Niu Technologies (NasdaqGM:NIU) - Share price, News & Analysis

Q: What is the Fair Price of NIU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NIU ($7.06) is trading below our estimate of [[fair value]] ($15.42)

NIU fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	6/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

NIU Stock Overview

Niu Technologies designs, manufactures, and sells smart electric scooters in the People's Republic of China.

Rewards

Trading at 54.2% below our estimate of its fair value

Earnings are forecast to grow 41.54% per year

Earnings have grown 71.1% per year over the past 5 years

Risk Analysis

No risks detected for NIU from our risk checks.

Niu Technologies Competitors

Harley-Davidson

NYSE:HOG

US$5.8b

Garrett Motion

NasdaqGS:GTX

US$451.7m

Winnebago Industries

NYSE:WGO

US$2.0b

Motorcar Parts of America

NasdaqGS:MPAA

US$284.1m

Price History & Performance

Summary of all time highs, changes and price drops for Niu Technologies
Historical stock prices
Current Share Price	US$7.06
52 Week High	US$30.10
52 Week Low	US$6.07
Beta	0.52
1 Month Change	4.90%
3 Month Change	-7.95%
1 Year Change	-68.61%
3 Year Change	-1.67%
5 Year Change	n/a
Change since IPO	-18.38%

Recent News & Updates

Jul 12

Investors Go Bearish As Niu Technologies Reports First-Ever Sales Decline

Niu Technologies sold 17% less electric scooters in the second quarter from a year earlier, marking its first-ever decline. The company’s China sales fell 27% due to widespread COVID disruptions, but that was partly offset by soaring international sales. Following the past week’s selloff of its shares, Niu’s stock is now down nearly 60% so far this year. Leading Chinese electric scooter maker’s sales fell 17% in the second quarter, as its home market tumbled due to COVID lockdowns. Electric scooter maker Niu Technologies (NIU) took the unusual step of posting its latest preliminary results for the second quarter on July 4, even as trading of its U.S.-listed shares took a break for America’s Independence Day. But the date was anything but celebratory for Niu’s stock, which fell 5% when trading resumed July 5. That kicked off a downward march that has seen the stock fall 20% in the five trading days since the announcement. Niu’s name means “bull” in Chinese, but investors aren’t exactly bullish on the company these days. The days since Niu’s announcement have seen heavy trading of the stock, including the single heaviest trading day since late last year. That hints that one or more major shareholders were selling down their positions, probably worried over weak prospects for the stock for the rest of this year. Niu’s latest numbers revealed a first-ever year-on-year sales decline for the company since it went public in 2018, as business plunged in its home China market where major swaths of the country were locked down starting from mid-March to battle recent COVID flareups. The disruptions include a citywide lockdown of Shanghai, China’s financial capital, in the months of April and May, sending sales in that key market to near zero for many retailers. The situation began to improve in June, and many consumer-facing companies are now cautiously optimistic that conditions will return to more normal levels in the third quarter. We’ll probably start to see big discussion of that topic when Chinese companies start releasing their second-quarter results in the next few weeks, and focus on third-quarter outlook to divert attention from what will be one of their worst-ever quarters in terms of growth. Niu is one of the first major Chinese companies to provide a look at how dismal things got in the second quarter, saying its overall sales fell 17% year-on-year in the three-month period to 208,857 scooters, electric bikes and kick-style electric scooters. That compares with 9.4% year-on-year growth in this year’s first quarter, which was already down sharply from the company’s 72% growth in unit sales for all of 2021. The second-quarter decline was the result of an even larger 27% decline in its sales in China, which accounted for about 86% of its total unit sales for the period. “The decrease in China market was mainly due to retail traffic decline and logistic constraints caused by the Covid-related lockdowns in Shanghai, Beijing and other top-tier cities, which traditionally contributed 35% to 55% of our total domestic sales volume,” Niu said in a statement. “Sporadic pandemic outbreaks in other parts of the country and increase of retail prices starting from April 1 also affected demand for our products in the second quarter.” The company added that COVID-related disruptions forced it to delay the launch of many new models during the quarter, and also delayed new store openings. Accordingly, it was more upbeat on the third quarter, saying it expected to proceed with the launch of those models and resume opening stores at a more normal rate starting from June. International boom While things were dismal at home, Niu’s situation was much better internationally in the second quarter, as previous COVID restrictions ended in much of the world outside China and life began returning to normal. The company’s international sales quadrupled to 28,558 scooters for the period from 6,980 a year earlier as its kick-style electric scooters gained traction. That huge jump, combined with the China weakness, propelled international sales to 13.7% of Niu’s total for the quarter, up sharply from a year earlier when they accounted for just 2.8% of the total. Niu pointed out that its electric kick-style scooters jumped onto the Amazon Electric Bicycles best seller list for the U.S. starting in April and have remained there since then. Indeed, a look at the list shows Niu’s electric kick scooters are now the second most popular brand in the U.S., behind only Chinese rival Ninebot (689009.SH), owner of the popular Segway brand. The strong performance for its global sales is especially noteworthy since Niu and other exporters have been hard-hit by high shipping prices for much of the last two years during the pandemic, forcing them to raise prices. Soaring prices for lithium batteries used to power its electric scooters, bikes and kick scooters have also hit Niu and its peers. More broadly speaking, Niu, Ninebot and other rivals like China’s Kandi Technologies (KNDI) and Italy’s Piaggio (PIAGF) (PGGCY) look like well positioned lower-end bets to capitalize on the global push for more clean energy transportation and power generation. China has been one of the strongest promoters of clean energy vehicles, and is now home to some of the world’s most promising startups making both electric scooters and cars.

Jul 07

Is Niu Technologies (NASDAQ:NIU) A Risky Investment?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Jun 30

Niu: Even With Outstanding Free Cash Flows, Too Many Risks

NIU’s mission is to redefine urban mobility through smart electric two-wheeled vehicles, its app, and the use of big data. Considering NIU's free cash flow, the new version vehicle GOVA, and big data capabilities, my DCF model implied a valuation close to $19 per share. Operations are run in China, so judges in the United States may not be able to enforce legal actions. Owners of ADSs are not buying equity interest in NIU in China, but equity interests in Cayman. Niu Technologies (NIU) is expected to deliver a new scooter called GOVA, and most investment analysts expect free cash flow generation. I ran several discounted cash flow models with conservative assumptions, which resulted in significant upside potential in NIU’s valuation. With that being said, there are significant risks that could ruin an investment in NIU. The fact that the company was incorporated in the Cayman Islands and most assets are located in China will most likely not help convince investors. I am not a buyer. NIU: Use Of Big Data And New Models Could Enhance Sales Growth NIU’s mission is to redefine urban mobility through smart electric two-wheeled vehicles, its app, and the use of big data. The company presented its technology with the following photos in a recent presentation. Presentation 1Q 2022 In my view, what makes NIU different from other peers is its cloud systems. Performance data and behavioral data are constantly assessed to offer maintenance solutions and insights to strengthen brand loyalty. We use the data collected to provide smart maintenance and services, and guide the users on when and how to properly maintain our products to extend their service life and achieve better performance. We also analyze this data to help us improve our products and create new services. In addition, we collect and analyze user behavioral data from our NIU app and our website, from which we derive insights to further engage our customers and strengthen brand loyalty. Source: 20-F The second revenue catalyst will likely be the incoming increase in the product portfolio. In the last quarterly report, NIU reported a new version of NIU’s vehicle GOVA. If clients like NIU’s new features offered, revenue growth could trend north. Presentation 1Q 2022 Balance Sheet: Customers Finance NIU’s Operations As of March 31, 2022, NIU reported $17 million in cash, $27 million in term deposits, and restricted cash worth $35 million. The balance sheet looks stable with an asset/liability ratio larger than 2x. In my view, the company has sufficient liquidity to pay for more marketing campaigns. If NIU wants to accelerate the capital expenditures, I believe that bankers will likely offer more debt financing. 10-Q I appreciate quite a bit that NIU does not report a lot of debt, and customers help finance the company’s operations. Keep in mind that advances from customers stand at $12 million. 10-Q Analysts Expect Constant EBITDA Margin Around 8%-9% And Growing Net Income - My Assumptions Are Close To These Figures Before mentioning my own figures, I took a look at the numbers delivered by other investment analysts. Estimates include approximately constant EBITDA margin of 8%-9% and operating margin around 4%-7%. It is also beneficial that analysts expect that NIU will report positive and growing net income. By 2024, analysts believe that net income could stay close to CNY558 million. marketscreener.com Considering the previous estimates and the recent supply chain shortage reported by NIU, I ran a conservative case scenario with reasonable sales growth. I assumed that NIU could offer new products in the micro-mobility segment, and perhaps undertake an international expansion. Some of these assumptions were taken from the intentions of management: Despite experiencing a challenging quarter with the supply chain shortage, logistic disruption, and volatile retail environment caused by the recent COVID outbreaks, we managed to achieve moderate growths of sales volume and revenues compared to the same period last year. We are confident that our growth strategy to develop diversified product portfolio, including our new product offerings in micro-mobility segment, and our global market expansion plan, will help us weather through the temporary China market shortfalls, and well position the company to capture the post-pandemic rebounds in electric two-wheeler demand. Source 10-Q My assumptions for the next four years include double digit sales growth, a conservative EBITDA margin of 10%, and an operating margin around 7%-8%. With capital expenditures around $187-$267 million and working capital/sales of 1%, the ratio of free cash flow sales stands at 4%-7%. I believe that my numbers are conservative. Arie Investment Management If we also include a discount of 6.8% and an ultraconservative exit multiple of 7x EBITDA, total equity would stand at $1.4 billion. The fair price would be equal to around $19 per share, and the internal rate of return could reach 30%. Arie Investment Management Several Risks Could Result In A Valuation Of $3.5 Per Share NIU reported an increase in the prices of raw materials in the last quarterly report. Management believes that future gross margin figures could be affected. With this in mind, I decided to run another DCF model with bearish assumptions. The ongoing increase in raw materials prices, especially lithium-ion battery prices in Q1, has created extra pressure on our gross margin. Source: 10-Q

Shareholder Returns

	NIU	US Auto	US Market
7D	6.8%	-4.7%	1.3%
1Y	-68.6%	4.3%	-11.7%

Return vs Industry: NIU underperformed the US Auto industry which returned 6.7% over the past year.

Return vs Market: NIU underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is NIU's price volatile compared to industry and market?
NIU volatility
NIU Average Weekly Movement	12.1%
Auto Industry Average Movement	12.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NIU is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: NIU's weekly volatility (12%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2014	702	Yan Li	https://www.niu.com

Niu Technologies designs, manufactures, and sells smart electric scooters in the People's Republic of China. The company offers NQi, MQi, UQi, and Gova series electric scooters and motorcycles; KQi series electric kick-scooters; NIU Aero and BQi series e-bikes; RQi and TQi series high-performance motorcycles; and YQi series hybrid motorcycles. It also provides accessories and spare parts under the NIU brand name comprising scooter accessories, such as raincoats, gloves, knee pads, storage baskets and tail boxes, smart phone holders, backrests, and locks; lifestyle accessories, which includes T-shirts, coats, sweaters and hoodies, jeans, hats, bags, jewelry, notebook, badges, key chain, and mugs; and performance upgrade components that comprises of upgraded wheels, shock absorbers, brake calipers, and carbon fiber body panels.

Niu Technologies Fundamentals Summary

How do Niu Technologies's earnings and revenue compare to its market cap?
NIU fundamental statistics
Market Cap	CN¥3.66b
Earnings (TTM)	CN¥201.62m
Revenue (TTM)	CN¥3.73b

18.2x

P/E Ratio

1.0x

P/S Ratio

Is NIU overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NIU income statement (TTM)
Revenue	CN¥3.73b
Cost of Revenue	CN¥2.94b
Gross Profit	CN¥792.13m
Other Expenses	CN¥590.51m
Earnings	CN¥201.62m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 15, 2022

Earnings per share (EPS)	2.62
Gross Margin	21.22%
Net Profit Margin	5.40%
Debt/Equity Ratio	14.4%

How did NIU perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is NIU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NIU?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NIU. This is calculated by dividing NIU's market cap by their current preferred multiple.
What is NIU's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥3.66b

NIU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	9.1x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does NIU's PE Ratio compare to its peers?

NIU PE Ratio vs Peers

The above table shows the PE ratio for NIU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	29x
HOG Harley-Davidson	9.3x	6.8%	US$5.8b
GTX Garrett Motion	56.5x	86.5%	US$451.7m
WGO Winnebago Industries	5.2x	-15.9%	US$2.0b
MPAA Motorcar Parts of America	44.9x	79.1%	US$284.1m
NIU Niu Technologies	18.2x	41.5%	US$543.1m

Price-To-Earnings vs Peers: NIU is good value based on its Price-To-Earnings Ratio (18.2x) compared to the peer average (29x).

Price to Earnings Ratio vs Industry

How does NIU's PE Ratio compare vs other companies in the Global Auto Industry?

Price-To-Earnings vs Industry: NIU is expensive based on its Price-To-Earnings Ratio (18.2x) compared to the US Auto industry average (9.1x)

Price to Earnings Ratio vs Fair Ratio

What is NIU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NIU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.2x
Fair PE Ratio	25.9x

Price-To-Earnings vs Fair Ratio: NIU is good value based on its Price-To-Earnings Ratio (18.2x) compared to the estimated Fair Price-To-Earnings Ratio (25.9x).

Share Price vs Fair Value

What is the Fair Price of NIU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NIU ($7.06) is trading below our estimate of fair value ($15.42)

Significantly Below Fair Value: NIU is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Niu Technologies forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

6/6

Future Growth Score 6/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

41.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NIU's forecast earnings growth (41.5% per year) is above the savings rate (1.9%).

Earnings vs Market: NIU's earnings (41.5% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: NIU's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NIU's revenue (30.3% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: NIU's revenue (30.3% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NIU's Return on Equity is forecast to be high in 3 years time (24.2%)

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Past Performance

How has Niu Technologies performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

71.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NIU has high quality earnings.

Growing Profit Margin: NIU's current net profit margins (5.4%) are lower than last year (6.9%).

Past Earnings Growth Analysis

Earnings Trend: NIU has become profitable over the past 5 years, growing earnings by 71.1% per year.

Accelerating Growth: NIU's earnings growth over the past year (6.3%) is below its 5-year average (71.1% per year).

Earnings vs Industry: NIU earnings growth over the past year (6.3%) underperformed the Auto industry 46%.

Return on Equity

High ROE: NIU's Return on Equity (16.2%) is considered low.

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Financial Health

How is Niu Technologies's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NIU's short term assets (CN¥1.7B) exceed its short term liabilities (CN¥970.0M).

Long Term Liabilities: NIU's short term assets (CN¥1.7B) exceed its long term liabilities (CN¥43.4M).

Debt to Equity History and Analysis

Debt Level: NIU has more cash than its total debt.

Reducing Debt: NIU's debt to equity ratio has reduced from 3134.4% to 14.4% over the past 5 years.

Debt Coverage: NIU's debt is well covered by operating cash flow (185.7%).

Interest Coverage: NIU earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Niu Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate NIU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NIU's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NIU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NIU's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NIU has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

6.6yrs

Average management tenure

CEO

Yan Li (43 yo)

6.58yrs

Tenure

Dr. Yan Li has served as the chairman of board of directors of Niu Technologies since March 2018, its chief executive officer since December 2017 and its chief operating officer since January 2016. Prior t...

Leadership Team

Experienced Management: NIU's management team is seasoned and experienced (6.6 years average tenure).

Board Members

Experienced Board: NIU's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31