Ladies and gentlemen, thank you for standing by, and welcome to Niu Technologies' Q1 2024 earnings conference call. At this time, all participants are on mute. Later, we will have a question-and-answer session, and instructions will follow at this time. As a reminder, we are recording the call. If you have any objections, you may disconnect at this time. Now, I'll turn the call over to Ms. Kris tal 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 Niu Technologies' results for the Q3 2024. 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 a 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 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 our 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 the discussion of certain non-GAAP financial measures, and the press release contains the definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial result. 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.
Thank you, Kristal. Hello, everyone. Thank you for joining us today. So, Q3 2024 has marked a quarter that shows continuous growth. In this quarter, our total sales volume was 312,000 units, with a year-over-year increase of 17.5%. Specifically, sales volume in the China market had a year-over-year increase of 12.4% to 259,000 units, and the sales volume in the overseas market experienced a significant year-over-year increase of 50% to 53,000 units. Total revenue in Q3 2024 was RMB 1.02 billion, increased by 10.5% year-over-year. So this quarter's performance highlights the effectiveness of our strategic focus on expanding the product offerings, expanding the sales channels, and expanding the market reach. We have achieved notable growth in both China and overseas markets, reflecting the increased recognition and improved sales.
So as we continue to build on these results, we remain committed to refine our strategy to meet ambitious targets and adapt to market demands. Now, in China, strong feedback on the recent launch of the NQi Series has reinforced our focus on enhancing the core product offerings. Since Q2 2024, the targeted marketing and store expansion increased our market presence, positioning us well for the growth in Q3. However, the sales in Q3 did face a headwind due to a new standard on battery electric system safety, which put in effect at the end of October, and retailers were not allowed to sell electric bicycle products that were not compliant with the new standard. As a result, the sell-in orders from factory to the distributors in September were significantly reduced, and the distributors are focused on clearing the existing channel inventories, which are typically one to 1.5 months.
The execution of the policy also impacted our product mix, as high-priced products were ordered less, which reflected a lower ASP and lower margin quarter over quarter. The sales percentage with ASP over RMB 6,000 dropped by 8.1 percentage points in Q3 compared to Q2. Now, in the overseas market, the micro-mobility segment achieved significant growth, leveraged momentum from expanding the key sales network, and introduced new products tailored for the diverse markets. In the electric two-wheeler segment, we focused on direct distribution operations in priority markets, laying a good foundation for operations and dealer development. Early sales and marketing events already showed growth potential.
Now, let me talk about China market in detail. Since this year, we're focused on rolling out key products with clear target consumer groups to drive this growth. In the first two quarters this year, we introduced the NXT to address the premium segment, the M-Play motorcycle, and the UMax electric bicycle to address the Gen Z, the younger generation, and the U1e for the female riders. In Q3, we continued to unveil two electric bicycles, the NT to address the Gen Z and MT to address the female users. Together, those new product launches this year contributed to more than 50% of total units sold in 2024. To continue to address the premium users and Gen Z users in the motorcycle market, we released two more electric motorcycle lines recently: the our most premium NX high performance motorcycle and the falcon style design FX motorcycle.
The NX motorcycle is our most premium series with two models, the NX Hyper and the NX Ultra. As the new most premium series, the NX lines combine powerful performance, advanced safety, and intelligent systems. The NX Hyper is the new flagship electric motorcycle designed for the performance enthusiasts and tailored for track racing, powered by a 10 kW motor with a peak output of 29 kW. It reaches a top speed of 135 km/h . Its inverted titanium-coated front forks and adjustable nitrogen rear shocks provide exceptional stability and comfort in rugged terrain. With racing mode dynamics, a 42-degree lead angle, and the dual disc brakes with a four-piston caliper, it ensures precise control and maximum safety. Priced at near RMB 30,000 , the NX Hyper combines cutting-edge technology with race-ready agility.
Now, the NX Ultra, equipped with a robust 5-kW motor at a top speed of 100 km/h, offers a range of up to 130 kilometers on a single charge. This caters for both daily commute and weekend getaways, as the entry-level top-speed motorcycles. The NX Ultra is priced at RMB 18,900. Now, with the top performance of the NX series, we have gone extra mile to ensure rider safety. The NX motorcycle is the first electric two-wheeler in China to earn a five-star fire safety certification from the China Merchants Vehicle Research Institute. It passed rigorous tests for electric fire protection, impact resistance, and water immersion. This achievement highlights Niu's dedication to advancing e-mobility safety standards.
Now, since the NX Hyper and NX Ultra represent our highest performance releases, we celebrate their debut with the innovative Track Test Drive event in Beijing, joining over 100 top media outlets and influencers. This event not only showcased the exceptional performance of our product but also significantly boosted community engagement, with content around NX Track Test Drive event gathering more than 52 million views across all platforms. The Double 11 Shopping Festival was also a good first testament for our NX product in this market. During the online shopping sales, we achieved top ranking across major e-commerce platforms, with NX Hyper and NX Ultra standing as the best sellers in its own category.
Now, during this quarter, we also introduced the FX series for the Gen Z consumers as the mass premium motorcycles for practical use. The FX series includes three models, all featuring the same sleek design. The FX series boasts an F-Line family aesthetic with eagle-eye headlights, adding sophistication to this high-performance lineup. The Pro version is equipped with 45 amp-hour batteries, the 1,500-watt motor, and top speed at 55 km/h, with an impressive dry range of 130 km. Designed for urban commuting, the FX series combines powerful features with the advanced safety system, extended battery life, and smart integration via the Ok Go map for enhanced convenience control. The FX series is priced from RMB 5,500 and above.
Now, as this product is designed for Gen Z users to connect more deeply with the e-gaming community and the younger audience, we launched this FX product along with a co-branding initiative with the popular game PUBG Mobile with 200 million plus users. We introduced exciting co-brand collaborations in the FX product series through a range of online and offline events, including Douyin product launch, campus event, e-gaming tournaments, and influencer promotions. Overall, the campaign achieved over 920 million views across social media, influencer engagement, and target markets.
Now, in terms of channel profitability and channel expansion, as we discussed earlier this year, our first focus is on channel health, especially store profitability, with the goal of reversing the trend of store closures over the past two years and preparing for future expansion. To achieve this, we concentrate on improving same-store sales by significantly enhancing our online to offline operations, driving sales leads from the online platform to our physical stores to increase foot traffic. In addition to traditional platforms like JD and Tmall, we also increased our investment on Douyin, Kuaishou, Xiaohongshu, and Meituan. Online sales leads account for more than 50% of store sales for the first three quarters, marking a significant increase compared with less than 30% in the same period last year.
We have also made a substantial investment in training our stores for Douyin and Xiaohongshu operations, including creating accounts for each store and providing livestream training to enable them to generate online leads. As a result, we achieved over 33,000 livestream sessions, generating RMB 115 million GMV in the first three quarters, with 18,000 live sessions in Q3. Now, with the launch of new products and improved store profitability, we have successfully reversed the previous trend and began expanding our sales network. In Q3, despite being a traditional slow period for store openings, we were still able to add 240 new stores to expand our sales network.
Now, let me turn you to the overseas market. This quarter demonstrated strong growth and strategic advancements in our overseas market. In the micro-mobility segment, leveraging a strong product portfolio, we were able to expand more retailers and achieve over 50% year-over-year sales volume growth. Now, for the electric two-wheeler market, we focused on direct sales operations in the key market and unveiled new products during our 10th anniversary at EICMA this November. Those product launches, along with business development events and branding marketing activities, helped us to build a solid foundation for strong growth. Now, in terms of micro-mobility, since the beginning of this year, we have focused and concentrated on retail channel expansion in the key market. In the U.S. market, we worked with Best Buy entering all 800 stores in North America. Additionally, we've been working with Walmart, Kohl's, Macy's, Target, and Home Depot.
In Europe, in addition to the current retail network of MediaMarkt, we also entered one of the leading retail chains, Unieuro, in Italy, having our kick scooter product placed in their 300 stores. Now, to further benefit from the already established sales network, we have expanded our product portfolio. We launched a KQi 100 series this quarter, featuring KQi 100S and KQi 100P. This series brings a quality performance and entry-level price starting at $299, making it an affordable yet powerful choice for urban mobility. Features include the Dual-Tube hydraulic suspensions with 29 km dry range and top speed up to 25 km/h .
Now, on the kick scooter side, the recent increase in the U.S. tariff on the kick scooters from 0% to 25% starting in June has temporarily eroded margins, leaving a negative gross margin for products shipped to the United States in Q3 and part of Q4. To address this, we have initiated a process to start production of the U.S. version in Southeast Asia to address the tariff situation. However, due to the complexity of supply chain adjustments, we expect to see the first manufacturing product out of Southeast Asia be shipped in early 2025. Now, for electric two-wheelers, in the first three quarters, we focused on establishing direct distribution operations in key markets. By Q3 this year, we completed the first phase of operations set up in Europe, including the dealer network development, financing for dealers, logistics, after-sales support, as well as the team set up.
Now, we have operations covering Italy, Germany, and France. Recently, we recruited over 100 dedicated dealers into our European sales network and plan to double this number by the first half of 2025. Now, with the operations set up in place, we introduced key electric motorcycle products at EICMA this year. In the motorcycle segment, we launched the NX series, the international version of our NX premium products, with price ranges from EUR 3,000 and beyond. We also unveiled the FQi series, the international version of our F series, starting with FQi 500. It features a 5,000-watt motor capable of speeds up to 95 km/h and a dry range of 91 km. Advanced safety features such as CBS brakes and high-pressure monitoring enhance the rider confidence. Starting at around EUR 3,000, the FQi series offers a combination of eco-friendly, high-tech design, and robust performance.
Additionally, we upgraded our XQi3 and offered a motorcycle equivalent OTA update that boosts the power to 10.6 kWs, improved acceleration, and reaches a top speed of 80 km/h. Priced at $4,000, the XQi 3 made a high-performance dirt bike more accessible. Now, new product releases have generated extensive media and influencer coverage at EICMA. The leading industry outlets such as Electrek, Motor News, Moto, Gazzetta Motori cover our EICMA launch just days after the events, and online channels were featured by KOLs with millions of followers, and the content about our new products has driven a significant online engagement since its release. During EICMA, we also hosted our largest new connect event, inviting around 200 partners, dealers, and distributors to join us in unveiling our new products.
At this event, we also launched a dealer expansion project for 2025, targeting doubling the dealers by the first half of 2025. Now, we are towards the closing of the year 2024. We have strategies planned for the last quarter of this year to build a solid foundation for 2025. We plan to ride on growth momentum in the product development and sales expansion to drive the growth. In the China market, we're well-positioned with a product portfolio that spans a wide range of market demands, from daily commuters, electric bicycles, to high-performance motorcycles, with price ranging from RMB 3,000 up to RMB 30,000. Our product caters a diverse customer base, including young people, the Generation Z, the female users, the daily commuters, and motorcycle enthusiasts. We plan to build our existing portfolio with upgraded products and new designs that comply with China's new standards.
Now, along with the improvement of our product portfolio, we have also strengthened our brand image as a premium brand. With the introduction of the NX Series, we have elevated the product performance to a new level. The premium NXT electric bicycle series, equipped with cutting-edge smart technologies such as millimeter-wave radar for collision detection, navigation projection system, represents the most advanced smart electric bicycles in its class. And on the sales channel expansion front, we plan to accelerate store expansions in Q4 and Q1 2025, targeting over 1,000 stores to establish a solid foundation for growth in 2025. Additionally, our expansion effort will focus on Tier 3 cities and Plus, where we have historically been underrepresented due to lack of the right product. Now, in the overseas market, the new strategy for 2025 focuses on driving robust growth across both micro-mobility and the electric two-wheeler market.
For micro-mobility, we plan to continue to expand our retail presence, supported by enhanced product lineup. Production in Southeast Asia will also help to mitigate tariff challenges and accelerate growth in the US market. Now, in the electric two-wheeler segment, we'll leverage the new product launches like the NX and FQi series to cater to urban commuters, with a strong focus on direct sales in the core market. Driven by those new products and the momentum in EICMA, we plan to significantly expand our dealer network in those key markets, laying a solid foundation for the growth in next year. Now, with that, let me turn the call to Yan.
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 third-quarter figures unless I say otherwise, and all monetary figures are in RMB, not specified. As Yan just mentioned, our total sales volume for the Q3 was 312,000 units, up 17.5% compared to the same period of last year. 259,000 units were sold in China, while the remaining 53,000 units were sold overseas. Over 60% of our sales volume in China came from the new products launched this year. The total revenues for the Q3 amounted to RMB 1.02 billion, up 10.5% compared to the same period of last year.
China revenues were RMB 880 million, accounting for 86% of the total revenue. Of this, the scooter revenue was RMB 797 million, up 12% year-over-year due to the increased sales volume of e-scooters. China's scooter ASP was RMB 3078, remained flat year-over-year, and quarter-over-quarter down 12%. The high-end lead-acid models that command similar ASPs to Lithium-ion models accounted for nearly half of the sales volume in China this quarter. A quarter-over-quarter decline was primarily driven by a narrowing of the retail price range from RMB 4,000 to 6,000, down from the previous RMB 4,000 to 8,000. Despite this adjustment, our product price remained significantly higher than the industrial average level. The overseas revenues were RMB 144 million, accounting for 14% of the total revenue.
The scooter revenue, including e-motorcycles, e-mopeds, kick scooters, and e-bikes, amounted to RMB 130 million compared to RMB 122 million in the same period of last year. This growth was mainly due to an increase in the sales of the kick scooters, partially offset by the decline of the revenue per scooters. Of this, the micro-mobility revenues were around RMB 114 million, up 6% year-over-year. The overseas scooter ASP decreased from RMB 3,430 to 2,444 year-over-year, primarily due to a shift in product mix and old model discounts that impacted kick scooters ASP. In the Q3, our entry-level kick scooter with the lower price and lower margin, as Yan just mentioned, the KQi 100, accounted for over 30% of the sales, replacing the higher price and higher margin KQi2 and KQi3 models, which dominated in the prior quarters.
Additionally, the rollout of the new models KQi 100 and KQi 300 led to discount sales of the old models KQi2 and KQi3, especially online sales this quarter, and the revenue from accessories, spare parts, and services amounted to RMB 96 million, a 2% increase compared to the same period of last year due to the increase of the spare parts sales in China. Gross margin for the Q3 was 13.8%, 7.6 percentage points lower than the same period of last year and 3.2 percentage points lower than the previous quarter. The declining gross margin was driven by the following factors. In our international market, fast-growing sales of KQi 100 model and promotional sales of the old models lowered the overseas margins compared to last quarter and the same period of last year.
Additionally, starting from June, a 25% of the U.S. tariff on nearly half of our kick scooter sales further reduced our overseas margins, and these two reasons both made the quarter-over-quarter gross margin decrease. While in China, we continue to allocate part of our margins to our domestic distribution partners to reward their loyalty, which drove further year-over-year decline. Talking about the operating expenses, the third-quarter OpEx was RMB 201 million, representing a 31% decrease compared to the same period of last year, and the total OpEx ratio decreased from 31% to 20%. Selling and marketing expenses were RMB 128 million, up 5% year-over-year, primarily due to the increased promotions in kick scooter new models. Selling and marketing expenses, as a percentage of revenue, went down from 13.2% to 12.5%.
R&D expenses amounted to RMB 30 million, down nine million year-over-year, mainly due to a decrease in staff cost and share-based compensation and sample expenses. The R&D expenses, as a percentage of revenue, went down from 4.2% to 3%. G&A expenses were RMB 43 million, down RMB 84 million year-over-year, mainly due to a decrease in the allowance for doubtful accounts that we made credit loss provision for our European distributor in last quarter three. G&A expenses, as a percentage of revenue, went down from 13.7% to 4.2%. In the Q3, we had a net loss of RMB 41 million with a net loss margin of 4% under GAAP accounting compared to a net loss of RMB 79 million for the same period of last year. Turning to our balance sheet and cash flow, we ended the quarter with RMB 1.3 billion in cash, restricted cash, term deposit, and short-term investment.
Last quarter, this amount was the same, and the last year-end was RMB 1.1 billion. CapEx for the Q3 was outflow RMB 41 million, reflecting an increase of RMB 14 million compared to the same period of last year, and this can be attributed primarily to an increase of the new stores in China. And now, let's turn to guidance. We expect the Q4 revenue to be in the range of RMB 622 million- 718 million, an increase of 30%-50% year-over-year. 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 subject to change due to the uncertainties relating to various factors, and with that, we're now open for 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. To ask a question, please press star one one on your telephone. You would enter an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, that's star one one for questions. We will now take our first question from the line of Yating Chen from CICC. Please go ahead, Yating.
Good evening. I have three questions about the new standard on e-bikes. New standard is that we have to do domestically distributed and remove e-bikes according to the requirements of the country release of the new national standard. How do you expect the trend of the domestic and selling price?
Yating, can you repeat your question one more time because there is a noise around?
Okay.
I beg your pardon, Yating, your line is disrupting. So if you're using a handset, can you please pick it up? Thank you.
We have seen the domestic average selling price per unit dropped quarter over quarter. But considering the release of the new national standard, how do you expect the trend of domestic average selling price?
Yeah. So if you look at, I think in general, we expect from at least from the average sales, the ASP per unit with the new standard coming out next, well, basically later this year, but effective will be next year, I think the ASP will go up because some of the new standard require us to use new materials. Can you hear me?
Okay. Thank you. And my second question is that how do you see the trend of gross margin?
Yeah. I think in Q3, our gross margin is hitting sort of the lowest point this year because there were double hits. One is actually with the international kick scooter, especially to the U.S. market. It's actually a negative margin. But the fact we still have to continue operation because we're already in the retailers. It's difficult not to ship the product to the retailers. So that was a hit. And the second on the China side, I think, as I just mentioned, that partially because our product, the percentage of product sold for the with the ASP, RMB 6,000 beyond that percentage shrink a bit because with this new battery safety standard. I think we're looking at the gross margin should start recovering Q4 this year, and it will continue to rise next year, partially due to three things.
One, I think some of the cost reduction or cost-saving initiatives, especially on the bottom cost, some of those are not completely reflected. We start some of the initiatives basically in early Q3, but for them to truly reflect it in the financials, they usually take at least three months to four months. So that's on the cost savings. And second, with the product mix, we expect that the high-priced product percentage will come back up in Q4 and Q1, especially in 2025. And that will allow us to actually recover a bit gross margin on the China side. On the international side, I think the gross margin for kick scooter for Q4 is still going to be relatively low because shipment from the Southeast Asia manufacturing wouldn't happen until basically January next year.
So on Q4, we'll still suffer a little bit negative gross margin on the kick scooter side. But coming to Q1 in 2025, with the manufacturing start happening in Southeast Asia, we expect the gross margin to come back to sort of the normal range. And with those, I think the international gross margin will cover in Q1 next year. The China gross margin, you will start to see the recovery Q4 this year.
I understand. Thank you. My last question is about kick scooters. Could you please share the sales volume of kick scooters overseas in the first three quarters? And do you have an outlook for its sales volume next year at present? Thank you.
I think for the kick scooters, I mean, so far, we have something around 120,000-130,000, slightly above 120,000 units for the first three quarters. So we expect to finish the year probably somewhere around 160,000-170,000 units. We could go more, but actually, we decided to reduce the volume, especially for the U.S .market, just to have enough for the U.S. market for the Black Friday and to satisfy the retailers' needs, but not aggressively. Yeah. Not aggressively shipping products to the United States because of the tariff situation. Now, I think for next year's, we look at on the kick scooter. At least if you look at this year, kick scooter market growth from last year, we probably had a roughly volume growth like 60%. We're looking at next year, probably somewhere around 50%-60% growth. So continue we'll maintain a growth rate for next year.
Thank you. Thank you very much. That's all my questions.
Thank you. As a reminder, to ask a question, please press star one one on your telephone keypad. Once again, that's star one one for questions. Thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Li for closing remarks.
Thank you, Operator, and thank you all for participating on 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.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.