Good day, ladies and gentlemen. Thank you for standing by and welcome to the Niu Technologies First Quarter 2025 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 Ms. Kristal Li, Investor Relations Manager of Niu Technologies. Ms. Li, please go ahead.

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the first quarter 2025. The early press release, corporate presentation, and financial spreadsheet has been posted on our investor relations website. This call is being webcast from our company's IR site 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 result 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 included a discussion of certain non-GAAP financial measures. The press release contained 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. Fion Zhou. Now let me turn the call over to CEO Yan.

Thank you, Kristal. Hello, everyone. Thank you for joining us today. In the first quarter of 2025, we achieved a total sales volume of $203,000 units, marking a significant 57.4% year-over-year growth. Behind this strong performance was a 66% year-over-year increase in the sales volume in the China market and a 6.4% year-over-year growth in the overseas market. Total revenue for the first quarter reached to RMB682 million, reflecting a 35% increase compared with same period last year. The gross margin rebounded to 17.3% with 4.9% year-over-year increase, primarily driven by the [pump] (ph) cost reduction in product, platformization, component standardization and procurement cost improvement. The performance in Q1 2025 has set a tone for the rest of the year underlying our drive for high-volume and revenue growth, as well as the profitability improvement. Taking a closer look at our performance in China, sales volume reached to 183,000 units in this quarter. Our [overall] (ph) product portfolio strategy emphasized on technology innovation and expanding sales channels, as well as targeting marketing strategy were the key drivers to the strong domestic performance. In Q1 2025, we maintain our focus in our key product strategy of N, M, U, and F series. We enhanced our existing products through upgrading and refining our product portfolio, which led to optimize product mix and offer our customers even more enjoyable riding experience. Additionally, we step up our motorcycle offerings, introduce model like [NX, NL, and FX] (ph). The expansion diversify our electric motorcycle range and helps to broaden our sales channel. First, we successfully launched a comprehensive range of electric motorcycles, including the [NX, NL, and FX] (ph) series, spending price range from RMB4,000 plus to over RMB10,000. Each model features significant enhancement in functionality and smart technologies, aligning with our new performance and safety…

Thank you, Yan, and hello, everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded the Excel format figures to our IR website for your easy reference. As I review our financial results, I'm referring to the first quarter figures unless I say otherwise. And all monetary figures are in RMB, not specified. As Yan just mentioned, our total sales volume for the first quarter was 203,000 units, up 57% compared to the same period of last year. 183,000 units were sold in China, while the remaining 20,000 were sold overseas. The total revenue for the first quarter amounted to RMB682 million an increase of RMB177 million or 35% compared to the same period of last year. The China revenues were RMB608 million accounting for 89% of the total revenues. Of this, the scooter revenue were RMB546 million a year-over-year increase of 39%. And this increase was mainly due to the increase in sales volume and partially offset by a decrease in revenue per e-scooters. China scooters ASP was fell to nearly RMB3000. This decline in ASP was primarily attributed to a shift in product mix. The notable increase in sales volume of high end [lead-asset] (ph) models, as mentioned in the previous quarters last year, has led to a more concentrated retail price range from RMB3000 to RMB7000. And the overseas revenue was RMB74 million, representing 11% of the total revenue. The scooter revenues including electric motorcycles, mopeds, kick scooters and e-bikes amounted to RMB60 million up from RMB49 million in the same period of last year. And this growth was driven by stronger international demand for electric motorcycles and mopeds, which command higher retail price and the premium pricing of these products also contributed to a year-over-year increase…

Thank you. [Operator Instructions] We will take our first question. And the first question comes from the line of Kyle Wu from Citi Research. Please go ahead. Your line is open.

Thank you, operator. Hi. This is Kyle from Citi. Thanks for taking my questions. I have two questions. First is about the sales volume guidance. At the year beginning, we guide 2025 full year sales volume to be 30% to 50% year-on-year growth. Do we still maintain this volume guidance? Second is about the margin. What's our margin outlook for the upcoming quarters of this year? And also, do we still expect second quarter to see net profit turnaround? Thank you.

Let me take the first one. In terms of our guidance for the annual volume, we haven't reached we have not changed the guidance. I think we're on the path.

Okay. For the gross margin annually, actually last year, our overall gross margin was only 15.2% overall. And for sure, this year, the annual gross margin will be recovered from 15%. And for the second quarter this year, we still expected that we will get the profit from the net margin. So the NP is the positive expectation for us.

Okay. Thank you.

Thank you. [Operator Instructions] We will take our next question. And the next question comes from the from Yating Chen from CICC. Please go ahead. Your line is open.

Hello. I have one question. I have seen that the average selling price decreased quarter-over-quarter in Q1, but the gross profit margin improved significantly quarter-over-quarter. So, I'd like to know what is the main reason and what is the outlook for average selling price in subsequent quarters? This is my question. Thank you.

Okay. I'll take this question. Actually, in this quarter, the ASP, especially the China ASP dropped due to we launched the new models. From starting from last year, the launch date of our new models, especially the flagship models varies each year. For instance, the retail price of MT 2025 models, this is our -- this quarter's best seller. The price range from RMB -- nearly RMB4,000 to RMB5,000. Whereas last year, we launched the NXT in last Q1. This is our last year's top seller and the price between RMB6,000 to around RMB12,000. So the launching date of our new models actually varies our ASP each quarter. But this ASP will smooth if we're looking forward to the next to the following quarters, especially the [Any ASP] (ph), as we just explained to the market that the ASP will remain almost the same compared to last year or change a little bit within the single digital change. For the second quarter after this year, actually we expected the ASP, especially in the domestic market, will recover compared to the Q1 this year. But we will concentrate it. Actually, models retail price were concentrated in the range from RMB3,000 to RMB7,000. So the ASP will rebound from this quarter's RMB3,000 to around RMB3,000 RMB3,500 ASP in the domestic market. So this is our expectation in the quarter two ASP. And as to the gross margin recovered, as I just explained, that this quarter's gross margin recovered, especially from our domestic scooters cost reduction. Since last Q4, we see a dramatic gross margin drop down due to our light assets, motorcycles and moped in the domestic market contributed more than 40% of our sales volume, which are 3% to 5% gross margin lower than the same year in the recent [Y-o-Y] (ph). And we began to change the smart function platform and also the R&D platform and also the cost reduction from the raw material. And this quarter, we saw the benefit from the cost reduction in the domestic market. And in Q2, we think the gross margin will remain at this level, but will change a little bit due to the product mix in the domestic market. But we'll now go back to lower than 15% as last year showing the figures. This is the gross margin and ASP for this year's explanation.

Thank you very much. Those are all my questions.

Thank you. [Operator Instructions] We will take our next question. And the question comes from the line of Michael Simmons from [Global View FA] (ph). Please go ahead. Your line is open.

Thank you. Yes, it's Michael here, Michael Simmons. Hey, Dr. Li, perhaps I can just ask you a little bit about the balance sheet. I think it's the cash position is kind of come down a little bit. Given what you've just been talking about, and it sounds like the second quarter is looking quite good. How do you think the cash position the net cash position is going to look at the end of the year?

Well, actually, each year, the quarter one, the cash position is the lowest. Since it's the Chinese New Year, we need to clear up all the advance to the suppliers, the accounts payable and also the notes payable to the bank. So if you're looking back to 2024 and 2023 each year, the fourth quarter cash balance is the lowest during the whole year. But at the end of this 2025, actually we expected the cash position will grow up starting from quarter two since the peak season, both in the domestic market and the overseas market is coming. And we give a high speed sales volume increase aligned with the revenue increase. And this will brought us the operating cash flow inflow starting from quarter two. And we didn't expect a large CapEx for the furniture and equipment and also the stores opened. So overall, we think the cash position at the end of this year will be higher than the end of December '31 in 2024.

Great. Thank you.

Thank you. We will take our next question. Your next question comes from the line of [Zayan Wanyan from Seville Capital] (ph). Please go ahead. Your line is open.

Okay. This is Daniel from Seville Capital and I have only one question. It's regarding overseas business. Why as we know that why scooter revenue has been negatively impacted by tariffs? Electric motorcycle sales has strong growth. How should we interpret growth rate target for overseas operations under these circumstances? Thank you.

I think for the overseas growth rate, we remain, you know, to be we haven't really changed throughout our forecast for this year. I think even at the last quarter, we talked about the last year results, think in the forecast of this year, we know that our electric tool or the electric motorcycle market, the growth rate will be quite high because they start with actually, you know, last year when they did about 3,000 plus units of electric motorcycles. And then during our peak time, we actually did close to way above 20,000 units. So we look at, you know, that you know, the starting from 3,000 units last year, look at fast, really a hyper growth this year, looking at somewhere at least 5 times to 6 times growth on the electric motorcycle side. On the -- Q1, the quarter one, where you see a 3 times growth there. On the micro mobility, basically the kick scooters, so we -- the US tariff really started to impact us last year when our tariff actually increased to 25% on May 30 post May 31st, last year. So that already have the impact on our scooter business. So we actually start to relocating the manufacturing base from China to Southeast Asia to try to cope with that 25% tariff, where back then in Southeast Asia, it was the 0% tariff. So I mean this quarter, Q1 this year, you know, we see, you know basically, this tariff goes -- even the Southeast Asia tariff went up to 10%, but China's actually went up significantly. So we actually consciously made adjustments saying by holding off the sales for the US market. But you look at the entire year, I think the demand there with our Southeast Asia manufacturing base in place, also with how we negotiate the price increase with the key U.S. Retailers like Best Buy, Walmart, I think we should be able to see that business goes as normal as what we expected at the beginning of the year. But overall, I think our with the micro mobility both on the US, Europe, I think our key three footprint are US market -- well the entire North American market, basically US and Canada, and also the European market, as well as some of the subs, the Australian market, New Zealand market. We expect moderate growth, we don't expect that business grow at 2 times or something, we really expect simple double digit growth and with the key goal is actually a turnaround the profitability. I think if you look at this two international market segments with the electric motorcycle, I think it is a hyper growth with the high profitability contribution and on the kick scooter micro-mobility market, you really should expect this moderate growth, but with the key focus on turning around from a profit loss to a profitability business unit. Thank you.

Great. Thank you.

There seems to be no further questions. I would like to hand back for closing remarks.

Thank you, operator, and thank you all for participating on today's call and for your support. We appreciate your interest and looking forward to reporting to you again next quarter on our progress. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.