This Niu scooter shop in Beijing’s Chaoyang district is open from around 8 a.m. to 8 p.m. every day
Evelyn Cheng | CNBC
BEIJING – Almost three years since Chinese electric scooter start-up Niu Technologies was listed on the US stock exchange, the company has not only become profitable, but has also shaken off losses from the coronavirus pandemic.
Niu said Monday that second-quarter sales in China and overseas were up 46.5% year over year to 944.7 million yuan ($ 146 million) and projected third-quarter growth was about the same or better will stay.
“We really see the Chinese market [starting to] in terms of the consumption of electric scooters, “CEO Yan Li told CNBC’s Martin Soong in the Squawk Box Asia on Tuesday. [picking] clearly upwards. “
The company is also pushing a rapid expansion plan. Niu expects to open more than 300 stores in China in the third quarter after adding 450 stores in the second quarter.
Niu said Monday that with adjusted net income growing 53.4% in the second quarter, the company earned 110.6 million yuan ($ 17.1 million) in the first half of this year.
That’s 49.1 million yuan for the same period last year – during the peak of the pandemic in China – and more than the 68.7 million yuan reported for the 2019 period.
The company reported an adjusted net loss of 46.4 million yuan for the first half of 2018.
Niu shares closed 4.6% higher after the results were released overnight. The stock has fallen about 20% since the start of the year. But since going public on the Nasdaq in October 2018, it’s up 147% and has a market cap of $ 1.7 billion.
International shipping challenges
Abroad, Niu sold 34.8% more scooters in the second quarter than in the same period last year.
But the 6,980 units sold overseas were still a fraction of the 246,018 scooters Niu sold in China, a market where sales also grew much faster at 58.8% year over year.
Due to Covid disruptions in global shipping channels, Niu was nearly 4,000 units backlog that failed to ship in the second quarter, Li said in a call with analysts on Monday. This is evident from a StreetAccount transcript.
He noted that importers in Europe and the US are waiting for a drop in shipping costs, which have increased from around $ 150 per scooter to $ 450 per scooter.
Read more about electric vehicles from CNBC Pro
Far-reaching growth prospects
Due in part to this overseas uncertainty, Niu gave a wide range for its guidance for the third quarter, predicting sales would grow 40 to 62% year over year. That is the equivalent of 1.25 billion yuan to 1.45 billion yuan, a difference of about $ 30.9 million.
In the second quarter, the company saw a slight decrease in gross margin due to higher raw material costs.
Management added in Monday’s call that future growth in China this year would vary by region as local governments take different approaches to enforcing regulations on the use of electric scooters. The standards could fuel growth by requiring users to replace their existing scooter models.
The call wasn’t about China’s recent regulatory crackdown, which focused on the monopoly practices, privacy policies and stock market listings of tech giants in overseas markets.