Good day and thank you for standing by. Welcome to the Niu Technologies Second Quarter 2022 Earnings Release Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Wendy Zhao. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to today’s conference call to discuss Niu Technologies’ results for the second quarter 2022. The earnings press release, corporate presentation and financial spreadsheets have been posted on our Investor Relations website. This call is being webcast from company’s IR website as well and a replay of the call will be available soon. Please note today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions and other factors. The company’s actual results 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 include discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and a 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 Yan.

Thanks, Wendy and thanks everyone for joining us on the call today. In Q2 2022, we delivered a mixed result in the China and international markets. Total sales volume was down by 17.4% year-over-year. The total sales volume in an international market were up by impressive 200% year-over-year, reaching nearly 29,000 units, mainly driven by the growth in the new category of kick-scooters. However, the total sales volume in the China market was down by 26.7% year-over-year for China market was severely affected by the COVID-19 resurgence. Now in the China market, COVID infection spiked starting in early April and affected throughout the entire quarter. The lockdown paused pretty much all business operations in cities like Shanghai and severely slowed down the most in others like Beijing. Niu’s sales are highly concentrated in the higher tier cities, which were impacted by the COVID most significantly as top-tier cities account for 35% to 55% of total sales in China market. In addition, the lockdown in Shanghai also caused months of delay in new product development, as our R&D center is based in Shanghai. This has impacted our sales performance in quarter two as well as in Q3 as quite a few key Niu products that are originally scheduled in Q2 were delayed to late August. For the international market, in Q2, sales of kick-scooters continue to grow rapidly in the overseas market, growing by 112% quarter-over-quarter. During the Amazon Prime Day promotions, Niu was ranked one on bestsellers in the kick-scooter categories in Canada, Germany and France and the ranked top three in Spain, U.S. and Italy market. We are excited to see that in less than year since we launched the first kick-scooter product, we have already established our reputation as top sellers in the European, U.S. market online. With the strong performance from online sales, we are also expecting sales ramping up in offline channels as it usually takes more time. As delayed by the COVID, we finally launched 3 new electric bicycle products for China in August, the revolutionary SQi, the new UQi+ and the B2. I will expand on new products in detail. The SQi is positioned as our most high-end product in the China electric bicycle product category with its innovative design and cutting-edge technology in materials. The SQi has a futuristic straddle motorcycle-like look with a clearly cut geometric body, frame and a large 17-inch wheels. It represents an unconventional design for electric bicycles, yet still meeting the China new standard. In order to meet the weight requirements, we adopted a high-performing aerospace magnesium alloy material as a body frame, the first in electric bicycle market. With this unique design, SQi has quickly gained attention from media and users across China. According to some media, the SQi has pushed the product innovation limit in the electric bicycle market. The SQi is priced from RMB8,999 to RMB9,599 and it will be in production in November. We launched a pre-sales campaign on August 2 and within the first 10 days after launch, nearly 9,000 pre-orders were made. Along with the launch of SQi, we also announced the collaboration with Razer, the leading global lifestyle brand for gamers. We released the limited addition of Niu product during their co-branded SQi, which is designed to embody Niu’s innovative design and Razer’s signature logo as Razer’s black color. The 299 limited new Razer SQi were priced at RMB9,999 and all 299 scooters pre-orders were sold out during the launch event in just 2 seconds. We see great synergy in this co-branding as they put together Niu’s unique design with Razer’s gaming. We also launched a co-brand NQiGT as we plan to sell the new cross Razer NQiGT in the overseas market. Now, our U series is one of the two products that has won 07 international design awards in mobility category. The original U1 was released in 2017 and the U+ and US were released in 2019. Together, they accounted for nearly 25% of sales. Although remaining at the top selling series, the design functionalities needed upgrade after 5 years in the market. We launched a brand new UQi+, which inherited design sales of the classic U series, but improved significantly on many aspects, such as the light design, the smart control system and riding economics and additional functionalities for personalization. The new U+ user – uses the hallow halo light, the first of its kind in the industry, making it easier recognizable riding on the street. It has two additional side taillights compared with the previous version make it safer to ride in the dark at night. This is compatible with our upgraded intelligence system, the OkGo! which enable complete senseless control. Users can start a scooter open the seat box and storage box with just their cell phones in the pocket. In addition, the new OkGo! features now can be activated with Siri, which users can start and control scooter with Siri voice commands. The upgraded intelligence system made the new U+ a most user convenience cooler to right around. In terms of riding economics, we also improved the seating and decking design to make riding more comfortable. The new U+ has increased the legroom and lowered the seat height make it comfortable for users with various heights. The new UQi scooter has a drive range up to 95 kilometers on one charge. Now, the biggest highlight on the design of the new UQi+ as interchangeable exoskeleton frame and the magnetic panel on the side, opening up countless possibilities for personalizations. We see many of our customers choose to personalize their scooter parts to make their scooter represent their own taste. We believe by opening up the designing and the creation of the decorative parts to our users will further encourage the expression of their unique lifestyle. Now the brand new U+ is priced from RMB5,299 to RMB7,499. The third product we released is our B2, a large electric bicycle for the mid-enterprise range market in China, priced from RMB3,999 to RMB4,999. The B2 comes with a simplistic device style, but with a large form factor. It’s about 20% to 30% larger than our G2 and F2, which were released in 2020 and 2021. The G2 and F2 as part of two series are among the most popular mid-end market product in our portfolio. Together, those two models accounted for 22% of sales in China. The addition of B2 completes the product offering targeting the mid-end market by having a large form factor design with longer depth area and bigger storage box. Large form factor makes it comfortable to ride with, bigger legroom and also enable additional baby seat, making it more practical scooters for daily use. It is also equipped with basic intelligent systems such as GPS locationing, [indiscernible] and the new app access. Now, the three new models covered a wide range of market segments in China, the SQi was unique design reinforce Niu’s brand as the innovation leader in the industry. The new U+ enhanced Niu’s product offerings in the high-end segment and the Niu B2 with the enlarged form factor that enabled practical design completes our product offerings targeting the mass segment. With the potential of those products become not only just Niu’s next flagship product, but also a product that needs market trend. Now along with the new product launches in August, we have organized a series of marketing and branding campaigns via PR, social media, PR collaborations and user events. We have various price release events and invited nearly more than 100 media partners to test ride and to cover our new product launches. And those 100 media events have published more than 200 articles. Now we also – on the social media platform, we collaborate with nearly 60 tech and lifestyle influencers and QRs with large fan bases to create content showcasing our new scooters. The QR generates content together gained more than 170 million views across all platforms after launch. Our product launches have also reached Weibo hotlist on August 2 and August 9 gaining a total of 570 million of use more than 400,000 discussions. We initiated Weibo topic of urban commit with electric scooter is better than driving to introducing our new scooters and it soon become a phenomenon with more than 200 million views. Those huge media exposures served as testimony on the market reactions to our newly launched product, but also further improve our brand image as an innovative leader in the urban mobility market in China. Now turning to the overseas market as our sales volume keeps growing we’ve put in continuous effort in the marketing and to enhance our brand recognition as a global leader in the urban mobility sector. In this quarter, the new product review videos has more than 7 million views on YouTube globally, but also actively participate in vendor exhibitions worldwide making global appearance showcasing our products and brand values. We participate in Electrify Expo, the largest electric vehicle festival in North America in Los Angeles, and we will continue to be an exhibitor at the Electrify Expo throughout 2022. Our products also made its appearance during the bike chat show in London, which is Europe’s biggest independent annual motorcycle show, Niu was among the few exhibitors that exhibited with the electric motorcycle, bringing diversity to the traditional gas-filled motorcycle. With those exhibition and event, we hope to gain global recognition in the industry. Finally, I want to give a prospect on the coming quarters. In the first half of 2022, we faced great challenges, both from the rising raw material prices, especially in the lithium-ion batteries and from sudden COVID resurgence and lockdown in some of the major cities in China. This has impacted our sales volume, created pressure in our gross margin and also caused delay in our new product rollout, as mentioned earlier. For the China market, we remain cautious with the outlook, as we put the 2022 first half behind us and announced three new products, the SQi, the UQi+ and B2 in August, we have received very positive response from market media. Those new products will help to fuel the growth in late Q3 and Q4 2022. Having said that, we remain cautious with the sales rebound in Q3 due to unclear COVID impact and temporary slowdown in retail sales introduced by the lithium-ion battery price hike. The COVID resurgence in various cities has created a temporary impact on our sales with the most recent one in Hainan, which accounted to 4% of sales last year. The short price of lithium-ion battery prices has caused the lithium-ion based scooter to price up across the industry. In Q2, we have increased our product price by average 7%. Now the price increase on the lithium-ion batteries across the industry has also created a temporary lithium-ion scooter demand decline in some of the Tier 2 and Tier 3 cities, where the lead-acid based scooters remain to be a cheaper and more viable alternative. We have observed a temporary trend of user purchasing preferences switching from lithium-ion to lead-acid scooters in some cities like [indiscernible]. However, we expect to returning demand as the price for lithium-ion battery stabilizes to the normal level and new regulations being more strictly enforced. Now for the international market, we continue to be very optimistic with the sales growth, especially in the new category expansion in kick-scooters and e-bikes. For kick-scooters, besides the current K3 and the K2 series, we’re introducing several new series in the second half of this year to complete the kick-scooter product offerings. We also have e-bike models ready for rollout in the coming quarters in the U.S. and European markets. On the channel expansion, we’re actively expanding our off-line sales network. By end of quarter three, we plan to grow our point of sales to nearly 2,000 stores in U.S. and Europe, supporting a robust growth in the sales and preparing for the holiday season. We expect to see sales further ramp-up in the global market as we expand our product portfolio and establish our sales network. Now I’ll turn the call over to Fion, our CFO, to go through our financial results.

Thank you, Yan, and hello, everyone. Before going through the financials, we are pleased to present our inaugural ESG report on the IR website today, highlighting our ESG achievements made over the past several years. While it details the company’s performance in several key areas, including low carbon operations, green manufacturing, technology innovation, cooperate governance, care for employees and cooperation with partners and peers, valuing this report as the symbol of entering to the new chapter of ESG development for Niu, we have been acknowledging our responsibilities as a member of community, and we continue to make conscious contribution to society in a number of ways going forward. While dedicating to economic growth, we also hope to enhance our communication with stakeholders to make a constructive input on environmental protection and low carbon economy promotion. Back to the financial results. 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 reference. As I review our financial performance, we are referring to the second quarter figures on otherwise and that all figures are RMB unless otherwise noted. In the second quarter, we delivered mixed results. Total sales volume fell 17.4% to 209,000 units on a year-over-year basis, out of which 180,000 was from China market, representing a 26.7% decrease year-over-year. We were more exposed to and adversely affected by lockdown in top-tier cities. Unlike peers, our retail network is a lot more concentrated among them, where strict control measures mostly happen. International markets contributed to robust growth by kick-scooters sales ramped up. Total sales volume reached nearly 29,000 units, increased by more than threefold year-over-year, among which kick-scooters sales volume doubled to 21,000 quarter-over-quarter, a record high since it’s launched in the third quarter last year. Meanwhile, e-motorcycles and e-mopeds sales volume reached by nearly 10% to more than 7,700 units. In the second quarter, our total revenue were RMB828 million, down by 12.4% year-over-year, while blended scooter in the ASP increased more than 10% from 3,222 to 3,557 year-over-year. To break down revenues by region, e-scooters revenue generated from China market was RMB597 million, a year-over-year decrease of 21.2%, representing 8.3% of all the scooters revenue. ASP in China market reached to RMB3,309, 7.5% higher year-over-year and 7.7% higher quarter-over-quarter, mainly due to increase in retail prices and a better product mix. Talking now about product mix NIU series and global premium series together accounted for 76.7% of total domestic sales volume this quarter. But GOVA entry series only accounting for 23.3%, the lowest level quarterly since 2021. Overseas, e-scooters revenue grew by 1.5x to RMB146 million, out of which RMB78 million were from e-motorcycle and e-mopeds and RMB68 million were from kick-scooters. Blended ASP of international market decreased by 27.7% year-over-year to RMB5,147, but rose by 14% quarter-over-quarter. It is the combination of kick-scooters and e-mopeds. If we look at them separately, both categories see year-over-year and quarter-over-quarter ASP increases. For e-mopeds and e-motorcycles, ASP rose by nearly 24% year-over-year to over RMB10,000 due to a higher proportion of premium models. For kick-scooters, the better product mix and increase of retail price both contributed to a much higher ASP. Revenues for accessories, spare parts and services were RMB85 million, down 34.6% year-over-year from 13.7% to 10.2% of total revenues. This decrease was due to the same reasons we stated in the first quarter. Rising prices of battery and high freight costs have metered [ph] our international distributors from purchasing spare battery packs, and we perceive it may not recover in the near-term. Gross margin of this quarter was 20.3%, 2.4ppt lower on a year-over-year basis, but 1.2ppt higher than the first quarter this year. Quarter-on-quarter, retail price increase contributed to this 1.2ppt margin increase against the elevating cost inflation this year. While on a year-over-year basis, the 2.4ppt decrease, 1.4ppt was due to the cost pressure, including raw material cost inflation and hiking freight fees. 0.7ppt was contributing to a higher proportion of kick-scooters sales, which have relatively lower margins and the remaining 0.3ppt were from the decline of non-scooter sales contribution to total sales. Our total operating expenses for the second quarter was RMB173 million, 26.4% higher than the same period last year. Operating expenses as a percentage of revenue was 20.9% compared with 14.5% year-over-year. Going into details of our expenses. Total selling and marketing expenses was RMB93 million, RMB24 million higher year-over-year, mainly due the increase on depreciation of new stores opening from the last year. Research and marketing and development expenses were RMB45 million, RMB14 million higher than last year. The majority of the increase was due to RMB10 million higher staff costs, including share-based compensation, RMB3 million of higher design and testing expenses. As we are expanding our product portfolio, we will continue to invest in talent, professionals and other R&D resources to support our technology development. G&A expenses were RMB36 million, RMB1.2 million lower than last year. RMB11 million foreign exchange gain offset by staff cost and provisions resulting in a decline in G&A. Total operating expenses including share-based compensation or non-GAAP expenses were RMB157 million, increased by 25.3% year-over-year and representing 18.9% of revenue. Q2 net income was RMB14.4 million compared with RMB91.8 million in the second quarter of 2021. The net income margin was 1.7% compared with 9.7% in the same period of 2021 and minus 5.1% in the first quarter of this year. Turning to our balance sheet and cash flow, we ended the quarter with RMB861 million in cash, term deposits and short-term investments and RMB189 million restricted cash. Our operating cash flow was negative RMB33 million – RMB73 million, mainly due to a RMB126 million increase in inventories of kick-scooters. Same as the way the consumer electronics from Chinese manufacturers are sold overseas. For kick-scooters, we established overseas warehouses, stock up locally to ensure a fast turnover when orders came in. Capital expenditures for the second quarter was RMB15 million compared to RMB83 million in the same period of last year. Now let’s turn to guidance. Since uncertainty remains over the pace of economic recovery, we expect the third quarter revenue to be in the range of RMB1.17 billion to RMB1.35 billion, an increase of 5% to an increase of 10% year-over-year. For the full year volume guidance, we prudently adjusted the estimate to 1 million to 1.2 million units. Please be aware that this outlook is based on information available as of the date and reflects the company’s current and preliminary expectations, which is subjected to changes due to uncertainties relating to various factors such as the pace of COVID-19 pandemic recovery among others. With that, we will now open the call for any questions that you may have for us. Operator, please go ahead.

Great. Thank you, operator, and thank you all 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.

That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day.