. So, what is our future positioning of this new product business? Can we expect that the south to maybe reach 1 million, in maybe two to three years and to become a major driver of ourselves.

I'll try to cover the question one for and then I'll have Hardy to comment on the per store sales part. And I'll comment on that one. So, first one. I think my understanding, the question is about the focus on the high-end market. I think, if you look at the first half of the year, yes you can see -- if you look at most of our product rollout for the first half of the year, in the first two Qs are around the GOVA series, basically the S-Series C-Series, the uptick -- upgraded G Series. That doesn't mean that the Company has changed the focus. They, hey, we're started doing? [Indiscernible] products. No. Neglecting the high-end products. The [Indiscernible] called the products [Indiscernible] products, the new product rollouts being time framed. So, the M2S basically, we view as our -- basically the high -- the most high-end product into my electric bicycles product. That product just rolled out in mid Jul, and actually start to receiving quite a bit orders from the top-tier CDs. It's an upgrade of our M2 product last year. And then in Q4 this year we're actually also going to have a couple of really high-end motorcycle products rolled out for the China market as well as for the international market. So, it just happened to, in the first half of the year, we actually have more mid-end products that being front-loaded in the first half of the year. So, starting second half of the year, and also 2022 --, early 2022, you're going to expect -- we'll actually have more high-end product rollout for the electric bicycle as far as the electric motorcycle markets. So, this is really just a product rollout timing issue. On the fourth one, I think absolutely yes. So, if you look at our initial kick-scooter, especially, I think the questions about kick-scooters and the future expectation on kick-scooters. I think depends on what you look at the market reports. It's anywhere -- the kick-scooter -- the sales volume for the kick-scooter globally, is anywhere between 5 million units to 7 million units. Depending on where it would do factory in the kid’s ones or not the kids once. So, we're -- I do think that it's possible for us in the next few years to get to the 1 million units for the kick-scooters. If you look at our first KQI3, that's the kick-scooter that we did a launch on Indiegogo. It's basically a cross funding website, and we could be able to get more than 2,000 units orders. And keeping in mind that the people who ordered those kick-scooters, they didn't even see the product -- the real product. They only saw a picture of it. And also, the orders won't be delivered to them until -- literally until starting August or September. So, where they actually putting money in July and August. By so, that way for a couple of months for the product come in. So, with those things that we've still managed to actually to get more than 2,000 orders. So, it actually demonstrate our strong capability in the product design as well as the kick-scooter it is gaining attraction from our global users. And obviously having a single product line for kick-scooter would or wouldn't get out the 1 million units. So, I think our product pipeline, we actually have about 2 or 3 more product lines of products years in kick-scooter anywhere between from a cheaper product to a more expensive products to provide a wider range of kick-scooter product that will allow us to get to the 1 million units. I think that's what our -- near future target that we're setting ourselves on. Now, I'll have Hardy to talk about -- a little bit on the same-store sales and the stores.

Yeah. For the same-store sales separately. I think one the Company open stores very fast, that we would see the in-store-sales seems to decline, but we believe the tough road is a leading indicator. You really need to think about it kind of investment, how many you put today. In the future you're going to see it's a help a Company to, at least, to higher [Indiscernible] growth. I can give you a few example, few numbers. For example, if you go look at a Q2 2019, in Q2 2019 we opened around a 130 stores, and in Q2 this year, we opened around 450 stores, but if you covered the same-store sales they are the same. We didn't really see the fast growth of our stores, make our same-store sales lack competitive compared with what we delivered the day before. So, this is one number you can use as a reference. Secondly, as I mentioned, building new stores, they always have planned for the stores to mature. Therefore, it kind of leading [Indiscernible] to leading [Indiscernible] at what we think about what's the [Indiscernible] sales would I going to have in 6 months’ time, [Indiscernible] in 12 months’ time, therefore I need to prepare for that to open more and more stores. In year 2018, back in 2018, because we are very busy with listing in the U.S., we opened only along 300 stores in 2018 because of the full opening of stores in 2018 did not support our first closing in 2019. So that's another example you can think about. Short-term? fast-looking stores? will, in some way, make our same-stores [Indiscernible] not very good, but we do believe that's a very important investment we need to do if we're looking for long term growth for our Company. So this is one way if you look at the numbers. Secondly, the store is also a very important result if the location is very important to allow myself and the customers. We also take this opportunity in China to grab some of the very best location, therefore, can position ourselves, if it's a very good growth perspective in the future. Today, some of other competitor they also released their Second Quarter results. If you compared our results with their results you choose the difference. I think because we are willing to invest in the retail network expansion that's because we have more confidence to grow our sales volume in the next few quarters. So this is the comments to your question on the same-store sales

[Indiscernible] Thank you for all responses, yes.

Thank you. [Operator Instructions].

Okay.

There are no further questions. I'd like to had the conference back to the presenters. Please continue.

All right. Thank you, Operator, and thank you all for participating in today's call for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you.

Thank you. And this concludes today's conference call. Thank you for participating. You may now all disconnect.

Thank you.