Good day, ladies and gentlemen. Thank you for standing by. Welcome to Niu Technologies Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I’d 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 new technologies results for the fourth quarter 2023. The earnings press release, corporate presentation and financial spreadsheets have been posted on our investor relations website. This call is being webcast from our company's IR site as well, and the 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 Security Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions, and other factors. The company's actual result 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 included discussion of certain non-GAAP financial measures. The press release contains 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.

Thanks, Kristal. And hello, everyone. In the fourth quarter of 2023, our total sales volume was 137,000 units. Maintaining the same level one year ago with slight year-over-year drop of 0.6%. Specifically, sales volume in the China market dropped by 6.4% to 110,000 units, while sales in the overseas market had a significant increase of 33% to 27,000 units. Total revenue in Q4 was RMB478.7 million, a decrease of 21%. Those results wrapped up the financial year of 2023. In 2023, the total sales volume was 709,000 units, total revenue for the entire year was RMB2.7 billion. Now, the year of 2023 presented significant challenges for Niu’s operations. The lingering effect of lithium battery price hike in 2022 continued to impact our sales in the first half of 2023. While the price of lithium battery returned to the normal level in the second half of the year, our business faced additional setbacks due to consumption upgrades or downgrades in the top tier cities in China. This trend characterized by cautious spending behaviors among the premium market customers resulted in a slowdown in sales. Now in the international electric two-wheeler market we encounter challenges both internally and internally. The decline of electric moped market in the key European countries such as Germany and the Netherlands coupled with temporary operation disruptions due to issues faced by our distribution partners in Europe further hindered our growth in 2023. Now despite the headwinds, our 2023 presented itself a year with opportunities to reflect and refocus our strategy. In the China market, our product strategy remains focused on the premium market segment, enhancing our product line by growing our classic series and also by successfully introduce a more sporty style Falcon series. One notable product released in 2023 is the MQiL, the legacy return product updates our iconic M-series with significant design and performance improvements. In just seven months of launch, the MQiL sales volume in 2023 represents 16% of China's total sales. The Falcon series is also another popular series that we introduced in 2023 that quickly become well-known style besides the classic Halo light series with the recent launch of F400T and F200, F100 products. The new F-series together represents nearly 35% of total China sales. Now, our dedication to craft a premium product is complemented by our unwavering commitment to build a premium brand. Throughout 2023, we remain deeply engaged in branding and marketing activities, leveraging various user events and cross-brand collaboration to strengthen our presence in China market. We actively participated in exhibitions and road shows, collaborating with leading lifestyle brands such as the North Face Mountain Festival, Sneaker Con, G-Fusion Game Fest, and the Designer Toy Expo. These events provided us with valuable opportunities to showcase our products and elevate our brand presence. Simultaneously, we maintained a robust online presence through a strategic communication and a marketing campaign, predominantly on short video platforms like Xiaohongshu and Douyin. Collaborating with over 600 KOLs and KOCs, our content generated over 250 million views, further solidifying our brand's digital footprint. Furthermore, 2023 saw us embark on an impactful cross-brand collaboration, such as our partnership with globally recognized IP Kumamon resulting the launch of new cross Kumamon G100 scooters. Additionally, in Q4 2023 we established a significant official partnership with JD Gaming, a leading e-sports team in China and a finalist in the League of Legends World 2023. Moving forward, we'll continue to leverage our strategic collaboration and high-profile events to amplify our brand visibility and reinforce our position in the market. Now turning into the overseas market, in 2023 we encountered a mix of challenges and opportunities. Our electric two-wheeler sales experienced a significant decline of 70%, primarily attributed to the operation disruption faced by one of our key distributors. However, our micro-mobility segments saw a modest increase of 0.5% year-on-year. Despite the decline in the electric two-wheeler sector, we have initiated efforts to make operational adjustments to improve our performance since the second half of 2023. We continue to introduce new products in 2023 in the electric two-wheeler market. In the fourth quarter, we introduced the RQi, a high-performance urban quad-electric motorcycle to the European market. Its cutting-edge design, swift acceleration, and integrated smart features, such as keyless lock/unlock, GPS navigation, [OTA] (ph) update, have been met with enthusiasm from the market. Alongside the RQi we launched the XQi electric dirt bike, available in two variants, the XQi3 Street for urban riders and XQi3 Wild for off-road adventures. The XQi quickly garnered acclaims winning the 2023 Gold Winner of the New York Product Design Awards. Furthermore, 2023 marks the official launch of a new battery swapping solution compatible with our newly introduced F600 e-mopeds. This initiative [indiscernible] collaborate with partners across Southeast Asia, South America, and Europe to revolutionize the way riders engage with our product by offering quick, efficient battery swaps, thereby opening doors in the markets that we have previously yet to penetrate. We officially kick offed the solution in Q4 2023 and expect to have battery swapping cabinets available by working closely with three to five operational partners by the end of year 2024. In the micro-mobility sector, we delivered sales volume slightly higher than the previous year with the increase of 0.5%. However, the total activation number in 2023 grew by 2 times compared to 2022. In product strategy, we focused on running our product portfolio to cater a broader spectrum needs. The launch of our premium KQi Air and the KQi Air X models constructed predominantly from lightweight carbon fiber for incredible low weight of under 12 kilogram, solidifies our range in micro mobility categories. With the KQi Air series, we now brought the comprehensive lineup that spans from high innovative design scooters in US dollars thousand plus range to high-performance scooter in the $800 to $900 range to accessible entry-level options in the $300 to $400 bracket. This diverse range lays a strong foundation for anticipated sales growth in 2024. The expanded sales channel of our micro-mobility product also play a big role in the growth. In 2023, we transition from focusing on online sales through Amazon and Shopify to a combination of online and offline sales by working with official retail partners like Best Buy, MediaMarkt, [indiscernible] and more. Through those retail partners, we were able to place our products in more than 1,000 physical locations in the United States and Europe. Our active participation in global exports and road shows including the AIMExpo in Las Vegas, [EFA](ph) in Berlin, and [ECMA] (ph) in Milan, and the Electric Expo in various countries have significantly elevated Niu brands visibility. Moreover, our inclusion in popular media such as the appearance in the movie Murder Mystery 2 and TV shows like [indiscernible] Show and The Price is Right has pleasantly surpassed our expectations, further enhancing our brand's presence on the global stage. Now, as we move into 2024, our optimism for growth is brought by strategy adjustment laid out in 2023 across our operations. In China, our commitment remains strong towards the premium market segment, focusing on premium product development, targeting very specific consumer segments, channel expansion into Tier 2 and Tier 3 cities, and same store sales growth via online and offline traffic optimization. In terms of product, back in 2022 we introduced our new classic UQi Plus model, an upgraded U-series featuring improved light design, smart control, enhanced rider ergonomics. This model quickly captures market attention and contribute to near 14% of total sales in 2022. Similarly, the MQiL introduced in Q2 2023 as the enhancement of all-time popular M-series presented itself as a classic return with performance improvement. The MQiL contributed to 16% of total 2023 China sales. Both models served a clear testimonial to the consumer's preference for a classic design combined with upgrade technology, both in power train and smart functionalities. Those design styles are deeply ingrained in the minds of Chinese consumers as premium high quality. The successful launch of the UQi Plus in the U-series and the MQiL in the M-series set a foundation for our new product. Now on February 29, 2024, we debuted our newly designed [NX] (ph) series, continues the design style of our first legendary product, the N1, which laid the foundation for our company back in 2015. The N1 was our first electric moped in China and has sold over 0.5 million units since its launch. It has not only become the legendary design for Niu, but also a classic example of premium high quality smart electric scooter in China. However, since 2019 with the introduction of new regulations on China electric bicycles, the N1 no longer met the updated standard and has to be sold as a motorcycle leading to a decline in sales. Nonetheless, consumers have long been requesting an upgrade N1 that complies with both the regulations for electric bicycles and motorcycles. Now in 2024, we finally daubed the NX series with the NX represented electric motorcycles and the NXT as the electric bicycle. Both models inherited the design style of the original N1 but are refined upgrades in modern look. The design stands out with a futuristic style incorporating magnetic transparent panels to showcase its front circuitry. The body is designed with sharp yet smooth aerodynamic lines. Additionally, we have upgraded the halo light, a signature element shared across our most well-known scooters. In the NX series, the halo light is embedded in the front panel, adding another futuristic touch to the design. The NX and NXT are equipped with our most cutting-edge technology functions to date, making them the smartest electric scooters on the market. For driving safety, they are equipped with the full-function ABS and TCS. Additionally, they feature the BSC, the blind spot detection, and RCW, the rear cross-traffic warning, along with the automobile-grade dash cams in the front and the millimeter wave radar in the back. To further enhance the riding experience, they are outfitted with the interactive TFT display serving as a smart cockpit. This incorporates riding aids features such as keyless start, navigation, remote access, as well as interactive features, including lap timing, riding routes, logs, and entertainment systems. Also, to seamlessly integrate with the user's smart device ecosystem, the update also incorporates new smart features like map for navigation and compatible with Apple and the Huawei Harmony system. The integration and enable features such as voice control, shortcut phone display, and device management, including Apple's Spun Mine features. Now, as one of the highest-performance electric motorcycles we ever released, the NX boosted maximum power at 20,000 watts with top speed of 135 km per hour and accelerates from 0 to 50 km per hour in just 2.45 seconds. The NXT is available immediately since its launch with pricing from RMB6,000 to RMB12,500, while the NX is available in May. The NXT were well received as evidenced by online preorders of NXT initially through live streaming of major platforms. With the initial two weeks launch, we secured more than 10,000 units in preorders generating sales revenue exceeding RMB100 million. This amount is 40% more than compared to our initial crowdfunding campaign for the release of our first M1. Those pre-order results position us as top seller across all major e-commerce platforms during the period. Now, with the successful launch of NX and NXT Series targeting the premium motorcycle consumer segments and performance-driven electric bicycle segments, we also plan to introduce several products to target diversified user groups. For example, our recently upgraded U1 product launched just a few days ago targeting female users with its new color scheme, ergonomic improvement in handle and seat positions, easy to use smart functionality and options to include baby seat in accessories. The key to our product strategy in 2024 is to build our product portfolio targeting the premium consumer segment with diversified needs. Now supported with those new products, we also plan to restart channel expansion in Q2 2024, building up the channel coverage across Tier 1 to Tier 4 cities. We initially focused on top 45 cities which represent 80% of our sales, with plans to build sales front in the lower tier cities as well. Now with additional store counts, the key focus for 2024 remains the improvement of same store sales, leveraging the combination of online and offline traffic. We initiated those efforts in the second half of 2023, conducting over 15,000 live stream sessions on Douyin and Xiaohongshu. We have recorded some successful case of achieving a GMV of over RMB100,000 in just one live stream session, indicating a successful online to offline conversion model we plan to further scale up. Starting Q1 2024, we have continued live stream initiatives in 30 key city markets, enabling those stores to sell directly through online live streaming on a daily basis. Additionally, we have planned to launch online sales campaigns and co-create over 10,000 wide-spreading social media content. With those strategies in place, we anticipate to improve our same store sales by 10% to 20% in 2024, driving significant volume growth for the company and the enhanced store profitability. Now with our product strategy and retail channel expansion in focus, we aim to further strengthen our brand through marketing and branding campaigns. A recent highlight was our collaborations with JD Gaming team. Expanding our partnership from last year, we joined forces with JD Gaming team as their official electric scooter partner. This collaboration extend from social media engagement to product launches and seek to make a significant impact within the Generation Z demographics. The collaboration with JD Gaming marks the beginning of a serious partnership planned for 2024. We intend to continue our co-branding effort with several strong ITs targeting specific user groups and leveraging social media platforms. Now, in the overseas market, our comprehensive product portfolio, which includes the introduction of MGT100, RQi, and XQi models in the fourth quarter of 2023 strategically bridged the gap between our product offering the high-performance electric motorcycle market demand. The MGT100 priced at EUR5,000, together with MGT provides a comprehensive coverage from 50cc to 125cc electric motor. The RQi targets the electric motorcycle category offering a high-performance quad motorcycle option with price starting at EUR8,000. Additionally, the new third bike XQi [indiscernible] debut product in the off-road motorcycle sector priced at EUR6,000. The XQI model has garnered significant attention. Our active engagement in industry events, such as AIMExpo in Las Vegas, Moderator in Dublin, Germany, has further amplified our brand visibility. At those expos will brought our latest bikes, providing attendees, including influential KOCs with the opportunity to test-ride and view our product. The positive feedback and heightened interest from the diverse user group received at those events has been instrumental in solidifying our presence in the market. Most importantly, since the later half of 2023, we have undertaken substantial adjustment in our business operations in overseas electric two wheeler sector. In some of our key markets, in addition to the existing distributors, we are establishing entities and the operation team for direct distribution of some of our product to retailers. We believe this direct distribution model will enable us to invest more in local branding and marketing, establish strong ties with customers, and make us more adaptable to local market changes. With those operation adjustments, they initially delay the revenue recognition until products actually reach to individual retailer dealers. They will help us create a strong foundation in each local market in the long run. With the comprehensive product portfolio and operational adjustment complete in Q1 2024, we are confident in kickstarting the growth beginning in the second quarter of this year. Now in the overseas micro-mobility sector, we have established a solid foundation for growth in 2024 over the past two years. Although the book sales volume has remained relatively flat compared to 2023 to 2022, the actual sell volume to customers has doubled as suggested by the activation number increase and the trend continue at a 2 times rate. We believe that our effort in product portfolio building and the sales channel establishment has positioned us well for the further growth this year. On the product portfolio front, with the introduction of the KQiAir, a full carbon fiber lightweight high performance kick scooter in September 2023, we now boost the comprehensive product lineup. Additionally, January 2024 marked the launch of KQi 300 series, an enhancement of popular KQi 3 Series designed for all terrain use. This KQi 300 Series feature is due to hydraulic suspension for better handling on an even surface, promising up to a 60 kilometer range per charge and starting at $700. We have several other product upgrade plans throughout the year of 2024. Now with this product lineup, we made significant progress in entering retail channels in the second half of 2023, laying a solid foundation for growth in 2024. In the U.S. market, we are well positioned in over 800 Best Buy stores and events in our efforts entering retailers such as Walmart, Target, and Costco. In Europe, our products are displayed in over 400 MediaMarkt stores in Germany, over 200 Blanchet stores in France, and we're making progress in placing them nearly 100 core English stores in Spain. Additionally, we're moving forward with new retail partnership with [Media World] (ph) in Italy and the retailers in Australia and others. By the end of 2024, we plan to double the number of point of sales of micro mobility products by expanding the retail sales network. So heading into 2024, we're optimistic about regaining growth. In the China market, the excitement surrounding our latest product release has been palpable. Leveraging the momentum gained from the newly released product, we have also a rollout schedule prepared for all the other products throughout the year, as well as the channel expansions. In the overseas motorcycle market with the readily shipped product and the operational adjustment already in place in Q1, we're confident in the growth of 2024. However, those operational adjustments may temporarily result in a decline in sales in Q1 as the sales are actually booked differently due to the model change. For the micro-mobility segment, we anticipated fast growth in Q1, as well as throughout the entire year, given that we have laid out our product portfolio and established both online and offline channels at the beginning of this year. Now, with those factors considered, we anticipate the sales volume in 2024 reaching 1 units to 1.2 million units. Now I'll turn to Fion to discuss.

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 mentioned, our total sales volume for the fourth quarter was 137,000 units, a decrease of 0.6% compared to the same period of last year. And specifically speaking, the China market sales volume was 110,000 units. And overseas market was 27,000 units. And for the full year 2023, the total sales volume was 710,000 units, including 601,000 units in China and 109,000 units overseas. And the total revenue in the fourth quarter was RMB479 million, down 22% compared to the same period of last year. To break down the scooter revenues by region, the scooter revenue in China were RMB355 million, down 21%. This decline primarily contributed to a shift in product mix. As the Chinese economy was still in recovery, our premium series showed a slower recovery rate compared to the mass premium series. As a result, the ASP reached to RMB32.16, a 15% lower on a year-over-year basis. However, the ASP in each category has increased. The premium ASP remained almost RMB5,000. And the mass premium ASP increased to nearly RMB3,000. The overseas scooter revenue, including kick-scooters, e-mopeds and e-motorcycles was nearly $60 million. The [brand] (ph) e-scooter ASP decreased to $2,200, down 49% year-over-year. Despite the higher sales volume contribution of kick-scooter with the lower ASP, the new launch to K1 and KU is contributing to 22% of the sales volume, which targeted towards the youth and the entry-level market and have lower retail prices. Accessories, spare parts and services revenue are RMB65 million due to the decrease in the overseas spare parts and services as we mentioned in the previous quarters. For the full year 2023, our total revenue decreased by 15% to RMB2.7 billion. And China's scooter revenue as a whole saw a 15% year-over-year decline to RMB2 billion. And the overseas scooter revenue decreased by 29% to RMB349 million. The total overseas revenue, including scooters and non-scooters contributed to 15% of the total revenue. And now let's look at the ASP in 2023. The overall scooter ASP was slightly decreased to RMB3,323, 3% down year-over-year. While the domestic scooter ASP was RMB3,344, up 1%. And this minor growth was driven by the higher ASPs in both premium and mass premium series, despite a shift in the mass premium in overall product mix. And overseas blended scooter ASP was RMB3,200, 21% down as the proportion of kick scooters increased, and also combined with the decrease in the newly launched lower ASP kick scooters in Q4. The gross margin for the fourth quarter was 19%, 3.4 ppt lower than the same period of last year and mainly due to the product mix change in the domestic market. Well, for the year end 2013, the gross margin was 21.5%, up from 21.1% and representing a 0.4 ppt increase on an annual basis and mainly due to a reduction in raw material costs, especially in domestic Niu product lines. And talking about operating expenses, The fourth quarter OpEx was $246 million, $50 million higher than the same period of last year and mainly due to our lower revenue base. Selling and marketing expenses were $191 million, $84 million higher than the last year, and primarily resulting from our expansion into the overseas markets, out of which $43 million was from the overseas micro-mobility holiday season promotion. And the other half stems from the rental expenses largely driven by the inventory buildup resulting from geopolitical conflicts and early stock taking for the expected peak season in 2024. Additionally, the current warehouses are incurring higher unit per area costs since the micro mobility sector is still in the early operating stage and those expenses are expected to decrease in the subsequent quarters. R&D expenses were $36 million, $5 million lower than the fourth quarter of 2022, and mainly due to the decrease in staff costs and share-based compensation of RMB8 million, and partially offset by the increase in design and testing expenses on new model, which has been and will be launched in 2024, of RMB3 million. G&A expenses were RMB19 million, RMB28 million lower on an annual basis, mainly caused by the decrease in provision for credit losses of RMB22 million and the decrease in stock-related cost of RMB5 million. For the full year 2023, the OpEx was RMB891 million, 15% higher than 2022. And the increase was mainly due to the provision for credit losses of RMB114 million. And the increase promotional activities and rental expenses in overseas markets of RMB101 million, partially offset by a $45 million decrease in G&A and also RMB40 million decrease in domestic marketing and promotions. Despite prudently raising provisions for credit losses on overdue payments, we retain a positive outlook on future receivables collection, given our current partners' robust financial spending and their ongoing payments continuously. Exclude the non-cash expenses, such as the provisions for credit losses, depreciation and amortization, and share based compensation, The OpEx increased 2% year-over-year. The non-GAAP OpEx was RMB845 million. In the fourth quarter, we had a net loss of RMB130 million and the non-GAAP net loss of RMB 122 million. On a full year basis, due to the factors including the lower than expected domestic sales and increasing overseas business expansion as mentioned above. We had a net loss of $272 million and non-GAAP net loss of $224 million. Turning to our balance sheet and cash flow, we ended the year with RMB1,078 million in cash, restricted cash, term deposits, and short-term investments. On annual basis, the operating cash flow was inflow RMB96 million, primarily because we made a net income after adjusting for non-cash items. And our Q4 CapEx was RMB22 million. For the full year, the CapEx was RMB79 million, RMB56 million lower than the last year, as we cautiously opened up stores in domestic markets. And now let's turn to guidance. We expect the first quarter revenue to be in the range of RMB438 million to RMB480 million, an increase of 5% to 15% 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 subjected to change due to uncertainties related 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.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] One moment for the first question. Our first question comes from the line of Zijun Liu from CITIC. Please ask your question.

Good evening. And I'm Zijun Liu from CITIC. Thank you for your time. And I'd like to be more interested in the following questions. The first two are more about us and the last two are more about our industry. The first one is, this year's store expansion plan and the strategy. It means we would really like to restore the original channel or more to supplement the new sinking channel. And the second question is about how to evaluate [indiscernible] aggressive sales target this year and whether it would squeeze over sales target. And the above two is about us. And I wonder if you'd like to sort this two, and then I'm going to the sector.

So I'll talk first on the store openings. I think it’s actually a mix of -- basically I think we're still going to be focused on the top 45 cities at first. And with the option to expand into other cities as well. So notably in the past, if you look at the last couple of years, because of the lithium price hike, we have lost roughly about 500 stores. So I think the expansion for including -- actually including the store we have lost and then reclaiming back as well as opening in new areas. So I think those are basically -- I think we have a clear roadmap, actually location map on where to open stores, and based on our new product portfolios. Now, I think with the second question about competitors. I think, overall, if you look at our product offerings, so our current product offerings, basically the price range anywhere between basically RMB3,500 above to up to RMB12,000. So you look at the entire market, the volume above RMB3,500, that volume is basically somewhere around 14 million to 16 million units. So within that, let's call that our addressable market at 14 million to 16 million units. And with that number, last year we only did about 600,000. So even with this year's forecast, I think the market is still -- the addressable market is still very significant and large than our volume target. So in the sense that I think we're less worried about competitors, but I think we're more focused internally on how to get the best product out there and how to expand the channels, expand the stores so the consumers, the interested consumers actually have a location to acquire the product. I think that's sort of -- hopefully that addresses your second question.

Got it. Quite clear, and I really hope that this year could be a -- we could see a robust growth in our market. And the next two questions about the sector. First one is the Nanjing fire has attracted the attention of the society to the batteries of the two wheelers. What is our view of the impact to this sector? And the second is, our users are more concentrated in [indiscernible], as you just mentioned. And also our users' time of using our product is relatively long and has accumulated for a long time. So I'm very curious about whether we can -- we have ever done some analysis of our users' behavior on whether we can detect change in their consumption habits from this accumulated data, such as changes in the cycle, changing costs or batteries. Thank you. This is my two questions about sector.

Sure. I think first of all, I'll address the issue with the fire accident. I think it's unfortunate. So I think what it really calls out for, high quality products. I think that's -- in the case of what we observe in the market is many people who buy products either low quality or they buy products, then they buy the original scooters, but then they complement with a modified third party lithium batteries. And usually those third party lithium batteries are second hand lithium batteries, it's poorly manufactured, it's low quality. That's where -- I'm not sure what’s actually the cause of Nanjing fire, but our experience back then, throughout the time, it's actually the modified lithium batteries, like not original manufactured ones are one of the main causes. So I think from our perspective, I mean, we have actually taken many caution -- preventive measures. For example, our scooters only work with our batteries, not necessarily -- not working with the third party second hand batteries. And I think with this, I think it basically raises a bell saying, I think it's basically people quite for, I think, a high quality product with original parts are necessary and to guarantee safety. So I think that's actually set advantage for us. Now I think in terms of your second question about user behaviors. I think typically we observe that people tend to keep these scooters, I guess, for roughly about three to four years, I think three years is roughly sort of the usage cycle. I think the -- for us -- we're highly -- we're too concentrated in the top tier cities. I think this year is actually what we're looking at is actually beyond, besides gaining market sharing in the top tier cities is to actually expand our footprint and getting more store coverage as well as market shares in the Tier 2 and Tier 3 cities with -- basically with products that are suitable to those markets.

Got it. Quite clear. And thank you again for your time. And I sincerely hope that we could achieve the goals of this year and the Niu returns. Thank you.

Yes, thanks.

Thank you for the questions. The next question comes from the line of Yating Chen from CICC. Please ask your question.

Hi. Thank you for receiving my question. My first question is about our sales volume target. As we can see, the target growth for 2024 is more optimistic than last year. And so I'd like to know what is the target sales volume of kick scooters? And what is the sales target for two wheelers, especially for domestic and overseas markets? This is my first question. Thank you.

No, I think for the kick-scooters we're looking at -- because in the past few years, even though the selling volume to our distributors remains roughly constant, but the sell-off, basically the sell-off to the consumer has been doubled if I compare 2023 to 2022. So that's because the comprehensive product portfolio, also over the year we're actually able to get to all this offline channels. So we expect the sell-off volume this year also doubled, which sort of implying the selling volume to the distributors actually double as well. So on the kick scooter we're looking at somewhere -- anywhere between 200,000 to 250,000 units. So I think that adds on the kick scooter market. Then the rest is sort of the electric two-wheeler. And within the electric two-wheeler market volume, I think majority of them are going to be in the China side, where the international electric two-wheeler and electric motorcycles, probably somewhere around 20,000 to 30,000 units than the rest of whole China.

Thank you very much. And my first question -- and my second question is about our profit margin. Especially, I'd like to know our product strategy in 2024. To achieve our sales volume target, will the average selling price or profit margin will decline in 2024?

All right, so I think basically, I guess -- this question this sort of relates to our first unit product launch, the NX and NXT in March. So that's actually one of the premium or high-end product for our case, the retail pricing is between RMB6,000 to RMB12,000. But then if you look at another product which just launched, it's called [U1E] (ph), basically upgraded U1, which a few days ago, that retail pricing is around RMB4,000. So if you look across the board, we expect our average ASP to roughly remain constant compared with last year. So I'll let Fion to comment on the margin part.

Yes, well, as Yan just mentioned, even though that we upgraded our classic N series, and we're about to launch the new products in the following months with a better price versus the product. But the ASP will stay at a relatively flat level in the domestic product line. Well, in the overseas product line, since we have a high expectation on the e-motorcycle and the mopeds recovery in the overseas market. Those are almost two times to four times higher than the kick-scooters ASP. So we will expect a slightly recovery from the overseas scooters ASP in 2024. Altogether, will give us a blended scooter ASP almost at the same level in this year. Go back to the gross margin for the domestic scooters and the overseas scooters, we were expecting a slight gross margin increase to 1 ppt to 2 ppt altogether blended with the domestic and the overseas market. And we have already made the cost efficiency, those operational activities in 2023. And with the scale of the sales volume increase, we may get the benefit from the gross margin. But we didn't expect a higher growth margin increase because we still consider to share the profit with our dealers and also the overseas market expansion with our partners. That's why we considered the gross margin altogether will only increase 1 ppt to 2 ppt for the whole year.

Thank you very much. And my last question is, I'd like to know, do you have any guidance for 2024 on the selling expense ratio? Or to say, will it grow or remain steady, comparing with 2023?

Well, 2023 is a very special case, since we are in the transition of the overseas expansion and also the heart in the domestic market. That's why the expenses ratio is pretty high. But I think the benchmark for the expenses as percentage of revenue, we could use the benchmark in the second half of 2021, first half of 2022. We may -- we will try to bring back the expenses as a percentage of revenue. Go back to that level, which means at least we will have a -- we will maintain the expenses within 20% to 24% since it's a slightly large range. We are still in the transition for the overseas and the domestic market balance. But the first half of 2022 and second half of 2021 is a benchmark of the expenses ratio. So this is our target for 2024 expenses ratio.

Thank you very much. That's all my questions.

Thank you for the questions. [Operator Instructions] We have a question from Michael Simmons from [GlobalView SA] (ph). Please go ahead.

Hello, Dr. Li. I'd just like to ask a question about the balance sheet in these sort of slightly tough trading conditions. You and your team have done a good job sort of maintaining a good cash level and the balance sheet. Can you just give us a feel for looking forwards this year, particularly as you've explained, you're going to be spending some money on your international expansion and also continuing to launch many new products. Can you just give some feel for what the balance sheet and the cash position is likely to look like going forward, please.

Well, this is Fion from Niu. I think I can give the trend of our balance sheet instead of the exact figures. Because we are still at the very beginning of 2024. As Yan just mentioned, except for the operating activities and strategies we introduced, on top of that, we may spend higher CapEx on the store opening in domestic markets. I think this is the big non-operating consumption in the domestic strategy. Well, in the overseas markets, we didn't expect any large CapEx impact. The only operational activities will happen in 2024 is how we launched our products in our strategic partner stores. So those are purely the operational activities. We were selective in the operational cash flow. So this is the cash flow part and the CapEx part. In the meantime, we didn't expect there to be a huge increase in the receivables or the payables since the business model is very straightforward. And we also didn't expect the higher increase in the inventory as well, because right now we already have enough inventory for the big season sales in 2024. And after that, we may remain a relatively secured level of the inventory, but will not reach to the higher one than 2023. So I think the business model doesn't change. The only thing is that, if we want to expand the stores in domestic markets, it will bring up the CapEx. While the current production has already reached to 2 million production capacity and we didn't expect as high as this level sales volume. So we don't have any further demand on the expansion on our facilities. Hope this will address your question.

Yes, thank you very much.

Thank you for the questions. With that, I would like to turn the call back to management for closing.

All right. Thanks, everyone, 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.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect your lines.