FAST NEWS: Niu’s First-Quarter Sales Zoom Overseas, But Sputter in China on Covid Disruptions

The latest: Niu Technologies (NIU.US) said sales of its electric scooters rose 9.4% in the first quarter of this year to 163,659 units.

Looking Up: The company’s international sales nearly tripled to 14,672 scooters for the quarter from 4,995 a year earlier. It attributed the big jump to popularity of its kick scooters launched in the second half of last year. It sold 9,833 kick scooters in the first quarter, accounting for all the big gains.

Take Note: Niu’s China sales grew by just 3% year-on-year for the quarter to 148,987 scooters from 144,654, far slower than growth in previous quarters. The company said its China sales grew 91.6% in the months of January and February combined year-on-year, but then plunged 24.1% in March due to pandemic-related disruptions.

Digging Deeper: Niu Technologies has been a major beneficiary of the global drive to clean-energy vehicles, especially in its home market where the government has pledged to make China carbon neutral by 2060. Its electric scooter sales in China rose 72.5% last year. But its revenue grew at a far slower 51.6% for the year, reflecting stiff competition in its home market that is forcing it to lower prices. Falling prices caused the company’s gross margin to fall to 22.6% in last year’s fourth quarter from 25.2% a year earlier. The company is just one of many in China that are feeling the effects of the country’s “zero Covid” policy that has resulted in frequent business disruptions due to wide-scale restrictions each time a new outbreak occurs.

Market Reaction: Niu’s stock rose 11% on Monday after it announced the sales figures. It gave back about half of the gains over the next two days, but is still 5% above pre-announcement levels.

Reporting by Doug Young

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