Niu Technologies (NASDAQ:NIU), a leading electric scooter manufacturer, has reported a significant increase in sales and revenue for the first quarter of 2024. With a total sales volume of 129,000 units, the company has seen a 37% year-over-year growth.
Despite this growth, Niu Technologies experienced a net loss of RMB55 million. They have made strategic expansions both in China and overseas, particularly emphasizing the premium segment and expanding retail presence. The company has provided a positive revenue outlook for Q2, with expected growth driven by new product launches and improvements in sales channels.
Key Takeaways
- Total sales volume hit 129,000 units, marking a 37% increase year-over-year.
- Sales in China grew by 31% to 110,000 units; overseas sales surged by 48% to 19,000 units.
- Revenue rose by 21% to RMB504.7 million, with the NXT model contributing significantly in China.
- The company expanded its retail presence to over 1,200 locations globally through partnerships.
- Niu Technologies plans to double its retail footprint by the end of 2024.
- Net loss reported at RMB55 million, an improvement over the previous year’s RMB60 million loss.
- Cash and equivalents stood at RMB1,192 million, an increase from RMB860 million last year.
- Q2 revenue is projected to be between RMB912 million and RMB955 million, a 10% to 20% year-over-year increase.
Company Outlook
- Niu Technologies anticipates continued growth in Q2, primarily from new product launches and channel enhancements in China.
- The company aims to achieve 2x growth in the overseas micro-mobility segment throughout the year.
- Expansion plans include increasing the number of retail stores and selling over 1 million scooter units in 2024.
Bearish Highlights
- The company reported a net loss of RMB55 million for Q1 2024, although this is an improvement from the previous year's loss.
Bullish Highlights
- Significant sales volume growth in China and overseas markets.
- Strong performance of the NXT model in the premium segment.
- Successful expansion of retail channels and partnerships.
- Over 300% growth in scooter activation numbers in Germany during a pilot promotion.
- Establishment of local entities and operation teams for direct distribution to dealers.
Misses
- Despite sales growth, the company incurred a net loss in Q1.
Q&A Highlights
- Niu Technologies discussed plans to add a few hundred retail stores in China in Q2 and more in Q4.
- The company reiterated its target of selling over 1 million scooters in 2024, with a focus on overseas market growth.
- Expectations to reduce selling and marketing expenses as a percentage of revenue in the coming quarters were conveyed.
Niu Technologies' Q1 earnings call reflects a company on a growth trajectory, with a strong emphasis on market expansion and product strategy. While the net loss presents a challenge, the company's strategic moves and positive outlook for the upcoming quarters suggest a commitment to long-term growth and market leadership in the electric scooter industry.
InvestingPro Insights
Niu Technologies (NIU) has shown resilience with a strong sales performance in the first quarter of 2024, revealing a robust demand for its electric scooters. As investors evaluate the company's financial health and future potential, certain metrics and InvestingPro Tips provide a deeper understanding of its market position.
InvestingPro Data:
- The company's market capitalization stands at a modest $185.46M, indicating its size relative to peers in the Automobiles industry.
- Despite recent sales growth, NIU's P/E Ratio is currently negative at -4.43, reflecting the market's concerns over its profitability.
- Revenue for the last twelve months as of Q4 2023 was reported at $373.6M, which, despite being substantial, represents a decrease of 16.31% compared to the previous period.
InvestingPro Tips:
- NIU is noted for holding more cash than debt on its balance sheet, which could provide a buffer against market uncertainties and enable continued investment in growth initiatives.
- Analysts following NIU predict the company will be profitable this year, which could signal a turnaround from the reported net loss and provide a positive outlook for investors.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available that discuss NIU's trading patterns, industry standing, and financial ratios. Utilize coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and access the full list of tips to gain a competitive edge in understanding Niu Technologies' investment potential.
Full transcript - Niu Technologies (NIU) Q1 2024:
Operator: Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Niu Technologies First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Ms. Kristal Li, Investor Relations Manager of Niu Technologies. Ms. Li, please go ahead.
Kristal Li: Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the first quarter 2024. 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 site as well, and the 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 Security Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties, assumptions, and other factors. The company's actual result 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 in this call included discussion of certain non-GAAP financial measures. The press release contains definition of non-GAAP financial measures and the 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 CEO, Yan.
Yan Li: Thank you, Kristal and hello, everyone. Thank you for joining us today. In the first quarter of 2024, our total sales volume was 129,000 units, reflecting a year-over-year increase of 37%. Notably, our sales volume in the China market saw an uplift of 31% to 110,000 units, while our overseas market experienced a fast growth of 48% to 19,000 units. Total revenue of Q1 was RMB504.7 million, marking a 21% year-over-year increase. Q1, 2024 was a pivotal quarter to realign our long-term growth trajectory. In the China market, we continue to refine our product strategy, concentrating on the Premium segments. We bolstered our competitive product portfolio, by enhancing our classic series and broadened its appeal, to encompass a more diverse range of vertical user groups. A key highlight of this quarter was a successful launch of NXT model. The NXT series, characterized by its innovative design and advanced technology, was met with substantial market approval. It contributes 25% of our total sales revenue in China market this quarter, underscoring the efficacy of a strategic focus. Encouraged by the success, we're committed to persisting with this approach, and excited about several upcoming product launches scheduled for Q2. The overseas market, has met our expectation for regaining growth. In the micro-mobility sector, we have focused on expanding our sales channels to establish a strong foundation, for product-driven growth for the rest of the year. We have increased our retail presence by partnering with leading retailers, such as Best Buy (NYSE:BBY) and MediaMarkt, thereby expanding our fiscal footprint over 1,200 locations worldwide. For our overseas e-moped and e-motorcycles, we have concentrated on exploring direct sales business models in key markets in Europe and the United States. We believe those strategic efforts are setting a stage, for substantial growth in the coming quarters. Now let's take a closer look at the China market. We have laid out our product development, conducted market activities saying, expanded sales channels in Q1, all in alignment with our core strategy for this year. Our goal is to build an urban mobility brand focused on the Premium Market segment with diversified user needs. At our product launch event in February, we debut the NXT series. This series continues the design of our first legendary scooter, the N1, but elevates with futuristic elements like magnetic transparent panels, aerodynamic lines, and an enhanced version of signature halo light. The NXT, is the most premium scooter in this lineup, boosts the most advanced technology to-date. The market received the NXT series exceptionally well, marking our initial venture into targeting young demographics, with scooter products. To further expand our product lineup targeting the Gen Z demographics, we have introduced the NPlay and the UMax into the market. The NPlay was officially launched in March at a starting price of RMB 4,399, quickly becoming a competitive product among the young university students. Building on the momentum from NXT and NPlay, we're launching another product, the UMax, completing our offering for the young consumers. The UMax is specifically designed for young riders in Tier 1 to Tier 3 cities, a turn to lifestyle trends. It features a large form factor that enhance both visual appeals and the rider comforts, ideally for dynamic urban environment. Performance-wise, the UMax offers a maximum range of 160 kilometers on a single charge and includes the boost drive mode for rapid acceleration. For safety and enjoyable rides, it incorporates a TCS, ensuring a secure and adaptable experience across various urban terrains. Now with the newest addition, our full range of products targeting the trendy young riders, is now ready for the upcoming peak quarters. Another target group will aim to expand with our unique position products is the female electric scooter riders. Earlier this year, we released our first female focused scooter, the upgraded U1E. The U1E features new color scheme, ergonomic improvement in handles and seat positions, easy to use smart functionalities, and option to include baby seat mounts accessories. Launched at the beginning of March, just in time for the International Women's Day campaign, this model accounted for 12% of total sales volume for the entire quarter, despite being on the market for only one month. Riding on the momentum for the U1E, we are continuing expanding our female focused scooters. The latest addition to our classic M series product line, the MS scooter, tailored to meet the unique needs of female consumers in the Premium Market segment. The MS scooter showcases, a classic and minimalist aesthetic with color schemes, in beige-white and mint green, creating an elegant and clean style that distinguishes itself, from other scooters in the market. This scooter is also engineered, specifically to cater the distinct needs and preferences of female riders, such as a traction control system to ensure a smooth riding experience, a dual-tube frame system for enhanced stability, and both front and rear disc brakes offering advanced level safety. We also expect to introduce another product specifically tailored for female users in the coming days, the O series. The O series combines an aesthetic design, and unique ergonomics to address the special needs of female scooter riders. We plan to release the O series on July 1, through a live stream with top influencers, and I look forward to sharing more details after the launch. Now with the introduction of MS and O series, we will soon complete our product line targeting the premium female user segment of the market. As I mentioned in my previous earning call, building our product portfolio to target various Premium segments, is a core component of our business strategy this year. I'm pleased to share that, we have already received some initial positive feedback, with this strategy in place. Now with our product strategy in focus, we have been actively engaging continuous marketing and branding campaigns to reinforce our brand identity. Recently, we rolled out a dynamic marketing campaign, and broadcast a mix of videos across iconic landmarks in six major cities, significantly enhanced our brand's high-end positioning and robust capabilities. The campaign prominently featured NXT, our cutting-edge flagship product, establishing it as an ideal vehicle for stylish urban commuters. The NXT is designed to resonate with the new generations of trendsetters. The video showcasing key urban centers like Beijing, Shanghai, and Guangzhou has captured the public's attention, a mass of a total of nearly 200 million views. Now our branding effort will also center, around the newly introduced product lines targeting a specific user demographics. At the beginning of the year, we announced our collaboration with JD (NASDAQ:JD) Gaming, a top-performing eSports team. As their official electric vehicle partner, we collaborated ranged from brand activities to product launch, aiming to make a significant impact on the Generation Z demographic, which aligns with our product focus. To further bring up our product presence among the young users, we have an initiative to collaborate with top gaming peripherals brand Razer. Last year, we released the co-branded new cross-Razer SQi limited edition, and this year we are taking the partnership one step forward to collaborate as Razer's brand ambassador. In May, Niu join Razer to host gaming events in various universities, by presenting a Razer new co-branded scooter. So far, the event has covered numerous universities with 2,000 events - attendees. In addition, during the period, we have generated widespread content on social media, for more than 2 million views. We plan to carry out a series of student events throughout 2024 with 100 plus universities to host the event. Now, to engage the female demographic effectively, we have launched a series of online campaigns, specifically tailored to introduce scooter design for female users. In Q1, with our upgraded U1E scooter through a live stream campaign led by a prominent influencer, gathered a significant traction that positioned us as the top brand in the mobility category during the campaign period. Now, throughout the launch of the flagship product, we continue our online campaign effort. We collaborated with over 70 QOLS in the industry and created approximately 200 pieces of high-quality content, which generated 80 million views across various platforms. Now, let me turn into the overseas market. This quarter, we have witnessed a year-over-year growth of 48% driven by the micro-mobility sector, with zero growth of 63%. The growth in the micro-mobility sector is combined with the product offering expansion and the sales channel lineup. On the product portfolio front, with the introduction of the KQi Air, a full carbon fiber lightweight performance kick scooter in last year's, September, we now have a comprehensive product line up. To further complete our product offerings in Q1, we launched the KQi 300 series, which is the enhanced upgrade of the popular KQi 3 series designed for all urban terrain use. The series featured a dual-tube hydraulic suspension, for better handling on uneven surfaces, promising up to 60 kilometer range per charge. Starting at $699, the KQi 300 series was met with great popularities, upon its pre-order period. The KQi 300 will be officially made available in Q2 this year, and we believe it will lift the sales world in the coming months. Now with our comprehensive product line up, we've made significant progress in entering retail channels since the second half of last year, laying out a solid foundation for the growth. In the United States market, we're well positioned in 800 plus Best Buy stores, and are advancing our effort to enter additional retailers like Lowe's (NYSE:LOW), Home Depot (NYSE:HD), Walmart (NYSE:WMT), Target (NYSE:TGT), and Costco (NASDAQ:COST). In Europe, our product is played in over 400 MediaMarkt stores in Germany, over 100 blanche stores in France, and over 100 MediaMarkt and Coeur d'Anglais stores in Spain. We're working closely with our retail partners on marketing campaigns to boost sales, which proven effectively during the first quarter. During a pilot promotion with our German retailers, we witnessed our year-over-year growth of over 300% in scooter activation numbers in Germany. To further expand our retail partnership, we are actively moving forward with the new retail dealer such as Decathlon in France, MediaWorld in Italy and others. Through our retail network special effort, we'll aim to double our retail footprint selling micro-mobility product, by end of 2024. Now the electric two wheeler sector in Q1, is marked by a significant transition in both our product portfolio, and operating models across core business markets in the U.S. and Europe. Last quarter, we introduced the MGT100, RQi and XQi models, all of which has garnered considerable attention, and strategically filled the gap in the market, offering a comprehensive coverage from 50cc to 125cc electric two wheelers. The XQi recently received the Prestige Red Dot Award in April this year, joining a few other new legendary products that have received this honor. All those products encounter a temporary logistic delays, where anticipated they will be fully distributed in the targeted market, by second quarter 2024, aligning perfectly with the peak sales season. And during this quarter, we have made a significant adjustment to our business operations in overseas. In several key markets, alongside our existing distributors, we are establishing local entities and operation teams, to manage direct distribution to dealers. We believe those direct distribution to dealer models allow us to invest more heavily in local branding and marketing efforts, establish a strong customer relationship and increase our adaptability to local market fluctuations. While those operation change require time to fully implement, and direct to dealer model has extended the sales and revenue recognition period, we're confident in this strategy not only deepen our roots in those local markets, but also drive substantial long-term growths. Aligned with our updated product offerings and expansion of sales networks, our branding effort in Q1, has been actively pursued internationally. We focus on both enhancing our brand traffic [indiscernible] with our sales networks, including the distributors and dealers, by sharing our plan for the upcoming quarters. To build and fortify our brand presence in Q1, we actively participate in major industry events such as AIMEXPO in Las Vegas, Motorrader's in Dortmund, Germany and the Salon du 2 Roues in Lyon, France. Those events significantly amplify our brand visibility. Furthermore, we hosted a series of NIU Connect events aiming at local media, distributor, retailers, to showcase and introduce our 2024 product lineup. In Q1, we successfully carried out those events in France and Italy, bringing together over 50 partners, to provide commercial and technical information on our new products, and test drive our new products. Notably, the local media partners including [CleanRight and Moore] have published very positive reviews of products. We plan to continue the NIU Connect series throughout the year in various locations, demonstrating our commitment to build a long-term relationship, with our partners in the core region. Now as we conclude in Q1, we anticipate a continued growth in Q2. For China market, the growth is driven primarily by introduction on new products and channel improvements. We have already witnessed the great popularity of the NX series launch in Q1, where we're in time to finish release of a premium product line, the MS and O series in the coming weeks. Furthermore, our comprehensive approach to expand channels, through both the physical stores and online platforms, ensures that we are broadening our market footprint, while meeting the diverse needs of our customer base. We actively expand our sales channels, to improve offline coverage in O-tier cities, to support our products. And with additional new stores, the key focus for 2024 remains - improvement of same-store sales by leveraging a combination of online to offline traffic. In Q1, we conducted over 6,000 live stream sessions on platforms such as Douyin, T-Mao, JD.com and Xiaohongshu. Notably, the newly entered Douyin live stream platform has positioned us as top three brands in this category, indicating a successful online to offline conversion model that we plan to scale up further. In Q2, we have series of product launch event plans, to utilize the online live stream sales networks, which will be our channel focus for the coming quarters. As we enter the peak sales season - with campaigns such as 618 online shopping festival, we aim to drive further same-store growth. With the product portfolio enhancement and sales expansion, we believe we are well positioned in China market for the rest of the year. However, also observe a macro sluggish market trend in Q2, and then we remain cautious about potential growth in our China market in Q2. For the overseas market, we maintain positive outlook. In the Micro-Mobility segment, we anticipate 2x growth throughout the year, supported by our comprehensive product portfolio and established sales network. The introduction of the KQi 300 series promise that lift sales volume in the coming months. Our significant progress in entering retailer channels, has laid out a solid foundation for growth in 2024, we're advancing our effort in entering additional retailers in this key market. Now in the overseas motorcycle market with adjustment product offerings, operation strategy, we're confident to regain growth by Q2. The recent introduction of those new products gathered a considerable attention to the strategic field of market gaps. We anticipate the diffusion of the new product in the target market by Q2, aligned with the peak sales season. Additionally, the establishment of local entities, the operation team to manage direct to dealer distribution, will allow us to invest more heavily in local branding and marketing efforts. We're now working with over 100 dealers in our direct sales network and we plan to continue growth numbers throughout the year. So in summary, our strategic focus on product innovation, targeted market campaign, robust channel expansion, both domestically and international position us well for the continued growth. We're confident in our ability to improve sales and to our business objective in the upcoming quarters. Now I will turn over the call to our CFO, Fion Zhou to talk about financials.
Fion Zhou: 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 first quarter figures unless I say otherwise, and all monetary figures are in RMB, if not specified. As Yan just mentioned, our total sales volume for the first quarter was 129,000 units, up 37% compared to the same period of last year, and 110,000 units was sold in China, while the remaining 19,000 was sold overseas, and over 50% of our sales volume in China was contributed by the new product launched this quarter. And the total revenue for the first quarter amounted to RMB505 million, an increase of RMB87 million or 21%, compared to the same period of last year. In China revenues were RMB445 million, accounting for 88% of the total revenue. Of this, the scooter revenue was RMB393 million, a year-over-year increase of 28.8%. And this increase was mainly due to the increase in the sales volume, and partially offset by a decrease in revenues per scooter. The China scooter ASP was RMB3,568, a year-over-year decrease of 4.7%, while a quarter-over-quarter increase of 11%, compared to last quarter. And the year-over-year decline in ASP, was mainly due to a change in product mix within the premium series. Last Q1, our revolutionary high-end electronic bicycle, the S series, debuted in the market with a retail price range of RMB8,999 to RMB9,999, and contributed 6% of the sales. While this quarter we introduced our flagship product in NXT with a wider retail price range from RMB6,299 to RMB7,999 and RMB12,499, all above contributed 26% of this quarter sales. And overseas revenue was RMB60 million, accounting for 12% of the total revenue. The scooter revenue including motorcycles, e-mopeds, kick scooters and e-bikes amounted to RMB49 million, compared to RMB53 million in the same period of last year. The decrease was mainly due to the decline in the sales of electronic motorcycles, and mopeds and partially offset by the increased sales of kick scooter. The micro-mobility revenue was around RMB43 million up 10% year-over-year. The overseas scooter ASP decreased from RMB4,138 to RMB2,577. The year-over-year as the sales of the kick scooter with the lower ASP increased, like our entry level K1 and KU series. However compared to the fourth quarter 2023, the ASP increased 18% quarter-over-quarter. The revenue from accessories, spare parts and services amounted to RMB63 million, a 7% increase compared to the same period of last year, due to the increase of spare parts sales in China market. And the world's margin for the first quarter was 18.9%, 2.8 ppt lower than the same period of last year, and 0.1 ppt lower than the previous quarters. This decline was mainly due to increase in the proportion of kick scooter sales overseas, along with the lower margin for e-scooters in China. In China, we changed our product mix to focus more on the widened price range of the premium markets as I mentioned earlier. And additionally we allocated part of the gross margin to our distribution channels, which further reduce the company's overall gross margin. And talking about operating expenses, the first quarter OpEx was RMB165 million representing a 4.6% increase, compared to the same period of last year. Selling and marketing expenses were RMB105 million up RMB33 million year-over-year, primarily due to our overseas business expansion, which resulted in a higher after-sales services and rental expenses, as well as the higher advertising and promotion expenses in international market. Research and development expenses amounted to RMB29 million down RMB6 million year-over-year, mainly due to a RMB5 million decrease of share-based compensation and staff cost. G&A expenses were RMB31 million down RMB20 million year-over-year mainly due to a decrease in the better provision of RMB20 million. In the first quarter we had a net loss of RMB55 million with a net loss margin of 10.9% under the GAAP accounting, compared to a net loss of RMB60 million for the same period of last year and the adjusted net loss was RMB49 million. And turning to our balance sheet and cash flow, we ended a quarter with RMB1,192 million versus RMB860 million last year in cash, restricted cash, term deposit and short-term investment. Our operating cash inflow amounted to RMB34 million and we expect the operating cash flow to remain healthy afterwards, as the payment terms to our suppliers exceed our invoice in payment terms. CapEx for the first quarter amounted to RMB21 million reflecting an increase of RMB5 million, compared to the same period of last year, and this can be attributed primarily to an increase in the opening of new stores in China. And now let's turn to the guidance. We expected the second quarter revenue to be in the range of RMB912 million to RMB955 million and increase of 10% to 20% year-over-year. And 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 subjective to change due to uncertainties related to various factors. And with that we are now open the call for any questions that you may have for us. Operator please go ahead.
Operator: Thank you. [Operator Instructions] We'll now take our first question. Please stand by. Our first question comes from the line of Yating Chen from CICC. Please go ahead. Your line is open. The line of Yating Chen is now open. Please go ahead with your question. Once again the line of Yating Chen is open. Please go ahead with your question.
Yating Chen: Oh sorry I muted. So my first question is about the about the gross margin. We have seen that the structure of the product improved quarter-on-quarter, because the proportion of premium products improved quarter-on-quarter. But the gross margin didn't improve a lot quarter-on-quarter. Could you please explain the reason?
Fion Zhou: This is Fion. Regarding to the gross margin compared to the last quarter actually you know there is a major difference. If we see the quarter-over-quarter differences that we change the - our sales policy that we share in more our gross margin with our distributors to regain the Chinese market and also reinforce their belief in used product. While in the meantime we also you know change the partnership or the way that we used to cooperate with our distributors that we are responsible - for all the marketing and the promotion expenses related, with - our retail from the retail side. This year, since we are sharing more, gross margin with our distributors we are going to reduce the marketing expenses, and subsidies to the retail channel to maintain a healthy contributing margin, or the operating margin before the tax. This is the common practice, with our competitors and also we think it's a good time to reinforce our sales channel with our improved or the new products in the appropriate distribution channel. So this is the main differences, if we see the gross margin in quarter-over-quarter change, and with our gross margin our year-over-year change, just as I just explained on top of - our sales policy change in China. The main reason is that the proportion of kick scooter sales overseas contribution is more than last year.
Yating Chen: Thank you. And my first question is about the period expenses, because the selling expenses in Q1 is still high. So will we see the downward trend of the selling expenses ratio in quarter two and three and four? So will you give us a guidance about the selling expense ratio?
Fion Zhou: Okay. Regarding to the selling and marketing expenses, actually when we are separated by segments, the SMM expenses in the domestic market as a percentage of revenue, has been reduced by this quarter by around 2% to 3% up 2 to 3 ppt as a percentage of revenue. While in the meantime - our international the selling and marketing expenses in the international market, is still at the high level. Just as I just explained that, we keep going to invest in the brand recognition, the channel, building in the domestic in the overseas market. And that's why those kind of expenses - to as percentage of revenue or as per scooters expenses is kind of like a fixed expenses. It cannot be you know, it cannot change to the various parts, since the sales volume in the international market is still at a relatively lower level. And we expect those kind of expenses, to be changed at the various expenses, once you know our sales volume could be reached, to above you know 300,000 to around 500,000. And then those kind of expenses, could be much lower per scooters. And this is the main reason why the selling and marketing expenses still at this higher level. We hope we expected this year selling and marketing expenses as percentage of revenue will become lower quarter-over-quarter. And up to now we see the - it's still on the track, on the track. So next quarter, when we release our financial figures, the overall selling and marketing expenses as percentage of revenue will be reduced, compared to this quarter understand.
Yating Chen: Understand. Thank you very much. And my first question is about the retail stores in 2023, we have seen that - the decrease of retail stores in China. So, we have seen - that our sales volume start to grow again. So do you have plans in 2024 about the retail stores in China will we increase the volume of retail stores in China in this year?
Yan Li: Yes, I think that's right. So we're looking at expand number of stores. So you look at Q1 this year, so we - actually in Q1 this year. We have the numbers, the store counts actually have increased you know less than 100 - it's like 20 or 30 number of stores that, because many stores actually in construction and haven't really finished the construction. So we're looking at basically adding a few hundred stores in Q2. And in Q3 and Q4 it depends I think Q3 is usually a peak season, where the store ads will be actually less, but the Q4 will continue to expand stores.
Yating Chen: Understand. Thank you very much. And my last question is about our sales volume target in 2024, because in the 2023 pre-earning core we gave the guidance about the sales volume in 2024, which means we were a target to sell more than 1 million units in scooters in 2024. So, will we keep the target at present or lower down or improve…?
Yan Li: So, I think at this point, we still keep the target. And so basically, we're still looking for 1 million plus units, including China and also including the China and the overseas altogether.
Yating Chen: Okay. So do you see - so will we see that the growth more from China market or from overseas market, because I think…?
Yan Li: Right - in terms of growth percentage, I think that will actually come more from the overseas market, because overseas markets start with the lower base. Last year, the overseas market is roughly about 100,000 units, right. So in terms of growth percentage, I would expect you actually will see more from the overseas market. But in terms of the volume absolutely volume number growth you will see more from the China side.
Yating Chen: Okay. Thank you. Understand. Thank you for your time, that's all my questions.
Operator: Thank you. [Operator Instructions] There are no further questions, at this time. So, I'll hand the call back to CEO, Dr. Yan Li, for closing remarks.
Yan Li: Well, 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.
Operator: This concludes today's conference call. Thank you for participating, you may now disconnect.
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