Niu Tech ((NIU)) has held its Q4 earnings call. Read on for the main highlights of the call.
Niu Technologies’ recent earnings call reflected a balanced sentiment, highlighting both robust growth and significant challenges. The company reported strong sales volume growth and revenue increases, driven by innovative product launches and market expansion. However, concerns were raised due to a decline in gross margin, the impact of US tariffs, and a net loss for the year, suggesting areas that need attention.
Record Sales Volume Growth
Niu Technologies achieved a remarkable sales volume of 226,600 units in Q4 2024, marking a 65% year-over-year growth. For the full year, total sales volume reached 924,000 units, representing a 30% increase from the previous year. This growth underscores the company’s successful market strategies and product appeal.
Strong Revenue Increase
The company reported a total revenue of RMB819 million for Q4, reflecting a 71% increase compared to the same period last year. For the entire year, revenue reached RMB3.29 billion, up 24% from 2023, indicating strong financial performance despite market challenges.
China Market Performance
In China, Niu Technologies’ sales volume reached 182,000 units in Q4 2024. The company’s robust product portfolio and strategic initiatives have driven strong domestic performance, solidifying its position in the local market.
Product Innovation and Safety Certifications
Niu Technologies became the first brand to receive a five-star safety certification from the China Merchant Vehicle Research Institute. The introduction of the NX Hyper electric motorcycle, featuring advanced smart riding technologies, highlights the company’s commitment to innovation and safety.
Overseas Market Growth
The overseas market saw a substantial 54% growth in sales volume in Q4. Niu Technologies plans to expand its sales network to over 120 active dealers by year-end and aims to double this number by mid-2025, indicating strong international expansion efforts.
Retail and Channel Expansion
In 2024, Niu Technologies opened approximately 900 new stores, with plans to open another 1,000 to 1,500 stores in 2025. This expansion strategy aims to strengthen the company’s market presence and accessibility.
Gross Margin Decline
The gross margin for Q4 2024 was 12.4%, a decrease of 6.6 percentage points compared to the same period last year. This decline was primarily driven by product mix shifts and increased US tariffs, posing a challenge to profitability.
US Tariff Impact on Micro Mobility
The increase in US tariffs on Chinese exports, rising from 0% to 25%, negatively impacted the micro mobility market. This led to a negative gross margin for a large part of 2024, highlighting the significant impact of international trade policies on the company’s operations.
Net Loss for 2024
Niu Technologies reported a net loss of RMB73 million for Q4 and a net loss of RMB193 million for the full year 2024. These figures underscore the financial challenges the company faced despite strong sales and revenue growth.
Forward-Looking Guidance
Looking ahead to 2025, Niu Technologies aims to achieve sales of 1.3 million to 1.6 million units. The company plans to leverage its core product series, advanced smart technologies, and expanded sales channels both domestically and internationally. This ambitious target reflects confidence in their strategic initiatives and market positioning.
In conclusion, Niu Technologies’ earnings call presented a mixed picture of strong growth and significant challenges. While the company achieved impressive sales and revenue increases, issues such as declining gross margins, tariff impacts, and net losses highlight areas needing strategic focus. Looking forward, Niu Technologies remains optimistic, with ambitious sales targets and plans for expansion, signaling a commitment to overcoming current challenges and achieving future growth.