Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Niu Technologies Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I'll 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 second quarter 2025. The earnings press release, corporate presentation and financial spreadsheets have been posted on our Investor Relations website. This call is being webcast from company's IR 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 provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions and other factors. The company's actual results may be materially different from those expressed today. Further information regarding the risk factors is included in company's public filings with the Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required by law. Our earnings press release and this call include discussion 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 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. So second quarter of 2025 marked another strong performance for us, building on solid momentum from Q1. So this quarter, our total sales volume reached 350,000 units, representing a 37% year- over-year increase. In the China market, the sales volume surged by 54% to 318,000 units, continuing the growth trend in Q1. The overseas market recorded a 31,000 units, a 35% year-over-year decline, mainly due to the impact of the U.S. tariff, coupled with intensifying competition in the European market for the micromobility segments, while in overseas market, our electric 2-wheelers continue to grow at 4x. However, we have seen positive signs on the structural improvements in our overseas operations, which I will elaborate on in the subsequent sections. Our revenue and gross margin also demonstrated a strong improvement this quarter. Revenue reached RMB 1.26 billion, a year-over- year growth of 35% -- 34%, while the gross margin stood at 20.1 percentage, up 3.1% year-over-year or 2.8 percentage quarter-over- quarter compared to Q1. As previously mentioned, this positive outcome is primarily driven by the product portfolio optimization and cost reduction achieved through product -- platformization of our products and components. We also achieved net profit of RMB 5.9 million, where we are still navigating the challenges on the profitability front, our disciplined execution and the focused strategy continue to position us well for both the revenue and profit growth. The performance of this quarter reaffirm our growth strategy from product development, technology innovation, expanded sales channels to brand management. Our teams have delivered strong results across all those fronts. I will now provide more details, starting with our progress in the China market. In China market, Q2 sales, as I mentioned, reached about 318,000 units, representing 54% year-over-year growth.…

Hi, everyone. Please note that our press release contains all the figures and comparisons you need, and we have also uploaded excel format figures to our IR website for your easy reference. As I review our financial results, I'm referring to the second quarter figures unless I say otherwise, and all monetary figures are in RMB, if not specified. As Yan just mentioned, our total sales volume for the second quarter was 350,000 units, up 37% compared to the same period of last year. 319,000 units were sold in China, while the remaining 31,000 units were sold overseas. Nearly 50% of our sales volume in China came from our top 3 models this quarter. The total revenue for the second quarter amounted to RMB 1.26 billion, an increase of RMB 315 million or nearly 34% compared to the same period of last year. China revenue were RMB 1.15 billion, accounting for 91% of total revenue. Of this, the scooter revenues were RMB 1.6 billion, a year-over-year increase of 45%, and this increase was mainly due to the increase in sales volume. China scooter ASP was RMB 3,316, down 5% year-over-year, but up 11% quarter-over-quarter. And this decline was primarily attributed to a shift in product mix. In last year's Q2, large-scale scooters like NXT, N-Play dominated our best sellers with average retail price exceeding RMB 5,000. In this year's Q2, however, the [ MT ] models, a more compact scooter emerged as the top seller, capturing over 1/5 of the total sales units at a retail price range of RMB 3,700 to RMB 4,600. And overseas revenue were RMB 110 million, representing 9% of total revenues. The scooter revenue, including electronic motorcycles and mopeds, kick-scooters and e-bikes amounted to RMB 103 million, down from RMB 130 million in the same…

[Operator Instructions] We will now take our first question from the line of Yating Chen from CICC.

This is Yating from CICC. Congratulations for your outstanding performance. And I have one question. I'd like to know the reasons of -- I'd like to know that what are the reasons for the increase of unit price and the gross profit margin in second quarter? And what's your outlook for the unit price and gross profit margin in the third quarter?

Okay. This is Fion. I'll take this question. Regarding to the overall blended ASP, the ASP improvement quarter-over-quarter is mainly due to the product mix improvement, especially in China scooters. Last quarter, our ASP is around RMB 3,000 in the domestic market just because we launched the 2 smaller or more compact scooters, MT and MMT, which the retail price range is through RMB 3,500 to RMB 4,800. So this will drag down the ASP last quarter. And this quarter, since we launched the upgraded version of the NXT 2025 version, the NLT and also the N-Play, which all the large-scale scooters and the upgraded version from our best sellers and the retail price exceeding RMB 5,000. So the blended product mix in China market rose up by those best sellers. And additionally, in the overseas market, this quarter, our e-motorcycles sales volume increased more than 3,000 units and our motorcycle ASP was around RMB 15,000, which includes the FOB models and also the DDP models. And this will improve the overseas blended ASP as well. As to the gross margin, actually, both on the cost reduction side and also the -- our ASP improvement brought up the overall China market gross margin. Actually, in this quarter, our domestic gross margin with the scooters and also the non-scooters altogether, the gross margin in the domestic market is more than 20. -- 21% overall. So this is a very optimistic and a very good figure for the past 6 quarters, and this also improved -- give us a better gross margin for the overall gross margin, for the total gross margin and for our business this quarter. hope this will answer your question.

And I have another question. I'd like to know about -- I'd like to know that how do you predict sales volume next year for the domestic electric 2-wheeled vehicles. Some investors are worried about that.

So this is Yan. So let me address this question. I think currently, we're still -- it's still really early to predict the sales for next year. I mean, I think one thing we're looking at is actually with this new -- as I mentioned, there is this new regulation that's going to be effective with 2 dates, right? One day is actually September 1, that's for the manufacturers, one day is December 1, that's for the retailers. So if you look at the entire market, there are speculations that maybe some of the demand from next year will shift to this year because of regulatory changes. But we're still being very cautious at this point to actually to observe the market. In terms of NIU, I think what we are doing right now is actually we're preparing -- we have a multiple line of products that the new series that will comply with the new standard, and also, we're modifying our existing series to comply with the new standard. At the same time, we continue to increase the number of retail stores. And those 2 actions will help us to really to drive the growth for next year regardless of market changes.

Our next question comes from the line of Kai Kang from CITIC.

This is Kai Kang from CITIC, and congratulation for this strong performance in the second quarter. And I also have 2 questions. And the first question is about the overseas market. So we know that in the last 2 years, we were under high pressure in overseas market, our performance was under pressure. So do we think we have working out of the rules or going out of the bottom and climbing up again due to our [ NIU ] driver on e-scooter and also our NIU direct selling channel in overseas market? So can we expect maybe a better, brighter future since the second half and to the next year in overseas market?

Right. So Kai, to address your question, I think the short answer is yes. We really -- we spent the last 2 years because the overseas market for electric 2-wheelers, the moped, Europe is actually one of our largest market. And we really spent the last 2 years building up the direct distributed models. It's very complex. It requires setting up our own operations from logistics to dealer financing. So we really spent last year to build on that. And then it really started to turn around basically second quarter this year. We look at our market share based on the registered vehicles because many of mopeds you sell in Germany, Italy, it require registration. We look at our market share in registered vehicles, we're actually number -- ranked #1 market share in Germany and Italy at this point with much faster growing rate than our competitors in those markets. So we actually expect continued growth trend basically in the electric 2- wheeler market overseas to hopefully to get back to the peak level which will be in 2020 or 2021.

And I have another question about the dealer network in China. So we know the last 1 year, the dealer network was the strong driver of our performance in the domestic Chinese E2W market that in revenue. So do we think we'll keep open more new stores at a very fast pace like this year, in the next year, that means maybe next year, our dealer network stores number in China will reach about maybe 6,000 or 7,000, maybe some speed like that?

So I think right now, we're at 4,300, right? And we're expecting to -- because this year, our total target was open about 1,000 stores or so. We have net adds. So we have net adds -- added about 589 -- 569 stores. So we're looking at another about 400 stores to be net added in Q3 and Q4. So let's say, we achieve that target, that will get us to the number of about 4,700 stores. I think if you look at our competitors in this market and with the same price range, I think at least the ceiling for us will be somewhere around 8,000 to 9,000 stores, and we still have a long way to go. So if you look at basically for the next 3 years, you should be looking at -- we continue to expand our stores. At the same time, as we are opening stores, our per store sales hasn't really been dropped. It actually, the per store sales also has a slightly increase like, I think it's more around like 7% to 8% per store sales. So with that, basically, that demonstrates that by opening the stores, we didn't dilute the sales per stores, and that actually shows sort of a trend for healthy growth or healthy channel expansion.

[Operator Instructions] We will now take our next question from the line of Michael Simmonds from GlobalView.

Yes. This is Michael speaking here. Congratulations to Li, congratulations, Ms. Fion, these very good results for Q2. I just you've been -- for the last few quarters, you've been posting some good volume sales growth, volume growth in the number of scooters, but revenue growth always fallen behind that. This last quarter, it seems to be catching up a bit. [ Ms. Fion ] from you, the comments you've just been making, it sounds as though in this next quarter where you're predicting 40% to 60% revenue sales growth. Do you think that this will be the first quarter where that's going to be actually ahead of the volume in scooters?

So Michael, sorry, I didn't fully get the question. So the question based on the volume growth will be similar in line with the revenue growth for Q3?

Well, yes, I mean, so far for a little while now, you've been achieving revenue growth that's been behind the volume growth in scooters. But from what you're saying on this call, it sounds though in your guidance of revenue growth of 40% to 60%, but actually this could be ahead of scooter growth -- volume scooter growth in this quarter. Is my assumption correct?

I think we -- so let me actually go back to my data here. If Fion has the data in front of her, she could be better to answer your question. My sense actually will be very similar because if you look at our -- basically, if you look at our Q3 [Technical Difficulty], the -- if I remember correctly, our ASP for China market for Q3 2024 is around actually RMB 3,000. It's actually significantly lower than Q2 2024 and compared with our Q2 2025, which is around RMB 3,300. So Q3 typically to be -- it's actually a low quarter for ASP because it's actually a top sell season for China. So a lot of the low-end scooters, even for us, will represent a higher percentage. So we're still halfway through [ Q4 actually ], if not halfway, about 40 days in Q3. So we're still actually don't have the full picture on what our ASP is. Currently, we roughly estimate that [ product net loan ] growth will be very similar in line.

Right. [Operator Instructions] I'm seeing no more questions in the queue. Let me turn the call back to Mr. Li for closing remarks.

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

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.