Good day, ladies and gentlemen. Thank you for standing by, and welcome to Niu Technologies Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will 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 will turn the call over to Mr. Jason Yang, Investor Relations Manager of Niu Technologies. Mr. Yang, please go ahead.

Hello, everyone. Thank you for joining us on today’s conference call to discuss the company’s financial results for the fourth quarter of 2018. We released the results earlier today. The press release is available on the company’s Web site as well as from newswire services. On the call with me today are Dr. Yan Li, Chief Executive Officer; and Mr. Hardy Zhang, Chief Financial Officer. Before we continue, please note that today’s discussion will contain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company’s actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company’s public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Our earnings press release and this call include discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the audited most directly comparable GAAP measures and is available on our Web site. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese Renminbi. With that, now let me turn the call over to our CEO, Dr. Yan.

Great. Thanks, Jason, and thanks everyone for joining us on the call today. So we’re very excited to report another strong quarter with solid financial performance. We grew scooter volume by 78%, net revenue by 95% and improved gross margin to 13.5%. That is 9 percentage points better than this time last year. So despite the sluggishness in the Chinese economy with respect to consumer spending, our results actually show the demand remains robust for electric scooters. So we believe our electric scooter is one of the most convenient and the economic solution for people staying in urban to commute and this transcends economic devices. So still [ph] around the world continues to struggle with traffic congestions resulting from more and more automobile use, but electric scooter enable commuters to avoid traffic jams. Furthermore, if more people switch from four wheels to electric two wheels, it will actually reduce traffic congestion, less than aggregate energy consumption and eliminate point-of-use carbon emission which is a very positive net work effect. So it’s also one of the cheapest solutions for urban mobility. So we’re spreading the retail price toward a positive lifecycle. The daily cost for users is roughly a few Renminbi per day, so it’s even cheaper than taking a subway. Beyond China, we continue accelerating demand growth for electric scooters. In addition, there are also new regulations being put in place to accelerate the adoption of electric scooters. In China, the State Administration for Market Regulation and the National Standardization Administration of China jointly released the regulation of 50 technical specifications for electric bicycles to go into effect on April 15, 2019. So this regulation prompts the industry to upgrade the traditional heavier lead-acid battery to lighter and more portable lithium-ion battery-based electric scooters by putting a weight restriction of 55 kilograms on scooters. So this policy will accelerate the adoption of the lithium-ion battery in the Chinese electric scooter market, while simultaneously improving the low safety for electric scooters, which will in turn promote more people to adopt electric scooters for daily commute. For new, we have a great first-mover advantage by being the first and the largest lithium-ion-based scooter brand in China. Now outside of China and especially Europe, we’re seeing governmental support, so electric scooters was a variety of subsidies to lessen the purchase price. For example, France provided €900 of subsidy, Spain provided up to €750. So those continue to help the electric transformation in the two-wheeler globally. Now we continue to execute our core strategy in the fourth quarter last year throughout three key pillars. So those are, the first one, develop premium hit products that offers a great riding experience for urban user globally; second, continue to build a global new brand as the lifestyle urban mobility brand through an innovative yet cost efficient marketing and branding activities; and three, rapid expansion of our sales network globally at low costs. Well, first, we launched all new product line of NGT, M+ and UM in June and August 2018, so as a result our Q4 R&D effort many focus on 2019 products which we’re planning to launch soon. In addition to 2019 new product R&D, we have also operated existing product lines to improve the user experience. In late August, we operated of a new series with the enhanced value solution to extend the riding distance from a single charge. So this upgrade builds upon extensive research on our battery and the riding data. And in October we made a performance upgrade to our M+ model by adding several driver assisted functions to the entry level model based on users’ interactive feedback. So both those upgrades not only improved industry expectation, but also allows us to increase the retail price by 3% to 10% depending on the models. Despite those price increases to the end customer, our demand remains strong and this is reflected in our Q4 sales volume. Besides those major upgrades, we have also [indiscernible] upgrades in Q4 for performance improvements such as more accurate GPS location, better battery management, our users are able to operate their scooter via over-the-air upgrade with our proprietary onboard telematics. So those performance upgrade are based on the aggregated riding data we have collected and analyzed. So by the way, we were very proud that our total cumulative [indiscernible] in China has surpassed 2 billion kilometers in December 2018, just three and a half years since our first scooters hit the road. So beside the [indiscernible] we also actively enhanced our R&D platform to drive long-term innovation. Last week, we finalized and signed the Development Collaboration Agreement with the Volkswagen Group in Europe regarding the development of Micro-mobility solutions. We value the opportunity to work with the Volkswagen and believe this collaboration will bring long-term benefit to both parties. Second, we continued to build new brands as the lifestyle of a mobility brand through an innovative yet cost efficient marketing and branding activities. The IPO in October 2018 was the key milestone that enabled us to build deeper trust with our end users and distributors. We have garnered both domestic and international media attention with more than 600 articles, spanning the likes of Wall Street Journal to Bloomberg to [indiscernible]. So this is the watershed moment for the two-wheeler industry as one Bloomberg article claimed in the title that the electric future will run on two wheels. Also being a user-centric company, we have invited users to our IPO event and have also provided more than 20,000 IPO souvenirs to our existing users, which [indiscernible] $36. Our user also broadcast this on their WeChat [indiscernible] both the PR and their marketing among users have increased our brand awareness tremendously. We also launched our lifestyle product line in December 2018 to promote Niu as the lifestyle brand in the urban mobility market. This includes brand apparel like T-shirts, hats as well as accessories such as notebooks, badges, keychain and mugs. So lifestyle accessories were welcomed by our customers and demonstrated our brand power and the customer loyalty. And third, we continue to grow our sales network rapidly. We increased our store count by 118 and closed the year with a total number of 760 stores, a 70% jump from 2017. Our store network is managed by 233 city partners across 178 cities, up from 215 at the start of the quarter in China. We grew our international distribution as well. We’re selling in 27 countries compared with only 17 countries this time last year. So in 2019, we expect to grow our sales network by opening around 500 new stores in China and enter in new international market such as United States. Now, I will turn the call over to Hardy to discuss our financial results. Hardy?

Thank you, Yan, and hello, everyone. We concluded 2018 on a strong note. Our press release contains all the figures and comparisons you need. In this quarter, we are distributing the financial and operating data in excel format. It is available for download from our IR Web site. During my talk, keep in mind that we are referring to the fourth quarter figures unless I say otherwise and that all monetary figures are R&D unless otherwise noted. Revenue growth was driven by both scooter volume and the price increases. Scooter volume growth was primarily driven by three factors; new store openings in China, more product offerings and strong orders from international markets. We opened 118 new stores in China bringing the total number of stores in China to 716 versus 440 stores at the end of 2017. The three new products launched during 2018, including the NGT, M+ and UM, contributed 36% of the total unit volume and were the key drivers of volume growth. International volume was particularly strong, more than tripling due to the orders on the new NGT and M+. International unit volume contributed 6.3% of the total compared with 3.4% a year ago. International sales will continue to play an increasingly important role in our growth strategy. I should note that scooter sales in both China and the international market are seasonal. In China, naturally summer sales in Q3 are peak season whereas winter sales in Q1 are the slowest due to weather conditions. Q1 sales in China are also impacted by the Chinese New Year holiday. International markets are impacted by winter weather, the Christmas holiday and the lead time required for shipment from China. Please keep that in mind as you observe our sequential revenue pattern over coming quarters. The increase in net revenue for scooter was mainly driven by our pricing actions and the product mix change. In January 2018, we increased the price on many models across N, M and U series. In August, we raised the prices of certain models in the U series. And in November, we raised the price of certain products reaching top line. The price increases were introduced together with performance upgrades in order to maintain a competitive value proposition. The net revenue per scooter increase was also helped by the higher percentage of volume from international markets where our prices are higher than those in China. Gross margin was 13.5%, 9 percentage points better than this time last year and 1.1% better sequentially. The better operability [ph] was due to price increase and a higher proportion of international sales which had a higher price and higher gross margin. Compared to last year, the proportion of international scooter sales more than doubled to 14.5% of total scooter revenue. The sequential gross margin improvement was highly muted by a higher rebate to distributors due to sales volume being higher than expected. Our distributors received additional rebate of 1% to 2% once their orders exceed to full year targets. Operating expenses increased in line with the growth of our business. G&A expense grew due to the cost of meeting regulatory requirements as a public company. Sales and marketing expenses grew as rate invested in branding activities together with IPO event in October. We also ramped up R&D spending to accelerate product portfolio growth. We believe that this investment in branding and R&D are smart spending as they will attract growth in the quarters ahead. Despite higher expenses, we are still seeing meaningful operating leverage. As a percentage of net revenue, operating expense including the share-based compensation was 15.4% below the 17.4% we saw last year. Our GAAP net loss was 32 million which includes 24.8 million of share-based compensation. The share-based compensation was particularly high due to the accelerated vesting of certain restricted ordinary shares triggered by the IPO. Adjusting off the share-based compensation, we had net loss of 7.2 million. The loss was significantly reduced compared with the 27.5 million of adjusted net loss in the fourth quarter of last year. Our balance sheet ended the quarter in solid shape. As of December 31, we had cash, term deposits and short-term investment of 717 million. Our operating cash flow was a negative 144 million due to seasonality and also our management of owning [ph] capital. Specifically, as mentioned earlier, Q3 is the peak season and therefore we have a large balance of a comparable by the end of Q3. [Indiscernible] payables was settled in Q4, a slower season which affected our operating cash flow. Secondly, we have reduced the payment credit days for selected supplier in exchange for lower cost for raw materials and components. This cost reduction should benefit 2019 gross margin. Now let’s turn to guidance. We expect Q1 net revenue to be in the range of 285 million to 305 million. This is lower than Q4 2018 but well above the 173 million we generated in Q1 last year. This represents year-over-year growth of 65% to 76%. Please keep in mind my early comments about seasonality. Third quarter sales are usually our strongest over the year whereas Q1 should normally be the softest. We also expect gross margin to improve when compared to last year. Gross margin in Q1 last year was tough on 70%. Also keep in mind that this forecast reflects our current expectations and is subject to change. With that, let’s now open the call for any questions that you may have for us. Operator, please go ahead.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Your first question comes from the line of Brad Erickson from Needham & Company. Your may ask your question.

Hi, guys. Good morning. Just a few. First, it looks like – just starting with the revenue, it came in pretty materially ahead of your guidance you provided last quarter. It sounds like some of that is related to better orders on the international front. Can you just zero in specifically what trapped ahead of expectations in the quarter just a little bit more granularly?

Sure. Brad, it’s Hardy. I think the revenue was driven higher than early expectation of guidance because of two reasons. One reason is the international sales you mentioned. The international sales were particularly strong because we received additional orders especially for the sharing business model [ph] by the end of November and also early December. This helped us with our Q4 international sales. In addition to that, the PR [ph] sales is also exceeding our expectation because we continue to see solid demand in China. I hope this answers your question.

Yes. That’s great. And then just in terms of channel inventory, just maybe give a quick update how you’re feeling at the moment? And then secondarily to that, you mentioned upcoming product launches as we go through 2019. Talk about any sort of extra inventory management that may have to occur to make room for some of those new products in various channels?

Sure. For the channel inventory, we continue to monitor inventory in two ways. The first way is our APP function. As you know, all of our scooters in China are connected. Therefore, once our consumers and users purchase the scooter, they can active their scooter in our APP. In that way we can track how many scooters were sold. Secondly, our retailers, our dealers, they also report retail volume to us on a daily basis but are not a way for us to tract the China inventory. Based on our data, the China inventory is normally between one month and one half month, a similar level we see in the past few quarters. And your second question was about the new models potential to launch in 2019.

Right.

Brad, this is Yan. So I think that way was looking at – first of all on the channel inventory, given it’s only like a month or month and a half. So typically when you start to launch new models, the inventory of one month wouldn’t be an issue for distributors or retailers. So I think that was the question you had, right?

Yes. That was great. And then maybe just one other if I could. It sounded like you mentioned the higher rebates to the distributors which obviously was a positive because it occurred from higher volume. Maybe could you clarify for us just was that – did that force gross margin a little bit below your expectations? Just wanted to clarify what you meant by that recognizing that the absolute volume came in higher just as a function of the volume upside, but then just want to understand how that translated relative to your gross margin expectations?

Sure. So let me first explain the incentive [indiscernible] incentive plan we have with our distributors. Beginning of each year our distributors receive an annual target, a [indiscernible] target which they need to achieve. Based on that annual target, they can receive a certain level of rebates. But on top of that target we give them two other targets, more stretched target and if they are able to achieve that stretched target, they can receive additional 1% to 2% of rebate. And that 1% to 2% is linked to the annual volume, not quarterly volume. So in Q4, a few of our bigger distributors, they are very close to achieving the stretched score and we see strong orders on those distributors. And after they achieved the stretched score, as I mentioned, they receive 1% to 2% additional rebate. And the impact of rebate on our financials are two ways. First, it reduced our net revenue. Because of additional rebates we gave to distributors, our net revenue was less. Secondly, it has negative impact on our net margins. So based on our own estimate, the impact on the margin is close to 1.5% because of additional rebates we gave to distributors. Without the additional rebates, we could have achieved higher gross margin in the last quarter last year. I hope this answers your question.

That’s great. Super helpful. And then maybe one more if I could. Just on VW announcement, that seems pretty noteworthy. I know it’s early. I think you said you announced it or just signed it last week. But maybe just offer a little bit of color of how you’ll be working with them? We saw the note in the press release, but just would be curious to understand a little bit more in terms of how you’ll be working with Volkswagen here going forward? Thanks.

Yes, let me first comment and then maybe Yan can add later. First of all, even though the agreement was only recently signed, we have been working with them in the past few months. And this is a Development Collaboration Agreement with indefinite collaboration period. So both parties does have a lot of intention to cooperate with each other in the longer term. However, for the specific content we cannot disclose because we definitely – we will probably have a very strict rule on the confidentiality and also publicity. Therefore, only when we have some concrete plan, when we have agreement with VW, we can release additional information to the public.

That’s great. Thanks very much.

Thank you.

[Operator Instructions]. Thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Li for closing remarks.

Well, thank you everyone for dialing in the call. We’ll continue to work hard and expect to talk with everyone in the next quarter earnings.

Thank you all, again. This concludes the call. You may now disconnect.