NIU Provides Second Quarter 2021 E-scooter Sales Volume Update

NIU today, July 6, announced the sales volume of the e-scooters in Q2 of 2021, let's take a look together!

Spoiler: Satisfied? Yes but not too much, in line with the outlook released in the first quarter.

Closes today losing 0.93%.

I report part of the press release that you can find in their site:

“In the second quarter of 2021, NIU sold 252,998 e-scooters, up 58.0% Y / Y.

• The number of e-scooters sold in the Chinese market reached 246,018, up 58.8% Y / Y.

• The number of e-scooters sold in international markets reached 6,980, with a growth of 34.8% Y / Y.

The company launched four new products, the F0, F2, F4 and C0 models in April 2021, of which the F0 and F2 models were mass produced and delivered in the second quarter of 2021.

The Company added 450 new stores in China during the second quarter of 2021.

Growth in international markets was mainly driven by the recovery from COVID-19. The delivery, however, was affected by the continuing harsh environment for international shipping.

Of the total sales volume, the units of the G0 and F0 models sold during the second quarter of 2021 accounted for approximately 30.4%.

The G0 and F0 models have a lower sales price and gross margin than other models, and a high percentage of the sales volume of these models negatively impacts the combined revenue for scooters and overall gross margin for the second quarter of 2021."

Ok at this point I would like to make some observations:

• The first observation that we will need later: in Q1 the G0 model represented about 39.5% of sales.

• The price of the G0 scooter starts at 2499 RGB

• The price of the F0 scooter starts at 2899 RGB

• In the first quarter of 2021, sales for escooters were 3660 RMB, in 2020 sales for escooters were 4070 RMB. The company had justified this value due to the variation in the mix of used products and that 39.5% of sales came from the G0, which as I said earlier is priced lower than the other models.

So what turnover can we expect in q2 2021?

First of all I want to underline that this is an analysis that is not intended to be exhaustive and cannot be because it is based on few data available and sales per e-scooter (total turnover divided by the number of products sold) varies from quarter to quarter. .

However I want to shoot some numbers! Let's imagine several scenarios:

• Worst scenario (in reality it can always be worse) The price per e-scooter is 3570 RMB (the lowest price of Q3 2020). In this case we could expect a Revenue of 903 million RMB

• Scenario in line with Q1. In this case 925 million RMB

However in Q1 2021 the CEO says “Considering the recent increase in raw material costs, on May 6th, we increased the retail price from RMB 100 to 300, or 1.5% to 7.5% for selected models in the Chinese market"... So:

• Nearly Best Scenario: Price per escooter of 3840 RMB - Turnover of 970 million RMB

• Best case scenario: (it is easier to believe that things can get worse than better) Price per escooter of 5800RMB (Highest price in Q1 2020). In this case, the revenue would be RMB 1,470 million. (Great! But highly unlikely)

Conclusion and observations

Mine was a simple exercise, I don't want to influence you to invest in NIU.

1. I avoid any comments about the CHINA / US tensions and the difficult time facing the various Chinese titles.

2. I find NIU extremely undervalued right now. It is a young company that has already been producing profits for two years, between 6 and 9% of turnover.

3. More turnover does not mean more earnings. Let us remember that the price of raw materials has risen sharply in the last year. However, NIU manages to maintain a Gross margin between 20% (2018) and 24% (2021).

4. In the Business Outlook presented in Q1 of 2021, second quarter 2021 revenues are expected to range between RMB 900 million and RMB 1,030 million, with a Y / Y of 40% to 60%. So yes, I believe that the turnover can actually vary in this range. I still consider the Y / Y growth worthy of note considering the fact that international sales still suffer from COVID (since 2019 international sales are fixed at 28 thousand units)

5. At the end of 2021 it will be able to increase its production capacity from 1 million to 2 million escooters per year .. and yes ... it has its own industry which is currently being expanded.

I hope this post was helpful or at least gave an idea of ​​the true value of NIU. Unfortunately, few people here on etoro talk about it, but it's one of my favorite companies!