China’s fourth largest e-scooter maker forecast revenue growth of 40% to 60% this year, as its move into electric motorcycles and expanded store network gain traction
Key Takeaways:
- Niu Technology reported its revenue fell 17.4% in the fourth quarter, as it fell into the red with the implementation of tougher standards for e-bikes in China
- The company forecast a return to strong growth this year, following an overhaul including a shift towards higher-end models and a big expansion of its retail network
By Doug Young
You know things might not be so rosy when a company’s chief refers to its most recent year as a time of “continued strategic transformation,” which was how CEO Li Yan described 2025 for e-scooter maker Niu Technologies (NIU.US) on its latest quarterly earnings call. Truth be told, the fourth quarter of 2025 was the most punishing for Niu, which, like its peers, suffered sharp sales declines in China as the country implemented tough new standards for e-bikes.
The fourth-quarter sales plunge, which saw Niu’s revenue fall 17.4% year-on-year to 676.2 million yuan ($98.2 million) in the final three months of the year, resulted in an 88.1 million yuan loss for the period, according to its fourth-quarter report. That wiped out Niu’s 48.7 million yuan profit in the first nine months of the year, leaving it with a 39.4 million yuan loss for the whole year.
But Li was quick to note that implementation of the new rules led to a buying bulge in the third quarter ahead of the changes. He said a better indicator was the entire second half of the year, when the company’s China deliveries rose 38% year-on-year. What’s more, the company gave a very rosy outlook for 2026, including 30% to 50% year-on-year revenue growth for the first quarter, and even stronger 40% to 60% growth for the full year.
But investors weren’t interested in all those positive stories, and seemed to focus on the big fourth-quarter declines, which included not only a 15.7% drop in Niu’s China revenue, but a much larger 58.3% plunge in its international revenue. The stock tumbled 8.2% the day of the report’s release. It had previously rallied 36% this year, probably on hopes for a better fourth-quarter report. But it has tanked around 30% from a March 11 peak, wiping out all of this year’s gains and more.
“We see 2026 as a year defined by strategic acceleration across our entire diversified portfolio,” said Li. “Our groundwork in 2025 has set the stage for significant scale in both our domestic and international operations.”
The “groundwork” Li referred to covers a number of steps, including the company’s recent move to add electric motorcycles as it tries to diversify beyond its older focus on e-bikes, which travel at slower speeds. The company rolled out its FX Windstorm line of electric motorcycles last year, with speeds of up to 80 kph, and the product quickly gained traction to account for 23% of the company’s annual sales.
In addition, Niu is shifting its marketing to focus more on younger buyers, particularly from Gen Z, away from the older demographics that are more typical buyers of e-bikes in China. It has also boosted its network of franchised stores in China, which finished the year at 4,540, up 22% from the 3,753 at the end of 2024.
Last but not least, the company is also overhauling its international business model to move away from distributors to more direct relationships with retail partners. Niu blamed that shift for the big decline in its international sales in the fourth quarter. But truth be told, Niu and its peers have always had a difficult time in the international market, and we’ll need to see some improving numbers before we believe that part of its business can make a meaningful contribution. With fourth-quarter revenue of just 36.3 million yuan, international sales accounted for just 5.4% of Niu’s total for the period.
Crowded market
Niu and its peers are generally thriving in a Chinese e-scooter market whose overall sales rose 29.5% year-on-year in the first half of 2025 to 32.3 million units, according to market consultancy Equal Ocean. Niu is the market’s fourth largest player with about 7.1% of the market, behind leader Yadea (1585.HK) with 28.4%, AIMA (603529.SH) with 15.1%, and TAILG, which applied for a Hong Kong IPO earlier this year, at 12.9%.
Despite their big growth potential, none of the stocks trades at very high price-to-sales (P/S) multiples, reflecting the stiff competition at home and inability of any of the big players to gain much traction outside China. Leaders Yadea and AIMA trade highest with ratios of 0.91 and 1, while Niu lags that pair by quite a distance with a ratio of just 0.37.
The new e-bike standards that caused sales to plummet took effect last Sept. 1, with the sale of non-compliant models officially banned starting on Dec. 1. The new rules were aimed at boosting safety, especially reducing hazards from batteries that catch fire and have resulted in some high-profile building blazes. They strictly limit the use of plastic components, and require stronger fire-resistance for non-metallic materials, as well as tighter controls on the proportion of plastic parts.
While Niu forecast 30% to 50% year-on-year revenue growth in the first quarter, the broader market wasn’t doing too well in February, with domestic e-bike sales down 38% for that month, according to financial media Caixin. But here, we should point out that the Lunar New Year fell in mid-February this year, depressing sales for the entire month, compared with a late January date for the holiday in 2024.
Despite tumbling sales and a drop into the red, one bright spot for Niu in the fourth quarter was its gross margin, which rose nearly 3 percentage points to 15.3% from 12.4% a year earlier. Niu credited that gain on its gradual migration to higher-cost products, including electric motorcycles, which are a less competitive segment of the market and thus tend to carry higher margins. Reflecting that, the company’s revenues per unit sold rose 4% in the fourth quarter.
In our view, Niu’s stock seems to be heavily discounted compared to its larger peers, perhaps because of its smaller size and recent setback in the global market. Unlike its two listed peers, which trade in Shanghai and Hong Kong, Niu trades in the U.S., which hasn’t been the friendliest place for China-listed companies lately. Still, there seems to be some upside potential for the stock after the recent selloff, especially if Niu can post the kind of strong growth it has forecast for 2026.
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