Niu Technologies (NASDAQ:NIU) Q1 2020 Earnings Conference Call - Final Transcript
May 18, 2020 • 08:00 am ET
Good day, ladies and gentlemen. Thank you for standing by and welcome to the Niu Technologies First Quarter 2020 Earnings Conference Call.
Now, I will turn the call over to Mr. Jason Yang, Investor Relations Manager of Niu Technologies. Mr. Yang, please go ahead.
Thank you, operator. Hello everyone. Welcome to today's conference call to discuss Niu Technologies results for the first quarter 2020.
The call is being webcast from company's IR website. Investor presentation and a replay of the call will be available soon at ir.niu.com. Please note, today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the United States 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 the company's public filings with the Securities and Exchange Commission. The company does not assume any obligation to update any forward looking statement except as required by law.
Our earnings press release and this call include discussions of certain non-GAAP financial measures. The press release contains a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.
On the call with me today are our CEO, Dr. Yan Li, and the CFO, Mr. Hardy Zhang.
Now, let me turn the call over to Yan. Yan?
All right. Thanks, Jason, and thanks, everyone, for joining us on the call today.
Now we have seen a decline in sales in Q1 2020 due to the impact of COVID-19. On the performance, the sales volume has decreased by 39% in Q1 2020 and the revenue has decreased by 34%, respectively. We have maintained our gross margin at 23.6%, but suffered a net loss margin at 11.3% in Q1 2020 due to the decline in sales. Only financial data were within our expectation.So now first, let me give you an update on the impact of COVID-19. The impact on the business performance in Q1 was evident. So as mentioned in our last earnings call, in China, most cities have shut down businesses for part or entire factory. We started February with all our stores closed and ended with 65% of stores opened for business. Furthermore, as people were recommended to stay home and work from home, there were little retail traffic or retail demand. Since our sales heavily depended on off-line retails, the shutdown of stores and stay home quarantine policy have reduced our sales significantly. During these times, we purposely direct our sales effort online, both through our online shop on Tmall and JD platform as well as the omnichannel approach. In other words, online purchase, off-line delivery mode.
Particularly on omnichannel approach, we trained all our store operators to set up online virtual stores via WeChat and provide online sales consultation to potential customers. We further provided tools for individual store sales reps to generate e-flyers with personal WeChat cum QR code to be distributed