Niu Technologies Sponsored ADR Class A Stock

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Niu Technologies Second Quarter 2026 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 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 second quarter 2026. 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 a discussion of certain non-GAAP financial measures, and the press release contains a definition of non-GAAP financial measures and a 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.

Hello, everyone. Thank you for joining our second quarter 2026 results call. So in the second quarter of 2026, we continue to execute our core mandate of high-quality resilient growth while navigating a profound structural adjustment in the domestic 2-wheeler market and accelerating the strategic realignment of our international business. For Q2 2026, we achieved a total sales volume of 434,000 units, representing a robust year-over-year increase of 24%. So this expansion was propelled by the China sales reaching 400,000 units, up 26% year-over-year and overseas shipments scaled to 32,000 units, up 3.6% year-over-year, signaling a steady operation recovery in the international business.

Total revenue for the quarter reached RMB 1.44 billion, representing a year-over-year growth of 14.7%. Gross margin stood at 16%. This primary trajectory was driven by 3 main factors: first, the active promotional sales clearance and inventory write-off of our international micromobility business. Second, the structural product mix shift towards a higher volume electric motorcycles in China, which carries relatively lower margins compared to our historical premium e-bicycle segment. And third, ongoing cost pressure from elevated raw material prices. Crucially, those collective headwinds were partially offset by our ongoing components platformization and the commercial cost reduction initiatives.

Now I would like to provide more details on our performance and strategic execution across both China and international market. First, let's talk about China market. In Q2 2026, the China sales volume grew 26% year-over-year to 400,000 units. This strong volume growth was achieved against a challenging regulatory and macroeconomic backdrop. Now with the full enforcement of new national standard for electric bicycles coupled with broader consumer demand decline in the top-tier cities, the domestic 2-wheeler market is undergoing a significant structural transformation. Specifically, the premium E-bicycle segment, historically our strongest category experienced a meaningful industry-wide contraction with the first half decline estimate between 25% to 30%.

Concurrently, consumer demand has decisively expanded towards electric motorcycles, especially in lower-tier cities where the motorcycles are now banned, a category with lower average selling prices and the margin than the premium e-bicycles. We proactively reallocate our R&D and product resources in advance aggressively pivoting towards a high-growth electric motorcycle segment. The structural momentum of electric motorcycle business is now directly offsetting the pressure in the premium e-bicycles, establishing a strong foundation for our next growth phase.

Now first talk about the product portfolios. During the second quarter, our execution focused on decisive structural reengineering our product portfolios. In terms of electric motorcycles, the electric motorcycle category contributed approximately 60% of our China sales volume in Q2, serving as the primary growth engine of our domestic business. We continue to strategically concentrate resources here, building out a comprehensive product matrix across key consumer user cases. First, following the strong reception of Windstorm series, we expand aggressively with the N-Series, a high-performance model purposely built for delivery professionals and high-frequency cargo use.

Delivering 0 to 50-kilometer per hour acceleration in just 5.4 seconds and top speed of 70 kilometer per hour and support for mainstream battery swapping. It's priced at an accessible RMB 3,399, achieved a record-breaking online preorder of 32,000 units on its very first day. In April, we also launched an NX Marathon series to directly eliminate range anxiety and the charging constraint. Equipped with a high capacity 72-volt 50 amp hour battery, it delivers a verified full throttle range of 146 kilometers. In Q2 alone, the NX Marathon contributed 11% of our total domestic sales volume.

Now building on this momentum, we further expand the lineup in July with the NX 100 and NX 70 extending our price point coverage and solidifying our leadership in the family commuting segment. Now in terms of e-bicycle segment, we maintain a strong -- long-term commitment to market while systematically strengthening our product matrix under the new national standard. First, we enhanced our entry-level offerings led by the Y series to effectively broaden the consumer access. Second, we are actively in the process of reintroducing key models in the RMB 5,000 to RMB 7,000 price range, reestablishing our technological leadership in the premium e-bicycle space. Now while maintaining a prudent discipline during the current market condition, we're fully prepared to capitalize on market recovery when demand returns, leveraging our complete and diversified compliance portfolio.

Now second, let me talk about R&D and technology. The technology and continuous innovation remains core to Niu's long-term strategy. Following our March vision announcement to redefine mobility and enter the era of AI-powered 2-wheel electric vehicles, we moved decisively in Q2 alongside leading technology partners to convert hardcore AI capabilities into tangible mass market user experience. Core features, including the new AiOS, screen navigations, integrated triple camcorder system, AI Pets and AI voice interaction are now fully integrated across multiple mass production models.

Our user data confirm those features are being frequently used. For example, in terms of our screen navigations, it reached approximately 190,000 monthly active users. Now adding to those technology momentum, our new official awards for interface and user experience design. This marks the first time 2-wheeler operating system has received international recognition serving as a powerful global validation of our design and technological leadership.

Now let me talk about the brand and marketing. On the brand front, we continue to execute our strategy of brand-driven growth, deliberately expanding Niu's position from a niche top-tier urban geek brand towards a broader mass premium market. We're driving a full funnel brand awareness and mainstream consumer acquisition through a multi-touch point approaches. First, supported by our global celebrity ambassador large-scale brand campaigns, influencer content and user engagement programs. We're actively shifting brand perception from single brand recognition to a deeper consumer understanding and engagement.

Second, we sustained a target brand visibility investment across 37 key cities, occupying high-traffic touch points, including outdoor digital screens, major transit hubs, cinemas and the central commercial district generating over 5.9 billion total impressions. And last, we successfully launched a targeted offline community events such as Earth Day campaign that generated 250,000 exposures and also Shanghai Outdoor Exhibitions, which generated 3.25 million impressions. Now on the retail channel side, in light of broader market uncertainties, we focus on same-store sales increase and prioritize operational health and the profitability of retail ecosystem.

In terms of network footprint, by end of Q2, our store network stood at 4,570 stores nationwide with lower-tier cities account for 36% of our total footprint. Now by concentrating our resources on empowering existing retailers, the same-store sales surged by 24% year-over-year, driving a consecutive operational efficiency gains across our store network. And we'll focus on online channels. The online channel delivered a standout performance and Q2 online sales grew by 50% year-over-year and accounts for 64% of our total domestic retail sales.

Besides the traditional Tmall and JD.com, we also opened on Douyin powered by 9 official flagship accounts and 1,600 dealer-operated accounts. We executed 57,000 live streams and produced 90,000 short-form video clips in Q2 and generating over 720 million impressions. Now let me talk about the international business. In Q2 2026, the overseas sales reached 32,485 units, representing a 3.6% year-over-year growth. And this demonstrates our international business has steadily exited its structural adjustment phase to reenter the growth trajectory. Now first talk about the international electric motorcycle business. Our overseas electric motorcycle business maintained a powerful momentum, delivered 4,800 units in Q2, a substantial year-over-year increase of 50%. This performance directly validate efficacy of our direct-to-retailer strategy.

In terms of networks, our dealer network successfully expanded from 307 stores at the beginning of the year to 417 active locations by end of Q2. In terms of product mix, following the successful introduction of our high-performance models such as NQiX 500, NQiX 300, FX 200, the 125cc plus category has rapidly climbed to account for approximately 50% of our total European sales volume. So this premium mix optimization structurally lift the gross margin profiles and enabling our team to achieve a key milestone of local -- now in the emerging markets like Asia Pacific and other areas, we made steady progress through an asset-light profitability first approach. And we have made a first approach, for example, Algeria with sales over 1,000 units and Thailand with sales over 1,000 units. Now we'll maintain this disciplined asset-light expansion models, first validate the product market fit and local profitability, then selectively scale into additional high potential markets.

Now in our micromobility business internationally, Q2 marked a successful completion of smooth channel transition, bringing the terminal sales velocity firmly back on the growth path. While the wholesale shipment reached 27,000 units, the end-user retail activation, which truly measure the organic consumer demand exceeded 36,000 units, representing a 21% year-over-year growth in Q2. And this activation trend accelerated month-over-month. For example, it grew at 21% in May and 37% in June, proving our inventory clearance initiatives are working effectively. And our promotional strategy for legacy models yield a highly positive results in terms of channel clearing. As anticipated, those inventory clearance program created a short-term compression on our micromobility gross margin, but we view this as a necessary prudent and deliberate investment to restore a long-term operation path.

Now look ahead, the second quarter in 2026 served as a pivotal period for deliberate operation adjustment. In China, our momentum was anchored by the rapid acceleration of our electric motorcycle category, which successfully offset market-wide regulatory and macroeconomic headwinds in the electric bicycle segments. Now moving into Q3, we'll continue aggressively into the electric motorcycle growth momentum. We're expanding into new consumer segments by launching a female-focused product lines while systematically deepen our market penetration with our Windstorm and Milestone product families.

At the same time, while the broader market-wide recovery in electric bicycle depends on market conditions and consumer sentiment, we're taking proactive internal steps to structurally improve our revenue and ASP in the e-bike segment today. In Q3, we're reintroducing a refreshed lineup of mid- to high-end compliant e-bicycles targeting the RMB 5,000 to RMB 7,000 price range. By upgrading our product mix with premium features and advancing the integration of new AiOS and AI assisted riding features, we aim to lift our ASP and defend our margin profile while broader markets stabilize.

On the channel front, we'll continue to amplify our online traffic generation across social commerce platform, driving public domain traffic directly into our retail store network to support the sellout across all categories. Now in the international market, our core electric motorcycle business will maintain a steady structural growth and our direct-to-retail strategy, leveraging the higher 125cc plus model penetration to lift the regional margins.

Concurrently, our micromobility segment remains firmly on track with our distribution transition largely complete. The active promotion clearance in Q3 will bring the overseas inventory back towards a healthy normal baseline by the end of the year. So in summary, 2026 was an important year for structural transformation for Niu by capturing the volume growth in electric motorcycle, reestablishing our premium edge e-bicycle and advancing our AI ecosystem and normalizing our overseas inventory while building a more resilient operation base. We remain disciplined and realistic about the market condition and focused entirely on execution.

Now I'll turn over to our CFO, Fion Zhou to talk about the financials.

Thank you, Yan. Hello, 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 where you 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 over 434,000 units, up 24% compared to the same period of last year. 402,000 units were sold in China, while the remaining 32,000 was sold overseas.

Nearly 60% of our sales in China came from the top 5 best sellers. The total revenue for the second quarter amounted to RMB 1.44 billion, an increase of RMB 185 million or 15% compared to the same period of last year. China revenue were RMB 1.32 billion, accounting for 92% of total revenue. Of this, the scooter revenue were RMB 1.21 billion, a year-over-year increase of 15% and this growth was primarily driven by the higher sales volume, but partially offset by the decrease of revenue for e-scooters. China scooter ASP was RMB 3,010, down 9% year-over-year. And this decline in ASP was primarily attributable to a shift in the product mix with a higher proportion of the electronic motorcycles.

During this quarter, these models were primarily sold within a narrow retail price range of RMB 4,500 to RMB 7,000, including the models such as FX, NX Windstorm versions. And this kind of shift towards models within this price range resulted in a lower ASP compared with the same period of last year. Overseas revenue were RMB 116 million, representing 8% of the total revenue. Scooter revenue, including electronic motorcycle, mopeds, kick scooters and e-bikes amounted to RMB 106 million, slightly increased from RMB 103 million in the same period of last year. and this increase was driven by the higher sales volume.

The ASP of overseas scooters were RMB 3,270. Revenue from accessories, spare parts and services were RMB 124 million, a 29% increase compared to the same period of last year and mainly driven by the growth in new APP services and higher sales of accessory and spare parts in China market. The gross profit for this quarter was RMB 230 million, declined from RMB 252 million during the same period of last year. The gross margin was 16%, 4.1 ppts lower than the same period of last year, of which 2.5 ppt decrease driven by the change in the product mix and higher cost in China market and the rest of 1.6 ppts decrease due to the lower margin on overseas kick scooters.

In China market, as mentioned previously, the electronic motorcycles accounted for a greater share of the domestic sales, and these models carry lower gross margins compared with the e-bicycle models. And meanwhile, higher product costs across the upstream supply chain put additional pressure on the domestic gross margin. And internationally, the inventory clearance of the kick scooters resulted in a lower margin, which also contributed to the overall gross margin decline. The operating expenses for the second quarter were RMB 341 million, increased RMB 76 million or 29% compared to the same period of last year.

The OpEx ratio was 24%, up from 21% in the same period of last year, but down from 29% in the same -- in the last quarter. Selling and marketing expenses rose by RMB 36 million year-over-year to RMB 239 million, primarily driven by the increase of RMB 21.9 million in intensified marketing plan in the domestic market starting from the beginning of this year, including the e-commerce advertisement and branding. The RMB 12.2 million in depreciation and amortization expenses related to the new store expansion. Selling and marketing expenses accounted for 17% of revenue, up from 16% in the same period last year, but down from 20% in last quarter.

R&D expenses increased by RMB 8 million year-over-year to RMB 52 million, primarily due to an increase in design testing costs as well as the staff cost. R&D expenses represented 3.6% of revenue compared to 3.5% in the same period of last year and 4.5% in last quarter. G&A expenses increased by RMB 31 million year-over-year to RMB 51 million, primarily due to the foreign exchange losses related to the remeasurement of the foreign currency-dominated assets, mainly the accounts receivable. At the overall earnings level, the impact of the foreign exchange losses were partially offset by the interest income. G&A expenses represented 3.5% of revenue compared with 1.5% in the same period of last year, but down from 4.7% in the previous quarter.

Excluding the impact of foreign exchange losses, G&A expenses were RMB 32 million compared with RMB 44 million in the same period of last year. In the second quarter, we had a net loss of RMB 102 million with a net loss margin of 7.1% under the GAAP accounting compared to a net income of RMB 5.9 million with a net income margin of 0.5% for the same period of last year. And the non-GAAP net loss was RMB 98 million with a non-GAAP net loss margin of 6.8%. Turning to our balance sheet and cash flow. We ended the quarter with RMB 1.7 billion, increased RMB 36 million compared to the end of last year in cash, restricted cash, term deposits and short-term investments. Our operating cash was inflow amounted to RMB 392 million. The CapEx for the second quarter amounted to RMB 53 million, reflecting an increase of RMB 21 million compared to the same period of last year. And this can be primarily attributed to an increase in the opening of new stores and modules cost in China.

And now let's turn to guidance. We expect the third quarter revenue to be in the range of RMB 1.86 billion to RMB 2.03 billion, an increase of 10% to 20% year-over-year. And please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectations, which is subject to change due to uncertainties related to various factors.

And with that, we'll now open the call for any questions that you may have for us. Operator, please go ahead.

[Operator Instructions] Seeing no questions in the queue, let me turn the call back to Dr. Yan Li for closing remarks.

Thank you, operator, and thank you all for participating in 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. .

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

First in the electric motorcycle category, the segment surged by a second 3x year-over-year increase, including our momentum that begins in Q4 last year with our store product line. we further accelerate our growth in the electric motorcycle market, expanding our footprint directly into Tier 2 and Tier 3 cities. This is no longer just a temporary trend, is it these market breakthrough proving news ability to rapid scale and capture the minor 1 in this segment.

In the electric bicycle segment, the sales have softened. This was fully anticipated as the market remains a transitional winning period as the new center early in last December. We're managing this year deliberately by our new product line in a face approach, ensuring we're perfectly positioned to capture the high-quality volume as consumer demand returns. Now this shift has fundamentally redefined geographic footprint as well. Historically, new has been perceived as a Tier 1 CD brand with the market represents 50% of sales -- in Q1, we sold the Tier 1 new Tier 1 city soften where the Tier 2 and Tier 3 CD grow at a faster pace fueled by the rapid adoption of electric motorcycles. This represents a vastly strategic milestone, improves newsprint equity successfully scaling beyond the urban leads and penetrating the broader mass premium China market.

Now this chip has set a part of foundation for 2026 [indiscernible] by through the lower-tier motorcycle market, we have added a new growth engine. When the electric motorcycle market [indiscernible] recovers our total growth to rebound with double the force. We ensure were the first cap today recovery, we may deliver a strategic decision to fund load our investment in branding, R&D and the new product launched in Q1. Now in branding and marketing, recognizing 2026 is a pivotal year for our brands revolution. We made a proactive decision to follow our marketing investment in this quarter. We chose to capture the consumer mind share ahead of the curve by building a massive brand awareness in Q1. We have ensured that the new national standard transition stabilized news while positioned to capture unmet demand.

In Q1, we executed 3 major saturation initiatives. First, our 2 global ambassador strategy in late January, we officially announced [indiscernible] global brand ambassador, the first strategy of kind in our industry. [indiscernible] image as a high-performance outdoor enthusiastic resonant with our corporate users, while HMC significantly extend our reach among Gen DF female audiences. This campaign was activated across 40-plus cities and 80-plus global landmarks, generating an unprecedented $3.4 billion impression.

Second, our Spring Festival saturation campaign we capitalized on the highest frequency travel period in China, a large still offline campings 37 CDs, 42 transportation hubs and nearly 3,000 cinemas. This generated over 400 million impressions firmly embedded in message premium smart equate in the mind of travelers. Third, the 2026 technology launch event on March 17, we unveiled our next-generation AAM mobility strategy. This event was not just a product review but also repositioning you as a technology leader in the AI era. with over 130 million or less than 460 million pressures we have redefined what smart waters can be.

Now those intensive branding activities led to a 4x plus year-over-year increase in the marketing expense for Q1. So this was a onetime front loading of our budget. Historically, the first quarter has seen a lower marketing spend due to a seasonal retail trends harbor we choose to strategically shift our marketing was in Q1 this year to unite the brand momentum for the entire fiscal year. Now as we move into Q2 and beyond, you will see that our marketing to revenue ratio normalized. We have already established e-band equity part to drive our 2026 growth target, now we're transitioned directly from this investment phase to execution in the harvest space.

Now in terms of R&D technology, the technology and continuous innovation remains core to news long-term strategy as they are fundamental to our ability to compete are beyond simple pricing and basically hardware specifications. Our primary technology focus this year is to bring the top of AI to the electric two-wheeler industry, zeroing on 3 major development areas. The AI operating system, intelligent chassis system and intelligent writing technology. First on the news AIOS, March '17 event, the new AIOS is our cornerstone period defining the next era of intelligent writing as the industry's first mass-produced AI dashboard system, it represents technology milestones, integrating AI and voice assistant with high performance automotive [indiscernible] operating system.

The second is the intelligent chassis platform also introduced our next-generation intelligent case platform. This platform is engineered to integrate an advanced safety and performance system, including [indiscernible], TCS, content, stamping control, battery management system and license system into a single unified vehicle-level architecture. Based on this platform, we aim to introduce several industry-first features for mass-produced 2-wheelers, such as adaptive driving beam AI headlights and adopted CC suspension.

And the lastly to a strategic partnership with a leading automotive grade technology companies were bringing advanced rider system functionalities to the 2-wheeler segments. This includes integrating cutting-edge towers like advanced visual recognition systems and the high-performance processing tests. Now supported directly by those core technologies, we launched the industry's first AI-enabled electric bicycles NT2 Ultra as our flagship model.

Now talking about our product matrix. Our product strategy in Q1 was clear is driving an aggressive growth in the electric motorcycle segment while building a dominant portfolio for the electric bicycle recovery. First, to lead the electric bike transition, we launched next T2 Series price from RMB 599 to RMB 1,999. The flagship next to Ultra is the industry-first AI-powered e-bicycles, featuring our AIOS-channel, ABS and millimeter way grader. This isn't just a bike. It's a statement that news on the high-end market.

Second, we expand our total addressable market with the Y series, official enter the e-momobility segment with the wiser endorsed by our ambassador, Suniti at a competitive arm 300 to 400 price points. And third, next [indiscernible], our new volume engine to capitalize our 2x growth in electric motorcycle market -- we launched Max milestone at RMB 6,499. This model target a long-range family commuters offers a 146-kilometer driver in jet flagship features such as [indiscernible] at a mainstream price point. And the market expense was immediate. Wthin just 5 hours to launch a milestone generate over RMB 91 million in sales. ranking the #1 cross major e-commerce backlog. Those performance proved our hero product strategy is working in Q1.

Now we continued to strengthen both the off-line retail sales and online ecosystem operations. In terms of online channels, we delivered another standup quarter, the online sales increased by 53%, accounting for approximately 46% of domestic retail sales. demonstrating a continued strength of our online to offline operation model. Also on doing, we conduct more than 32,000 live streams, generating over 270 million impressions. We also continue to expand [indiscernible] further broaden our digital retail coverage. Now turning to our international operations. We're navigating a delivery structural transition to prioritize a healthy fundamentals.

Our high-margin electric motorcycle business remains a key strategic priority and is showing a strong momentum. Shipments reached more than 2,000 units and 29% year-over-year increase. Our European dealer network spending from 307 to 360 active locations this quarter. Now in the micro mobility segment, international sales was down 37% year-over-year. First, this is regarding the channel distribution structuring. During the first quarter, we completed a major structural shift to a leaner distribution model in our key markets like Germany and U.S. This critical action allows us to significantly minimize the ongoing China operation expenses. Consequently, Q1 servers transition phase where the major retail partners, such as [indiscernible] the United States and the medium market in Germany focused primarily on sale of their existing retail inventories. The fresh stock up period under the new distribution model is only in the beginning now in Q2.

Second, reflecting our current inventory position, we are holding an elevated volume of micromobility inventories in Europe and the United States, stemming from lower-than-anticipated sales in 2025. Our primary mandates for the remainder of 2026 is clear, is to accelerate unit sales volume and aggressively reduce the inventory backlog back to lean and healthy baseline. To execute this inventory clearance swiftly and protect against long-term operation drag, we're implementing targeted price promotions throughout the rest of the year, especially on motor model products.

So those efforts will depress our micro mobility contribution margins throughout the year. While this discounting strategy present a short-term headwind to our profitability metrics. It is necessary with our global macro mobility operation back to a clean optimized and highly stable foundation for the co- -- now looking ahead, we'll continue executing our strategy with a focus on sustainable and quality-driven growth. In China, we expect the electric vice market will recover gradually throughout Q2. And or taking a cautious view to lead this market. We're executing a phase-out rollout of our food compound product mix, anchored by the XT and Y series those position us with a comprehensive premium lineup ahead of the critical Junior ended Q3 selling season. Meanwhile, our electric motorcycle category will continue to be our primary growth engine. We have additional model targeting female writers and technology in [indiscernible] planned for Q2 and second half of the year. and the upcoming 618 shopping festival will be the first major retail test of those expanded portfolios. Now overseas our direct-to-retail strategy in the electric motorcycles is gaining speed. We [indiscernible] dealer count to surpass 400 locations by the year-end, supporting both volume growth and improved profitability.

In the micro mobility, as I detailed a moment ago, our [indiscernible] operational priority for the remainder of 2026 is to aggressive inventory normalization and maximizing retail sell-through. We expect our linear operating channel transition to finalize throughout the first half of this year with our broad and promotional clearance and inventory normalization largely concluded by the second half of 2022. So in summary, we had used the first quarter to do the heavy lifting required for a transformative year by frontloading our marketing, investing deeply in our AI technology map and diversifying our product portfolio and clean up our global channels, we have moved beyond the transition phase. We believe those strategic actions have laid a solid foundation to drive sustainable and high-quality growth in Q2, and will serve as a catalyst to accelerate both in the latter half of the year. We're confident in our past and focused on execution.

Now I'll turn over to our CFO, Wenjuan Zhou, to talk about the financials.

Thank you, Yan, and hello, everyone. Please note that our press release contains all the figures and comparisons -- 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 the fourth 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 first quarter was 262,000 units, up 29% compared to the same period of last year. 48,000 units were sold in China, while the remaining 14,000 units sold overseas. Over 60% of our sales volume in China came from the top 3 best sellers.

The total revenue for the first quarter amounted to RMB 910 million, an increase of RMB 228 million or 33% compared to the same period of last year. China revenue were RMB 854 million, accounting for 94% of the total revenue, of this, this quarter revenue was RMB 774 million, a year-over-year increase of 42%. And this growth was primarily driven by sales volume and improvement in the revenue per schoolers. China scooter ASP RMB 3,120 up nearly 5% year-over-year.

While the overseas revenue was RMB 56 million, representing a 6% of the total revenue, the scooter revenue, including electronic motorcycles, MoPath, [indiscernible] and e-bikes amounted to RMB 51 million, down from RMB 60 million in the same period of last year. And this decline was driven by the lower sales volume and reduced revenue per scooters, partially offset by a higher revenue per electronic motorcycle and mopeds, which command higher retail prices.

The sales volume in the international market shifted in favor of the electronic motorcycle and moped category. The premium pricing of these products further contributed to a year-over-year increase in the ASP of overseas scooters, which rose from RMB 2,962 to RMB 3,716. The revenue from accessories, spare parts and services were RMB 85 million, a 13% increase compared to the same period of last year. mainly driven by the higher revenue from new services. And the gross profit for this quarter exceeded RMB 159 million. marking a significant improvement compared to RMB 118 million during the same period of last year. The gross margin was 17.4% and higher compared to the same period of last year and 2.1 ppt higher than the previous quarter.

The Chinese domestic gross margin improved due to a favorable high-margin product mix, which boosted an overall gross margin by 2 ppt. However, these gains were offset by a 1.9 PBT drag from the lower scooters margin. The operating expenses for the first quarter were RMB 264 million increased RMB 99 million or 60% compared to the same period of last year. The OpEx ratio was 29% compared from the 24.2% in the same period of last year, but down from 30.5% in the last quarter. Selling and marketing expenses rose by RMB 65 million year-over-year to RMB 180 million. primarily driven by the intensified marketing initiatives in domestic market during the holiday season as well as a higher depreciation and amortization expenses and staff costs.

Selling and marketing expenses accounted for 19.8% of revenue, up from 16.8% in the same period of last year, but down from 21.3% in last quarter. R&D expenses increased by RMB 12 million year-over-year to RMB 41 million, primarily due to an increase in design and testing costs as well as the staff cost. The R&D expenses representing 4.5% of revenue compared to 4.4% in the same period of last year, but down from 7.3% in last quarter. G&A expenses increased by RMB 22 million year-over-year to RMB 42 million, largely driven by an increase from foreign currency exchange losses. The G&A expenses constitute 4.7% of revenue, up from 3% in the same period of last year and 1.8% in last quarter. Excluding the impact of foreign currency exchanges, the G&A expenses were RMB 23 million compared to RMB 30 million in the same period last year.

In the fourth quarter, we had a net loss of RMB 94 million with a net loss margin of 10.3% on the GAAP accounting. compared to a net loss of RMB 39 million with a net loss margin of 5.7% for the same period of last year. and the non-GAAP net loss was RMB 88 million with a non-GAAP net loss margin of 9.7%.

Turning to our balance sheet and cash flow. We ended this quarter with RMB 1.4 billion, remained flat compared to the end of last year in cash, restricted cash, term deposits and short-term investments. Our operating cash inflow amounted to RMB 131 million. CapEx for the first quarter amounted to RMB 70 million, reflecting an increase of RMB 46 million compared to the same period of last year. And this can be primarily attributed to an increase in opening of new stores and module cost in China.

And now let's turn to guidance. We expected the second quarter revenue in the range -- to be in the range of RMB 1.57 billion to RMB 1.82 billion, an increase of 25% to 45% year-over-year. Please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectations, which is subject to change due to uncertainties relating to various factors. And with that, let's now open the call for any questions that you may have for us.

Operator, please go ahead.

[Operator Instructions] Let me turn the call back to Mr. Li 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 look 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. Speakers, please stand by.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Niu Technologies Fourth 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 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 fourth 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 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 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 CFO, Ms. Fion Zhou. Now let me turn the call over to CEO, Yan.

Thank you, Kristal, and hello, everyone. Thank you for joining our fourth quarter 2025 result call.

2025 was a year of continued strategic transformation for Niu. We navigate a complex regulatory shift in China, executed a successful breakthrough in electric motorcycle segment and overhaul our international distribution for micro mobility, all while significantly expand our gross margins. While our fourth quarter volume reflects the temporary friction inherent in structural changes, the robust foundation we have built positions us perfectly for accelerated high-quality and profitable growth in 2026.

Now let's turn to the numbers. In the fourth quarter, we delivered 172,000 units, represents a 23.8% year-over-year decline. This comprised of 158,782 units in China, down 12% year-over-year, and close to 14,000 units overseas, down 68% year-over-year. I want to spend a minute to dive deep in both figures as they are direct results of a proactive strategic transition we outlined earlier this year.

First, regarding the China market. This decline was fully anticipated results of the transition to the new national standards for the electric bicycles. As we highlighted in our previous call, production of old standard models ceased on August 31, while the retail window closed on November 30. This led to a significant inventory front-loading by our distributors and retailers in Q3 2025. Naturally, this puts the sales forward, temporarily reducing our selling volumes for Q4. However, if we evaluate the second half of 2025 as a whole, our China deliveries actually grew 38% year-over-year, confirming that our continued growth momentum for the entire year.

Now turning to our overseas performance. The volume decline was deliberately driven by a strategic realignment of our micro mobility channels. In the key markets like the U.S. and Germany, we have transitioned away from a traditional distributor-led model in favor of direct-to-retailer partnerships. While this structure shift meant our formal distributors pause orders to clear legacy inventories, it is a necessary evolution. It allowed us to capture higher margins and establish a closer, more agile relationship with our customers.

Now zooming out to the full year 2025. The success of our broader strategy is clear. The total sales volume reached 1.19 million units, a robust of 29% year-on-year increase. This was fueled by exceptional performance in China, where sales surged 46% to surpass 1.11 million units. While our international volume of 80,000 units, a 51% decline, reflects a year of delivery channel restructuring, we successfully prioritized the long-term profitability over empty volume. The total revenue for the year reached RMB 4.31 billion, up 31% year-over-year. Most impressively, our full year gross margin reached 19.6%, expanding by a massive 4.4 percentage points year-over-year, reflecting our premium product mix and operational efficiencies.

Now let me dive deeper into the specific operation dynamics of our China and international markets. Let's first look at China operations. We concluded the fiscal year with the exceptional performance across the China market. Total domestic sales volume successfully surpassed 1 million milestone, reached 1.11 million units, representing a robust of 46.5% year-over-year increase. This was the direct result of our highly integrated domestic strategy.

Our momentum was propelled by 4 key pillars: one, the portfolio optimization, expanding into high-growth category like electric motorcycles, while maintaining our high-end market positions in electric bicycles. Second, technological leadership, sustained investment in cutting-edge smart riding innovation. Third, brand elevation, targeted campaigns that solidified our premium position, particularly among the Gen Z demographics. And the last, the channel expansion, aggressive scaling of retail network into the lower-tier cities. Together, those initiatives allowed us to capture significant market share and drive high volume growth in our home market.

Now first, in 2025, we further fortified our product foundation late in 2024. Our core [ NM ] U.S. matrix has become the backbone of our business, representing nearly all of total volume. The N Series continued to be our standout performers, delivering 43% of our total sales and successfully capturing every tier of the market.

Throughout 2025, our focus remains on [ hero-SKU ] development and rapid innovation. This disciplined approach where 9 major products now account for more than 70% of sales allowed us to either be faster and deploy our technology platform more effectively, resulting in a leaner and highly responsive product structure.

Perhaps the most defining structural evolution for Niu in 2025 was our breakthrough into the electric motorcycle segment, led by a phenomenal success of FX Windstorm. The e-motorcycle now represent more than 23% of our total annual sales. This achievement validates our diversification strategy, improves our unique capability to accelerate the Niu market categories.

The FX Windstorm has democratized high-end performance by integrating high-torque powertrains, strong durable [indiscernible] supporting a top speed of 80-kilometer per hour and the flagship technologies like do channel ABS and the millimeter wave radar into accessible RMB 4,000 to RMB 5,000 range. We created a matched competitive mode. As the first high-speed motorcycle for the Gen Z segment, its momentum surge to a remarkable of 42% of our total sales in the fourth quarter.

Beyond its appeal to young enthusiast, the windstorm spec defined by high to powertrain and durability served as our primary engine to break through the high-growth delivery segment. Recognizing that professional riders were underserved, we responded with a targeted multimodal ladder strategy. The FX Windstorm, with this robust frame and the high-performance motor, the FX was our first model to successfully penetrate the delivery market, proving our consumer tech could meet intensive commercial demand.

The NX Windstorm. In Q4, we launched the NX specifically for the delivery professional who requires higher capacity storage, build on our newly developed high durability frames, with the class leading 40 liters compartment. The NX contributed 10.5% to our Q4 volume in [indiscernible] quarter.

And lastly, the NX and FX Windstorm, the entry-level anchors. To complete our coverage, those entry-level anchors serves our high-value entry level performance offerings, allowing us to capture the budget-conscious professionals and daily commuters while maintaining a core windstorm DNA. This expansion, alongside with our premium daily commute specs, has built a highly resilient and diversified revenue base for electric motorcycle segments.

Now looking ahead to 2026, we'll continue to scale this leadership by developing a tailored e-motorcycle offerings, fulfillment riders and technology enthusiasts, accelerating our growth in the segment.

Now moving to our electric bicycle segment. The 2025 was a pivotal transition year as the industry prepared for the China's new national standard. Our strategy was twofold: maintaining our dominance in the premium tier while aggressively populating our pipeline with the next-generation compliant products.

Now to capture the high-end demand, we launched the NXT Ultra 2025 and FXT Ultra 2025. The NXT Ultra features the 10 major upgrades, with 77% core components redesigned to solidify its position as the premium market leaders. Meanwhile, FXT Ultra also add safety benchmarks such as [indiscernible] meter wave radars and do channel ABS. The market response was exceptional. We achieved over 20,000 units sold within the first 5 hours, generating more than RMB 220 million in sales, and ranking as a top-selling item across major e-commerce platform.

We also continue to iterate our key models. The MT, our best-selling urban commuter, now accounts for 20 -- more than 20% of our total annual sales. With a compact design, a vibrant style and [ OKG ] assist system. It has become particularly popular with our female demographics, proving our ability to design a specific lifestyle segments.

The [ U3 Pro ], we upgraded Gen Z [ spirit ] with a fine-tuned channel ABS, offering the perfect plan of a trend-driven design and high-performance safety.

Now to lead the transition to our new national standard, we strategically launched 2 key compliance series. The first one, the [ U1 One ] as our first new standard compliant bicycle. The [ U1 ] redefined urban style, priced between RMB [ 41 99 ] to RMB [ 46 99 ], it features the lightweight design and smart integration like TTS and [indiscernible] entry.

The K Series. Launch in late 2025, the K Series is a lifestyle-first platform. Starting on RMB [ 37 99 ], it features an innovative flat-type ring-arm skeleton frame for unmatched stability. With a 4.3 inch TFT display at match wheel smart features, it is a personalized mobility statement that drives the trend towards intelligent commuting.

Our full matrix of Niu standard products is progressing steadily, with a complete portfolio on track for a full rollout by Q2 2026. And in fact, we'll be showcasing a selection of those upcoming products at our launch event tomorrow.

Now beyond our product expansion, 2025 was also a year of rapid advancement in our core technology stack. Our R&D strategy focused on the 2 primary objectives: democratizing the intelligent technology and pioneering the next generation of system mobility.

In 2025, we successfully migrated high-end intelligent safety features previously exclusive to our flagship models done into our midrange entry level product. This includes a broader implementation of ABS braking system and radar technology, significantly raising the safety floor for the entire industry. Furthermore, we have introduced a suite of advanced smart functions across more product tiers, including full-screen navigation and our signature magic wheel interface, the do direction smart throttles and adaptive huge defense system. Those features ensure a broader demographic of Niu riders can enjoy a premium flagship level experience regardless of their price points.

At the high end of our R&D, we continue to push the boundary of what is possible in the 2-wheel industry. Looking ahead to 2026, our focus shift towards a collaborative and experienced intelligence. We are integrating scenario-based interactions and AI agent capabilities across our entire product ecosystem to create a more intuitive interaction between the rider and the machine. In fact, we're incredibly excited to announce that we'll be availing the industry's first AI-enabled smart scooter at our product launch event tomorrow, on March 17. We look forward to sharing more details during this event.

And finally, our product -- our platform-based R&D strategy continued to deliver a significant operational benefit throughout 2025. By really standardizing the core components and the chassis architecture, we have not only accelerated our product development cycles, but also improve the manufacturing consistency and the cost efficiency.

Now throughout 2025, we proactively leverage event-driven initiatives to expand our core user communities while making a targeted effort to solidify our position among the critical Gen Z demographics. Over the past year, we host more than 50 integrated brand activities, directly engaging over 0.5 million off-line participants and generate a 346 million total impressions. Those initiatives were strategically synchronized with our product launches to maximize impact.

Key highlights included a high-profile crossovers such, as partnering with popular titles like Game for Peace online gaming to resonate with the younger gamers. The performance validation, setting up a lab record for electric toolers at Shanghai [ S1 ] event, show in case our engineering power. Community milestones, our tenth anniversary play for festivals and dedicated outdoor scenario-based campaigns, ranging from high-teens to competitive cycling, which embedded the Niu brand deeply within the outdoor enthusiast community.

As we enter 2026, we are strategically pivoting back to the brand-driven growth. We initiated this shift with a high-profile announcement of our 2 global brand ambassadors, [indiscernible], Niu is the first in our industry to launch 2 global ambassadors simultaneously, perfectly embody our core value of performance, trends and use. This appointment ignites a media blitz that generated over 3.4 billion online impressions. We leveraged this momentum through a factory offline presence, activating landmark digital displays and dominating a high-speed real hubs across 35 cities, reaching an estimate of 500 million travelers.

Now this integrated brand campaign served a clear purpose, to really reinforce Niu's position as the leading premium electric mobility brand. By combining a massive digital reach with a physical presence, we are building the brand equity necessary to support our next phase of expansion.

Now in 2025, we continue to aggressively strengthen both our retail footprint and our digital ecosystem. Our nationwide store network has now surpassed 4,500 locations. Throughout this year, we added over 800 Niu stores, with a strategic focus on lower-tier cities. This delivery expansion is driving a deeper market coverage.

Our digital channels maintain exceptional momentum in 2025. The total online sales reached approximately 0.5 million units, supported by remarkable high online conversion rate of near 50%. This metric is a testament to the health of our consumer demand and seamless efficiency of our online to offline model, which successfully bridge the online purchase with the physical retail fulfillment.

Now with the social e-commerce, Douyin has solidified its position as our primary social e-commerce engine. Our ecosystem, they are powered by a [indiscernible] official flagship account and close to 1,000 dealer-operated accounts, generated over 95,000 live streams and 2.51 billion annual impressions. Having a perfected social e-commerce playbook, we plan to rapidly replicate the success model on [indiscernible] in 2026. We are also expanding our online coverage to [indiscernible] with 73 of our retail stores with [indiscernible] accounts, another mass online channel for broader reach.

Now moving to our international operation. While 2025 was a transition year for our overseas market, the underlying data reviews a significant structural improvement and a much healthier foundation for the year ahead. For the full year, overseas sales totaled 80,000 units, with close to 14,000 units delivered in the fourth quarter.

First, our performance in international electric motorcycle segment was a major highlight. In Q4, we have delivered more than 2,000 units, 187% year-over-year increase. For the full year, the sales unit surged to 9,600 units, up to a 227% increase compared with 2024. This success was directly driven by our direct-to-retailer model. By bypassing the traditional [indiscernible], we significantly expand our dealer networks from 120 to close to 300 by Q4, surpassing our initial expansion target and giving us a direct control of the brand experience and the pricing.

We also use 2025 to exceed our future growth. In ACMA 2025, we unveiled a strong global pipeline, including FQiX urban series, the NQiX 1000 high-performance motorcycle and XQi 500 off-road series. Those models will enter global markets through our DTR channels in 2026.

Furthermore, we pioneered new territories such as North Africa, marked by our successful commercial launch in Algeria with our first 900 units CKD shipment in June. With this operational foundation in place, we expect a continued rapid growth in the electric motorcycle segment throughout 2026.

Now in the micro mobility segment, we executed a planned transition to prioritize long-term health over short-term volume. Full year sales total of 70,000 units with a year-over-year decline, reflecting our strategic decision to restructure channels in the U.S. and Germany. We have successfully moved away from distributor having models in favor of our direct retail partnership. This transition allows us to capture higher margin, either greater control of our brands, and respond with much more agility to shifting retail trends.

Now the most critical indicator of brand health is on the retail end. We sold over 100,000 scooters activated on consumers this year. The fact that activation are significantly higher our sales in volume is definitely a sign of a robust consumer demand. With this new channel model, our priority is to finalize the inventory normalization and position this business for sustainable and profitable growth.

Now looking ahead, we see 2026 as a year defined by strategic acceleration across our entire diversified portfolio. Our groundwork in 2025 has set the stage for significant scale in both our domestic and international operations. In the China market in the electric bicycle segment, we expect the market to continue navigating a transitional phase through the Q1 of 2026 this year as the new standards are fully implemented. We anticipate consumer demand to remain measured in Q1, followed by a pronounced recovery as the regulatory framework stabilized and the supply chain adapts. To lead this recovery, we'll execute a phase rollout of our new standard product matrix, with a full compliant lineup on track for completion by Q2 2026.

Conversely, our electric motorcycle segment is poised for a major breakout, supported by an increasing favorable record environment and the powerful market validation of our Windstorm platform. We are strategically positioned to capture the accelerated growth in this category. With the expanded product portfolio to cover more consumer segments, we believe we have built the most resilient and comprehensive e-motorcycle lineup, capable of capturing market shares across both professional and the lifestyle segments.

Now turning into our international operations. We are transitioning from a period of restructuring to one of profitable scaling. In the electric motorcycle segments, we project a continued and disciplined expansion, fueled by our measured direct-to-retail network. By owning those dealer relationships directly, we are seeing a significant improvement in brand consistency and the service quality, which we expect to translate into higher volume growth.

In the micro mobility segment, our primary objective for 2026 remains the finalization of the inventory normalization by prioritizing house sell-through over our artificial selling volume and maintaining a lean, agile channel structure while establishing a sustainable baseline for the near future.

Now in summary, based on our current market visibility and momentum for our new product launches, we expect the total sales volume for the full year 2026 to reach between 1.67 million to 1.91 million units.

Now with that, let me turn the call to Fion.

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 Excel format figures to our IR website for your easy reference. As I review our financial results, I'm referring to the fourth 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 fourth quarter was 173,000 units, a decrease of 24% compared to the same period of last year. Specifically, China sales volume was 159,000 units accounted for 92% of total sales volume. And overseas volume were 14,000 units. For the full year 2025, total sales volume was nearly 1.2 million units, including 1.1 million units in China market and 80,000 units overseas. At the end of 2025, the number of franchise awards in China was 4,540.

Total revenue in the fourth quarter was RMB 676 million, down 17% compared to the same period of last year. To break down scooter revenues by ranging, the scooter revenues in China were RMB 545 million, down 16% year-over-year and accounted for 94% of total scooter revenues. The decrease was mainly due to the lower gross volume and revenue per scooter. China's scooter ASP was 3,431, down [ 3% ] year-over-year and up 5% sequentially, mainly driven by the changes in product mix, with the shift from models such as MP, NLP and NSP to FX, [ U1 ] and NX models.

Overseas scooter revenues, including electronic motorcycles, mopeds and e-scooters were RMB 36 million, representing 6% of total scooter revenues. Blended scooter ASP increased to 2,600, up 32% year-over-year, mainly driven by the greater sales mix contribution from electronic motorcycles, which command a higher retail prices.

Accessories, spare parts and services revenue were [ 95% ], up 11% year-over-year and accounted for 14% of total revenues. This increase was primarily driven by the higher revenue from new smart services as well as along accessory spare part sales in China market.

For the full year 2025, the total revenue increased by 31%, from RMB 3.3 billion last year to RMB 4.3 billion this year. And China's scooter revenue as a whole saw a nearly 42% year-over-year increase, from RMB 2.6 billion last year to RMB 3.6 billion this year, taking 93% of total scooter revenues. Overseas scooter revenue decreased by 33%, from RMB 397 million last year to RMB 267 million this year, taking 7% of total scooter revenues. The total overseas revenues, including scooters and non scooters, contributing to nearly 7% of the total revenues.

Let's take a look at ASP in 2025. The overall scooter ASP increased slightly from RMB 3,203 last year to RMB 3,269 this year. Among this, the China scooter ASP decreased slightly from RMB 3,377 last year to RMB 3,264 this year, primarily due to the changes in the product mix we mentioned in the previous quarters.

In 2024, large-scale scooters like NXP, MT and N-play dominating our best sellers, with the average retail price exceeding RMB 5,000, while the more compact model, MP scooters, with a retail price ranging from [ RMB 3,700 ] to RMB 4,600 emerged as the best seller in 2025. While in the meanwhile, the large scale scooter like NXP, NLP still maintain a strong sales momentum in 2025.

The overseas lending scooter ASP was RMB 3,330, nearly 40% increase year-over-year and driven by the greater proportion of revenue...

Please stand by while our speaker reconnects. Thank you for your patience. Please standby while our speaker reconnects. [Technical Difficulty]

Speakers, you may proceed. Thank you.

Hello. This is Fion. We are reconnecting. So we continue to buy the overseas blending scooter ASP. The overseas blending scooter ASP in 2025 was RMB 3,330, a nearly 40% increase year-over-year and driven by a greater proportion of revenue contribution from higher-priced electronic motorcycles and mopeds. The gross margin for the fourth quarter was 15.3%, up 2.9 ppt compared to the same period of last year. And the increase was primarily attributed to the continued margin improvement in the domestic market.

For the full year 2025, our gross margin was 19.6%, up from 15.2% in the previous year, representing a year-over-year increase of 4.4 ppt. And this increase was primarily driven by the China market, reflecting a strategic shift in the product mix towards the higher-margin scooters. For example, the MT, NXT, FXT and et cetera, along with our continued cost reduction in the domestic market. This was partially offset by a lower gross margin of kick scooters in international markets.

The fourth quarter OpEx was RMB 206 million, RMB 13 million higher than the same period of last year, and the OpEx ratio was 30.5% compared to 23.6% in the fourth quarter of 2024.

Selling and marketing expenses were RMB 144 million, RMB 8 million higher than the same period of last year, primarily due to the higher rental expenses in the international markets, along with the increased staff cost and higher depreciation and amortization expenses. These were partially offset by a decrease in advertising and promotion expenses in China market. Selling and marketing expenses accounted for 21.3% of revenue compared to 16.6% in the same period of last year and 12.7% last quarter.

Research and development expenses were nearly RMB 50 million, RMB 11 million higher than the same period of last year, mainly due to the higher staff costs, share-based compensation and increased design and testing expenses. Research and development expenses accounted for 7.3% of revenue compared to 4.7% in the same period last year and 2.6% last quarter.

General and administrative expenses were nearly RMB 13 million, around RMB 6 million lower than the same period of last year, mainly due to a decrease in taxes and surcharges, which were partially offset by an increase in foreign exchange losses. G&A expenses accounted for 1.8% of revenue and compared to 2.2% in the same period of last year and 2.3% last quarter.

For the full year 2025, the OpEx were RMB 933 million, 24% higher than last year, and OpEx ratio was nearly 21.7% compared to 22.8% last year. Selling and marketing expenses were RMB 676 million, RMB 186 million or 38% higher than last year, and about 15.7% of revenue compared to 14.9% in 2024. R&D expenses were RMB 166 million, RMB 36 million or 28% higher than last year, and about 3.9% of revenue compared to 4% in 2024. G&A expenses were RMB 91 million, RMB 40 million or 30% lower than last year and about 2.1 percentage of revenue compared to 4% in 2024.

Non-GAAP operating expenses were RMB 906 million accounted for 21% of revenues compared to 22.1% last year. In the fourth quarter, we had a net loss of RMB 88 million and a non-GAAP net loss of RMB 82 million. On a full year basis, we had a net loss of RMB 39 million and a non-GAAP net loss of RMB 12 million.

Turning to our balance sheet and cash flow. We ended the year with RMB 1.3 billion in cash, restricted cash, term deposit and short-term investments. On an annual basis, the operating inflow was around RMB 350 million, primarily reflecting the net income after adjusting for noncash items. Our fourth quarter CapEx was RMB 48 million. And for the full year 2025, the CapEx was RMB 178 million, RMB 58 million higher than last year because of the module cost and store expansion in the domestic market.

And now let's turn to guidance. We expect the first quarter revenue to be in the range of RMB 887 million to RMB 1,023 million, an increase of 30% to 50% year-over-year. And the sales volume for 2026 was expected in the range of 1.67 million to 1.91 million units, as Yan just mentioned. Please be aware that the sales book is based in -- based on the information available as of the date, and reflects the company's current and preliminary expectations, which is subject to change due to the uncertainty related to various factors.

And with that, we'll now open the call for any questions that you may have for us. Operator, please go ahead.

[Operator Instructions] We'll now go to our first question. Our first question comes from the line of Yating Chen from CICC.

Yan and Fion, this is Yating from CICC, and I have 2 quick questions. First, could you share the current inventory situation for your kick scooters in the overseas market? And how you are thinking about the kick scooter business in 2026?

Second, with the implementation of the new national standard for scooters in China, how should we think about the potential cost increase and the company's response?

Okay. This is Fion, I'll take the first question. Regarding to the inventory, actually, we already released the balance sheet figures in our earnings release, and the amount is around RMB 650 million for the whole inventory -- net inventory level. And I should say that more than 50% of our overall inventory are the aged kick scooters, which means more than RMB 300 million inventory are coming from the aged kick scooters. And that's why Yan just mentioned in the call is that in 2026, our top priority on the kick scooters is to improve the turnover of the aged inventory, especially the kick scooters, to change the business model into a more lean and straightforward and with our channel partners.

And on top of that, I think for the whole year 2026 for the kick scooters, we are we are going to focus on the inventory itself instead of the new models import. And so we are -- we expected to spend the whole year 2026 to improve the inventory clearance and also to change the channel into a more healthier business model to support our going-forward kick scooter business.

Yating, this is Yan. So to address your second question on the cost increase. So we have done a few things. First, I think with the new standard, because there are material changes, yes, there will be cost increase. We also have increased our retail price, not exactly proportionately, but have increased our price to cover partial of the cost increase.

Second, we are also, through our cost reduction initiatives, really through engineering to figure out what are the -- really the cost out initiatives to be implemented on each of the scooters basically through a platform standardization and also commoditize some of the common parts. That will help us to actually to reduce the bond cost. So by doing so, I think we're in very good hands to sort of handle the cost increase with the new standard.

There are no further questions at this time. So I'll hand the call back to Dr. Yan Li for closing remarks.

All 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.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Niu Technologies Third 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 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 third 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 the company's public filing with the Securities and Exchange Commission. The company does not assume any obligation and 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 and a definition of non-GAAP financial measures and the repudiation of GAAP to non-GAAP financial results.

On the call with me today are our CEO, Dr. Yan Li; and CFO, Ms. Wenjuan Zhou. Now let me turn the call over to CEO, Yan.

Thank you, Kristal. Hello, everyone. Thank you for joining us today. In Q3, we delivered solid and sustained progress across all key strategic priorities supported by disciplined execution in product innovation, channel expansion and the brand elevation. Our results reflect the continued growth of our core China business and early since transition in our overseas operations. laying a strong foundation for the next phase of growth. For the third quarter of 2025, the total sales volume reached 465,000 units, representing a strong 49.1% year-over-year increase. This growth was driven primarily by exceptional performance in China, where sales rose to 451,000 units, up 74% year-over-year, supported by our strength in the product portfolio and effective channel expansion.

Overseas volume reached 14,000 units declining year-over-year mainly due to weakness in micro mobility sector. Our total revenue grew 65% year-over-year to RMB 1.69 billion, accompanied by a gross margin expansion to 21.8%, up 8.0 percentage points from the prior year. or 1.7 percentage points accretion. This improvement was driven by a favorable shift in the China product mix with increased contribution from higher-value models. Notably, sales of models priced above RMB 8,000 accounted for over 10% of China sales. Net profit for the quarter was RMB 81.69 million excluding the profitability momentum we established in Q2.

This improvement reflects scale efficiencies from higher volumes and our continued focus on operational excellence. Those results underscore our ability to execute with discipline and resilience amid evolving market dynamics. We remain confident in our long-term strategy and migrate achieved this quarter provides a strong foundation for sustainable growth. China remains our primary growth engine in Q3, with unit sales rising 74% year-over-year to 451,000 units. A key driver was the China inventory buildup ahead of the implementation of the new national standard for electric bicycles which provides a substantial short-term boost. This performance was also supported by successful product launches, strong brand-driven demand and steady channel expansion.

The momentum builds through 2024 and into 2025 reflects our refined strategy. It has competitiveness and growing consumer preference for you. In Q3, the China electric bicycle market entered a critical transition phase and is the new national standard while production of noncompliant models ceased after August 31, and retail sales of existing inventories are permitted until November 30, 2025. This prompt the distributors and retailers to build inventories in July and August effectively pulling forward demand from October and November and created a temporary sales force in Q3.

Now to prepare for this regulatory shift, we emphasize on 3 actions upgrading the existing high-end electric bicycle models to capture the short-term demand, building on the new electric motorcycles unaffected by this regulation to target lower-tier cities and redesigning and returning our entire electric bicycle lineup to fully comply with the new standards for the Q4 2025 and Q1 2026.

First, to Carter's premium electric bicycle demand search under the old standard, we launched the upgraded flagship models next Auto 2025 and FXT auto 2025 version, each priced at RMB 11,900. Next the auto 2025 introduced 10 major upgrades with 77% of core complements redesigned to elevate benchmark standards across power intelligence. The FX, the auto 2025 featured a futurist performance-driven designs on the staining technology platform as the MXT ultra equipped with automotive-grade and millimeter wave radar and do channel ABS, that is a new benchmark for the segment. Together, those auto models contributed 8% of total Q3 sales, effectively serving high-end demand during this regulatory foundation.

Like motorcycles are more prevalent in the lower tier cities, Tier 3 and below due to a more relaxed regulations. This segment has history underserving our portfolio in the China footprint making it a key growth priority for us. As highlighted in the previous earnings call, expanding presence in the lower-tier cities is the core strategy reflected in our store expansion strengthen product line. In Q2, we completed a full N-Series motorcycle portfolio covering mainstream price points from entry level 3,000 bond at RMB 4,000 and RMB 6,000 to the performance oriented had just under RMB 10 starting Q3, we extended the strategy to F-Series broaden the price band and enhance the performance to value offers.

Now despite Q3 being a channel stocking period focused on electric bicycles are intense motorcycle portfolio supported a healthy 14% revenue contribution from motorcycle sales. We expect this year to increase in the coming quarters. A key milestone in Q3 was a successful launch of FX windstorm version on September 28. Known for sharp distinctive styling that resonates strongly with GMV writers. The FX wind storm reinforced actors positioning at the performance powerhouse. Priced at RMB 4,799 a target RMB 4,000 segments at its high first high-speed motorcycle for the young riders, equipped with 3,000 mass motor reinforced framed by the full-size FT display and 4% debates, a delivered performance comparable to model price above RMB 10,000 and including 80-mile 80-kilometer power top speed and 0 to 50-kilometer power in 4.7 seconds.

The FX will strong was an instant success with 14,000 units sold in the first 5 hours and January RMB 68 million in GMV and runs #1 nonpoint.com and using and popularity. This success validates our strategic expansion into the electric motorcycles and create strong momentum for upcoming launches such as FS targeting the entry-level users.

Now alongside the high-end electric bicycle motorcycles, we dedicated significant R&D resources to the new standard compliant electric bicycles. -- the updated regulations require substantial redesign from the limited usage of plastics to form factors. We're now planning a full rollout of compliant products between late November and extending through Q1 2026. The portfolio will include the renewed and new series offerings and also introduce new series designed to reach further consumer segments, including products optimized for female writers.

Beyond the new product development, we continue to invest in core technologies, including the smart writing system, powerful innovation and R&D platformization to enhance efficiency and capabilities. Our smart writing and the AI effort focused on 3 areas: expanding the foundation of safety technologies, such as ABS and into radar, developing assisted writing features for premium models such as the [indiscernible] and building intelligent ecosystem to product third-party integrations through partnership with Apple and Opel with other industry leaders. We expanded the cross device connectivity, including off-site SIFI alert and up wallet access, enhancing all our user experience.

In the power tree system with advanced next-generation initiatives through a deeper mode controller R&D and the close collaboration with our battery partners. Our efforts focused on 2 key objectives: delivering higher peak current outlook for stronger acceleration and the fine to oral system efficiency to extend the role driving range under the diverse commissions. The TSX Ultra and FX Boston are the stronger than polos R&D [indiscernible]. The enhanced particitecture unable to 25 products that are issuing is 1.92 seconds, setting a new benchmark for urban performance for the FX into last week 3-kilowatt high-efficiency motor and optimized controllers, deliver top speed of 80-kilometer power while maintaining stable power delivery improved thermal performance and consistent power up even during the extended high-speed.

Those advancements not only elevate writing performance but also the foundation for the new generation of new powertrain platform that will still across a few chillies. Now lastly, our product R&D strategy continues to deliver a meaningful operational benefit. In Q3, it accelerated product iteration, strength and manufacturing consistency and increased economy of scale. The improvements supported a smooth [indiscernible] of 450,000 units, surpassing our preset roughly about 20%, while enhancing margins to share components and module design costs.

Now in Q3, we continued elevating the new brand and deepen engagement with our core audiences, particularly in premium customers and GMV riders, our approach integrated lifestyle campaign an product launches and target digital engagement to strengthen brand equity and drive comparison. We act as a series of use focus lifestyle campaigns, the summer right and campaign embedded into the outdoor leisure scenes such as lake diving and quick hiking across major cities generate 130 million impressions across online offline channels. Following the FX windstorm launch, we host large steel test rate events in term and [indiscernible] engaged riders in real mounted environment. This created authentic word of mouth within the key signal to provide valuable feedback.

Our launch bank continue to highlight new technology leadership. The June '17 do Ultra flagship launch center about 20,000 units 5 hours to the CMV exceeding RMB 228 million. the FX Windstorm launch deliver 14,000 units sold in tryout 93% past ratings, resolutely strong with the Gen V and delivery writers. Now strengthen both our offline online channels as of Q3 new surpassed 4,500 stores nationwide with 238 net new stores added in Q3 and year-to-date. Nearly half of new stores were in the lower-tier cities, supporting deeper market penetration. Our digital ecosystem also scale rapidly, you now manage 9 official factor accounts supported by 1,050 miles operated accounts in Q3, the net will generate plus 30,000 plus live streams, 69,000 content pieces and RMB 740 million pressure the online sales representing close to 70% of our total word.

We also expanded on to a new e-commerce platform on [indiscernible] piloted with 10% store RMB 40 million to 50 million in monthly sales. We plan to expand store coverage and moderator snacks on price local services over 2,200 stores have joined and FX windstorm ABS long to run #2 nationally to force brand resonance among generally riders in the lower tier market.

Now turning to overseas market. Q3 unfolded as expected, a transitional quarter as we continue to optimize operation and preparing for our next growth cycle. The overseas sales volume reached units with decline in micro mobility, offset by encouraging progress in the electro motorcycle. Despite Q3 being a seasonal low for European tower demand, our electro motorcycle sales reached approximately 2,500 units, up 160% year-over-year. The self-operated sales accounted for 76% of total we further accelerate our self-operated dealer network expansion, dealers in those direct distributor regions grow from 120 at the start of the year to 29% in Q3, exceeding our initial target of 50 million. This reflects the strong brand recognition product competitiveness and the growth growing retailer confidence in direct distribution market.

With channel foundations now established, we will fit from capability building towards product real and deeper channel market penetration. The product lineup and bid act position us strongly for multiyear growth. At [indiscernible] largest 2-wheeler show in [indiscernible], we showcased our international product road map, expanding from smart executors to broader electric mobility portfolios. Highlights included 2026, the all-new QIX Series with Google Map integration featuring 135-kilometer power NQS1000 launched in Q3 2026, the own new FTI experience for city commuters in LE and LTE version for Q3 2026, expanded ex QSC, including the 10-kilometer per hour ex-503vesi for second half of 2026.

And lastly, the concept 06 forward-looking 55-meter power platform patient intelligence other than safety. The news NTI-500 was awarded top of our 2025 by German leading motorcycle media outlet. 1,000, a strong validation of our product excellence. Micro mobility will reach to 11,900 units, down 77% year-over-year, reflecting market headwinds in the U.S. and Europe and Asia. Europe saw intensified the price competition while the U.S. shifted towards a lower price model due to tariff dynamics. In Q3, we intentionally reduced promotion as shipment to avoid or stocking and protect margin during the period of pricing pressure on supply chain transition. Given the current inventory levels in Europe and the U.S., we expect the structure structural adjustment continue for the next couple of quarters.

Now look ahead, we'll continue executing our strategy of driving fast growth in the China market and scaling our international electric tw0-wheeler business was strategically a general micro mobility operation. We expect China to remain our primary growth driver of strong execution across the for quarters were breakout product each demonstrating our capability in product definition, channel activation and brand influence. However, we back some uncertainty and softening in Q4 this year due to the timing of the new standard implementation. The retailers are preloaded inventory in Q3, shifting some demand from Q4. A new standard compliant product will ramp up from late November to a Q1 2026 shifting part of the Q4 demand into Q1 2026.

Combined, those factors will likely result in a relative flat year-over-year volume in Q4. We expect growth to reaccelerate in Q1 2026 as the regulatory transition completed and the market stabilized. The fourth new standard electric bikes along with 300 to 400 new stores additions in Q4 will support a strong momentum into 2026. Now turning on to the overseas market. For elect 2 wheelers, we expect strong year-over-year growth in Q4, supported by ongoing expansion of direct distributed network. The new product introduced at will fill the multiyear growth starting in 2026. In micromobility, we'll continue prioritizing profitability over SACCI, releasing promotions that focus on clearing existing inventories. This will lead a lower Q4. We expect to -- the adjustment to come coin first half of 2026, with the margin return to the normal level second half of 2026.

Now with that, let me turn the call to Fion.

Thank you, Yan, and hello, everyone. Please note that our press release contains all the figures and comparisons and we have also uploaded cellphone mass figures to our IR website for your easy reference. As I review our financial results, I'm referring to the third quarter reversion at say otherwise and all monitory figures are in or not specified. As Yan just mentioned, our total sales volume for third quarter was 466,000 units up 49% compared to the same period of last year. Among this, 451,000 units sold in China and the remaining 14,000 units overseas. Nearly 50% of our sales volume in China came from our top 3 models this quarter. And the number of franchise stores in China was 4,542 at the end of third quarter.

Total revenue for the third quarter amounted to RMB 1.69 billion, an increase of RMB 67 million or 65% compared to the same period of last year and the results came in slightly ahead of our guidance, primarily due to the robust sales volume growth in China during the peak season in third quarter. China revenues were RMB 1.62 billion, increased 84% year-over-year and accounting for 95% of total revenues. Of this, the quarter revenue were RMB 1.48 billion, and this growth was primarily driven by a 74% increase in sales volume and coupled with a higher ASP.

China scooter ASP was RMB 3,283 representing a nearly 7% year-over-year growth and remaining largely stable compared to the previous quarter. And this growth was primarily driven by a favorable shift in our product mix. In Q3, our top seller ant with a retail price range from RMB 3,699 to RMB 4,599 continue to perform well. In the meantime, complemented by a strong contribution from the new products like the NLT and NSP range from RMB 3,899 to RMB 6,299 Collectively, these 3 top sellers accounted for nearly 50% of our total sales volume this quarter. Overseas revenue was RMB 77 million representing 5% of total revenue. school revenues, including electric motorcycles and Mopac, [indiscernible] and e-bike amounted to RMB 67 million, down from RMB 130 million in the same period of last year, and this decline was driven by a decrease in sales volume and ASP of Keplers.

Over this scooter ASP increased 90% year-over-year and 41% quarter-over-quarter to RMB 4,648 and driven by a greater proportion of revenue coming from the higher priced electronic motorcycles and more pads. Revenue from accessories, spare parts and services were RMB 145 million, representing 8.6% of total revenue and 51% increase compared to the same period of last year due to the increase in spare part sales in China. Gross margin this quarter, gross profit this quarter in city RMB 370 million, marking a significant improvement compared to RMB 142 million during the same period of last year and RMB 252 million last quarter. The gross margin was 21.8%, 8 ppt higher than the same period of last year and 1.7 ppt higher than the previous quarter marking our best quarterly gross margin performance this year, and this improvement was driven by the ongoing cost reduction initiatives and the economy of scale from higher sales volume in China market.

Operating expenses for the third quarter were RMB 297 million increased 48% compared to the same period of last year. and OpEx ratio down to 17.5%, dropped from 19.6% in the same period of last year and 21.1% in the previous quarter. Selling and marketing expenses rose by RMB 87 million year-over-year to RMB 215 million, primarily driven by higher spending on marketing and online promotion campaigns in China. Selling and marketing expenses representing 12.7% of revenue compared to 12.5% in the same period last year and down from 16.1% last quarter. R&D expenses increased by RMB 30 million year-over-year to RMB 43 million, primarily due to the higher staff cost and share rate compensation. R&D expenses representing 2.6% of revenue compared to 3% in the same period last year and down from 3.5% last quarter.

G&A expenses decreased by RMB 4 million year-over-year to RMB 39 million, mainly due to the improved cash collection from account receivable which resulted in the reversal of better provision and G&A expenses representing 2.3% of revenue, down significantly from 4.2% in the same period of last year, well up from 1.5% last quarter as the company benefited largely from foreign currency exchange gains in the previous quarter. The net income was RMB 82 million with a net margin of 4.8% on the GAAP accounting compared to a net loss of RMB 41 million for the same period of last year and net income of RMB 5.9 million for last quarter. The non-GAAP net income was RMB 88 million.

And turning to our balance sheet and cash flow. We ended the quarter with RMB 1.8 billion versus RMB 1.1 billion last year-end in cash, restricted cash, term deposits and short-term investments and our operating cash inflow amounted to RMB 433 million. The CapEx amounted to RMB 73 million, reflecting an increase of RMB 32 million compared to the same period of last year. And this can be attributed primarily to an increase in the opening of new stores and module cost in China. And now let's turn to guidance. We expect the fourth quarter revenue to be in the range of RMB 737 million to RMB 901 million representing a year-over-year change of minus 10% to plus 10%.

And please be aware that this outlook is based on the information available as of the date and reflects the company's current and preliminary expectations, which is subject to change due to uncertainties relating to various factors. And with that, we'll now open the call for any questions that you may have for us. Operator, please go ahead.

[Operator Instructions] Seeing no more questions in the queue. Let me turn the call back to Mr. Li 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 look 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. Speakers, please stand by.