Niu Technologies (NIU) Q4 2024 Earnings Call Highlights: Record Sales Growth Amidst Margin ...

GuruFocus.com
18 Mar
  • Total Sales Volume (Q4 2024): 226,600 units, 65% year-over-year growth.
  • China Sales Volume (Q4 2024): 182,000 units, 65% year-over-year growth.
  • Overseas Sales Volume (Q4 2024): 44,000 units, 64% year-over-year growth.
  • Total Revenue (Q4 2024): RMB819 million, 71% increase year-over-year.
  • Total Revenue (Full Year 2024): RMB3.29 billion, 24% increase from 2023.
  • China Scooter Revenue (Q4 2024): RMB646 million, 82% year-over-year increase.
  • Overseas Scooter Revenue (Q4 2024): RMB87 million, 12% of total scooter revenues.
  • Gross Margin (Q4 2024): 12.4%, a decrease of 6.6 percentage points year-over-year.
  • Gross Margin (Full Year 2024): 15.2%, down from 21.5% in 2023.
  • Operating Expenses (Q4 2024): RMB193 million, RMB53 million lower year-over-year.
  • Net Loss (Q4 2024): RMB73 million.
  • Cash and Short-term Investments (End of 2024): RMB1.1 billion.
  • CapEx (Full Year 2024): RMB120 million, RMB41 million higher than last year.
  • Guidance for Q1 2025 Revenue: RMB631 million to RMB707 million, 25% to 40% year-over-year increase.
  • Sales Volume Guidance for 2025: 1.3 million to 1.6 million units.
  • Warning! GuruFocus has detected 4 Warning Signs with NIU.

Release Date: March 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Niu Technologies (NASDAQ:NIU) achieved a significant 65% year-over-year growth in total sales volume for Q4 2024, with 226,600 units sold.
  • Total revenue for Q4 2024 increased by 71% year-over-year, reaching RMB819 million.
  • The company expanded its product offerings with the introduction of the new F-Series and high-performance NX and NXT Series, enhancing its competitive product portfolio.
  • Niu Technologies (NASDAQ:NIU) successfully opened approximately 900 new stores in 2024, with plans to open another 1,000 to 1,500 stores in 2025, strengthening its market presence.
  • The overseas market saw a substantial 64% growth in sales volume in Q4 2024, driven by strategic market expansion and operational optimization.

Negative Points

  • The overall gross margin for Q4 2024 decreased to 12.4%, down 6.6 percentage points compared to the same period last year.
  • The overseas branded scooter ASP decreased by 25% due to a change in product mix, with kick-scooters accounting for 98% of total overseas scooter sales volume.
  • The company faced significant headwinds in the micro mobility market due to a 25% US tariff increase on key products, impacting margins.
  • Niu Technologies (NASDAQ:NIU) reported a net loss of RMB73 million for Q4 2024 and a full-year net loss of RMB193 million.
  • The company experienced a decline in gross margin for the full year 2024, down from 21.5% in 2023 to 15.2%, primarily due to overseas factors and domestic market challenges.

Q & A Highlights

Q: What is your sales target for kick-scooters in 2025, and what is your long-term plan for this business considering profitability challenges? A: Yan Li, Chairman of the Board and CEO, stated that they expect a 30% to 50% growth in kick-scooter sales for 2025, following the 160,000 units sold last year. The profitability issues were mainly due to high US tariffs, which are being addressed by shifting production to Southeast Asia. They anticipate the kick-scooter business to return to profitability this year.

Q: What is your outlook for average selling price (ASP) and gross profit margin in the domestic market for 2025? A: Zhou Wenjuan, CFO, explained that they expect the ASP in the domestic market to slightly increase due to the popularity of high-end products. The gross margin is expected to improve due to economies of scale, cost reductions, and potential adjustments in distributor margins.

Q: Can you provide guidance on the expected net profit margin by 2025, and what is the long-term outlook? A: Zhou Wenjuan, CFO, mentioned that 2025 is a recovery year, and while they are not providing specific net profit margin guidance, they expect to achieve overall profitability. Quarterly results will be shared to keep investors updated.

Q: Which quarter in 2025 is expected to see the company's net profit transition from loss to profit? A: Zhou Wenjuan, CFO, indicated that they expect to achieve quarterly profitability in the second quarter of 2025, as it is a peak period for revenue and both domestic and international markets are expected to perform well.

Q: What are the strategic initiatives for expanding sales channels and market presence in 2025? A: Yan Li, CEO, highlighted plans to open 1,000 to 1,500 new stores in China, focusing on Tier 3 cities, and expanding the dealer network overseas. They aim to enhance brand visibility and drive sales growth through these initiatives.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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