 -- Second Quarter Total volume of e-scooter sales up 61.2 year over year --Second Quarter Revenues of RMB 644.9 million, up 21.6 year over year-- Second Quarter Net income of RMB 56.8 million, compared with RMB 51.0 million in the second quarter of last yearBEIJING, Aug. 17, 2020 GLOBE NEWSWIRE -- Niu Technologies NIU, or the Company NASDAQ: NIU, the worlds leading provider of smart urban mobility solutions, today announced its financial results for the second quarter 2020.Second Quarter 2020 Financial Highlights Revenues were RMB 644.9 million, an increase of 21.6 year over year Gross margin was 23.0, compared with 23.7 in the second quarter of last year Net income was RMB 56.8 million, compared with RMB 51.0 million in the second quarter of last year Adjusted net income non-GAAP1 was RMB 67.8 million, compared with RMB 54.1 million in the second quarter of last yearSecond Quarter 2020 Operating Highlights The number of e-scooters sold reached 160,138, up 61.2 year over year The number of e-scooters sold in China reached 154,959, up 81.0 year over year The number of e-scooters sold in the international markets reached 5,179, down 62.3 year over year The number of franchised stores in China was 1,084, an increase of 51 since March 31, 2020 International sales network expanded to 35 distributors covering 45 countriesDr. Yan Li, Chief Executive Officer of the Company, commented: We are very pleased to see the strong recovery in China. Our China sales volume increased by 81 year over year driven by retail network expansion and new product launches. Our international sales decreased in the second quarter due to the continued impact from COVID-19. Since May, our overseas dealer shops gradually reopened and we expect to see recovery in the coming quarters. In light of the prospective volume growth, the Company made prepayment in May to acquire land use right of a new piece of land for future capacity expansion. Despite lower international sales and price discounts offered during new product launches, our gross margin reached 23 as a result of our continued cost optimization initiatives.Dr. Li continued, In May and June, we launched two new models under Gova series, the G0 and G2. The Gova series is targeted at the mid-end e-scooter market, representing good value for money and high quality. The design language is differentiated in comparison to our main e-scooter lines. Both products were well received by the customers and we sold more than 26,000 units of these two products during the second quarter. In July, we launched MQiS, another new model under the MQi series. The MQiS inherits the design language of MQi series of being classic and fashionable. This model complies with the new national standard of electric bicycle in China. We are very excited about the enriched product portfolio and look forward to the continued growth of our business. Second Quarter 2020 Financial ResultsRevenues were RMB 644.9 million, an increase of 21.6 year over year, due to higher sales volume of 61.2, partially offset by decreased revenues per e-scooter of 24.6.Revenues in RMB million 2020 Q2 2019 Q2 change YoY E-scooter sales from China market 522.7 329.7 58.5 E-scooter sales from international markets 56.9 121.7 -53.2 E-scooter sales, sub-total 579.6 451.4 28.4 Accessories, spare parts and services 65.3 79.1 -17.4 Total 644.9 530.5 21.6 Revenues per e-scooter in RMB 2020 Q2 2019 Q2 change YoY E-scooter sales from China market2 3,373 3,851 -12.4 E-scooter sales from international markets2 10,995 8,850 24.2 E-scooter sales 3,619 4,543 -20.3 Accessories, spare parts and services3 408 796 -48.8 Revenues per e-scooter 4,027 5,339 -24.6 E-scooter sales revenues from China market were RMB 522.7 million, an increase of 58.5, and represented 90.2 of total e-scooter revenues. The increase was mainly driven by retail network expansion and new product launches in China. E-scooter sales revenues from international markets were RMB 56.9 million, a decrease of 53.2, and represented 9.8 of total e-scooter revenues. The decrease was mainly driven by lower sales volumes in the international markets due to the adverse impact from COVID-19. Accessories, spare parts sales and service revenues were RMB 65.3 million, a decrease of 17.4 and represented 10.1 of total revenues. The decrease was mainly due to lower spare parts sales from international markets. Decreased revenues per e-scooter was mainly driven by lower proportion of revenues from international markets, the launch of new product G0 which has a lower sales price compared with other models, and price discounts offered during new product launches.Cost of revenues was RMB 496.9 million, an increase of 22.7 year over year, mainly due to higher e-scooter sales volume. The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, was RMB 3,103, down 23.9 from RMB 4,076 in the second quarter 2019 mainly due to change in product mix and lower raw materials cost.Gross margin was 23.0, compared with 23.7 in the same period of 2019. The decrease was mainly due to a lower proportion of e-scooter revenues from international markets and a lower proportion of revenues from accessories, spare parts and services, but partially offset by cost savings on raw materials and components.Operating expenses were RMB 92.6 million, an increase of 13.9 from the same period of 2019. Operating expenses as a percentage of revenues was 14.4, compared with 15.3 in the second quarter of 2019. Selling and marketing expenses were RMB 45.6 million including RMB 2.9 million of share-based compensation, a decrease of 3.1 from RMB 47.0 million in the second quarter of 2019. The decrease was mainly due to the decrease in advertising and promotion expense of RMB 3.9 million, staff cost of RMB 1.1 million and travelling and office expense of RMB 0.6 million. The lower expenses were partially offset by the increase of depreciation and amortization expense of RMB 2.4 million which was due to opening of new franchised stores, and by the increase in share-based compensation expenses of RMB 1.9 million. Selling and marketing expenses as a percentage of revenues was 7.1 compared with 8.9 in the second quarter of 2019. Research and development expenses were RMB 24.0 million including RMB 3.1 million of share-based compensation, an increase of 43.5 from RMB 16.7 million in the second quarter of 2019, mainly due to the increase in staff cost of RMB 3.0 million, the increase in share-based compensation expense of RMB 2.7 million and the increase in design expense of RMB 1.1 million due to increased new products development efforts. Research and development expenses as a percentage of revenues was 3.7, compared with 3.1 in the second quarter of 2019. General and administrative expenses were RMB 23.0 million including RMB 4.7 million of share-based compensation, an increase of 31.0 from RMB 17.6 million in the second quarter of 2019, mainly due to the increase in share-based compensation expense of RMB 3.1 million and taxes and surcharges of RMB 2.4 million. General and administrative expenses as a percentage of revenues was 3.6, compared with 3.3 in the second quarter of 2019.Operating expenses excluding share-based compensation were RMB 81.9 million, increased by 4.6 year over year, and represented 12.7 of revenues, compared with 14.8 in the second quarter of 2019. Selling and marketing expenses excluding share-based compensation were RMB 42.7 million, a decrease of 7.2 year over year, and represented 6.6 of revenues, compared with 8.7 in the second quarter of 2019. Research and development expenses excluding share-based compensation were RMB 20.9 million, an increase of 28.4 year over year, and represented 3.2 of revenues, compared with 3.1 in the second quarter of 2019. General and administrative expenses excluding share-based compensation were RMB 18.3 million, an increase of 14.6 year over year, and represented 2.8 of revenues, compared with 3.0 in the second quarter of 2019.Government grants were RMB 0.8 million, decreased by RMB 1.7 million from the same period of 2019.Share-based compensation was RMB 10.9 million, an increase of RMB 7.8 million from the same period of 2019. Net income was RMB 56.8 million, compared with RMB 51.0 million in the second quarter of 2019. The net income margin was 8.8, compared with 9.6 in the same period of 2019.Adjusted net income non-GAAP was RMB 67.8 million, compared with RMB 54.1 million in the second quarter of 2019. The adjusted net income margin4 was 10.5, compared with 10.2 in the same period of 2019.Basic and diluted net income per ADS were RMB 0.76 US 0.11 and RMB 0.73 US 0.10 respectively.Balance Sheet As of June 30, 2020, the Company had cash and cash equivalents, term deposits and short-term investments of RMB 1,018.2 million in aggregate. The Company had restricted cash of RMB 176.8 million and short-term bank borrowings of RMB 180.0 million.Recent Development In July 2020, NIU sold 70,685 e-scooters, representing a 63.7 year-over-year growth. The number of e-scooters sold in China market reached 67,883, representing a 64.1 year-over-year growth, despite adverse weather conditions in certain parts of China. The number of e-scooters sold in the international markets reached 2,802, representing a 56.1 year-over-year growth. Business Outlook NIU expects revenues of the third quarter 2020 to be in the range of RMB 850 million to RMB 950 million, representing a year-over-year increase of 30 to 45. 