Good day and thank you for standing by. Welcome to the Niu Technologies fourth quarter 2022 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press * one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press * one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Wendy Zhao, Senior Investor Relations Manager of Niu Technologies. Please go ahead. Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the fourth quarter 2022. 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 website as well, and a 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 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 includes 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 call with me today are our CEO, Dr. Yan Li, and CFO, Miss Fion Zhou. Let me turn the call over to Yan. Thank you, everyone, for joining us on the call today. In the fourth quarter of 2022, our total sales volume was 138,279 units, representing a year-over-year decrease of 41.9%. Specifically, sales in the China market dropped by 42.5% year-over-year to about 118,000 units, the sales in the overseas market decreased by 38.97% to 20,000 units. Total revenue in Q4 was CNY 612 million, a decrease of 38% year-over-year. These results wrap up the entire financial year for 2022, which has been a year with significant challenges for us. The total sales volume was 831,000 units, represent a year-over-year decrease of 19.8%. Total revenue for the entire year was CNY 3.17 billion, a decrease of 14.5%. Particularly, our operations in the China market face headwinds from uncertainty stemming from the COVID resurgence and the increase in lithium-ion battery prices. Starting in Q2 2022, the total sales in the China market dropped by 28% year-over-year to about 710,000 units. Our total revenue in the China market dropped about 19% to CNY 2.36 billion in 2022. The COVID resurgence not only disrupt the market demand, but also delay the launch of several key products. Due to the month-long lockdown in Shanghai, where our R&D center is located, we were unable to release several key products until September in 2022, causing us to miss the peak sales period. Apart from the COVID disruptions, we have also faced headwinds from lithium battery price hikes. The raw material price for the lithium-ion battery experienced a sharp increase for nearly 50% since March 2022, significantly slowed down the penetration rate of lithium-ion battery electric two-wheelers throughout the China market. The price hike had a more significant impact on us, since the majority of our e-scooters use lithium-ion batteries. To maintain a healthy growth margin, we had to increase our price by average of 7%-10% and to optimize our product portfolio towards a premium product, started in Q2 of 2022. As a result, except the Q1 of 2022, where we achieved a year-over-year growth, the sales volume for Q2, Q3 and the Q4 in 2022 have decreased by 25%-40% year-over-year due to the lithium price impact. Coming to our international market has experienced a significant growth in 2022, with a remarkable 142% year-over-year increase in the unit sales to about 121,000 units. A 51% year-over-year growth in scooter revenue to RMB 493 million. The micro-mobility tech sector, specifically the kick scooters, was the main driving force behind this surge, accounting for more than 100,000 units in sales. However, the electric two-wheeler categories saw a 46% decrease in sales, selling a total of 18,000 units in 2022. The drop in the electric two-wheeler sales was mainly due to the shutdown of the sharing market, as most of the sharing operators did not raise additional capital for expansion. The loss in sharing market led to a decline in sales of over 11,000 units, which accounted for nearly 70% of total sales drop in the electric two-wheeler market overseas. Our overseas market, like the China market, also face challenges from the lithium battery price hike. The increase in lithium battery price, coupled with the rising of Euro and the U.S., dollar exchange rate, necessitated us to increase the selling price by an average of 22% in the European market, where we sold 70% of our electric two-wheelers previously. The increased selling price had an impact on our sales in electric motorcycles in the consumer market, particularly in Europe. As we reflect on the past year, the shift in market dynamics has significant negative impacts on our operations. In China, the surge of lithium-ion battery prices has reversed the lithium-ion penetration in the electric bicycle and motorcycle market. They rendered our entry-level products, representing 35% of the sales volume in 2021, uncompetitive in this market. In the international market, besides the lithium-ion battery increase, the shutdown of share market has essentially zeroed 1/3 of our electric two-wheeler sales volume or more than 1/2 our electric two-wheeler revenue. We recognize that both of the shift may not be temporary. We start to make strategic adjustments to adapt to the changing market conditions in 2022. Those adjustments did take time and they're resulting in some short-term setbacks in 2022, but it would create a sustainable quality growth in the long run. First, in product development in China market, we have shifted our R&D focus to premium product lines, i.e. the Niu products and the high-end global product lines in 2022. In 2021, we mainly focused on entry-level products to the mass market, taking advantage of a low lithium-ion battery cost. Although those entry-level products contributed a 1-time revenue surge, it had a negative impact on gross margin once the lithium battery price increases. Additional customer recognition suffered due to the short drive range and the brand image as well. In 2022, we pivoted our product development strategy to focus back on premium mid-end products. We further introduced graphite lead-acid battery solutions for our mid-end product lines for both electric bicycles and motorcycles, which allowed us to improve drive range at low cost. Our high-end product lines enabled us to improve our margins to strengthen our brand position. Our mid-end product lines enable us to achieve volume sales and gain recognition from the mass market with product that combine design aesthetics and the practical functionality at affordable prices. To highlight our product development achievements so far in 2022, I'd like to mention the launch of revolutionary SQi and the new UQi+ in the high-end market. The SQi is our product debut in the most high-end electric bicycle market. It boosts innovative design and the cutting-edge material technologies. Priced at CNY 9,000+, the straddle motorcycle like SQi was well received by the market, with customers waiting for 5 to 6 months for deliveries. The new UQi+ is the newest addition to our all-time most popular U series. The new UQi+ has been enhanced with improved light design, smart controls, riding ergonomics, and additional personalization functionalities. The UQi+ has garnered significant attention on social media and generate widespread trend since its launch, with nearly 50,000 units ordered in the first month alone. This positive reception is a testament to our brand leadership and capability in product creation, we have more exciting products planned for Q2 2023. On the mid-end product line, we introduced the V2 and the G6 series in 2022. V2 is the electric bicycle with a simplistic design style, but it was a large form factor. It's about 10%-30% larger than our popular G2 and F2, which were released in 2020 and 2021. The G6 is a light electric motorcycle design with upgrade battery capacity, with a range of over 100 km on single charger with graphite lead-acid batteries. All those product were introduced late in September, which missed the peak season, with the exception of G6, the newly introduced product quickly represent more than 70% sales during the fourth quarter in just three months of the launch. This also helped us of our ASP to increase by 16% quarter-over-quarter in Q4 2022. This was also a promising sign our strategic adjustment worked. By focusing on the premium and mid-end products, we're gradually mitigating the impact of lithium-ion battery cost hikes and start to reclaim the gross margins. Fueled by the premium product introduction of SQi and UQi+, we also pivot our marketing strategy to be product-focused and user-centric. This allowed us to get a better ROI on our marketing investment and also help to continue enhancing the brand. Just to list a few example, in 2022, the marketing campaign surrounding the launch of new products of SQi and the UQi+ resulted in a total of 1.4 billion views across all platforms. We also launched a new innovative ambassador program according to our user-centric marketing strategy, and invite 40-plus new users who are also influencers to co-create with Niu and host local events. During the 2022 World Cup, we mobilized our ambassadors for World Cup themed new scooter shows. The themed scooter shows demonstrate scooters customized and painted with elements from the World Cup. Those demonstrated scooters gain a total of 3.7 million views across China's social media platform in just two weeks. Now in our international market, our strategy has been diversify our product portfolio beyond the electric two-wheelers and expand the geographic regions beyond the main European market for the past 2 years. This strategy demonstrate early success in 2022, although the growth in the new products by new markets has only partially offset downturns in the electric two-wheeler sharing market. The up-front investment in growing in the new product and new market created a red line in the profit. On the product portfolio expansion, we have achieved early success in 2022 in electric kick scooters. We launched the category in the last quarter of 2021, and have since strategically draw our kick scooter product mix. To enter this category and establish brand awareness in the market, we start with the high-end product priced at $800-$900, and gradually introduce mid-end and low-end products with price range from $300-$500. This strategy caused a slow volume ramp-up initially, helped with the brand building in the new entered categories. Niu was awarded the Rider's Choice Award 2023 as the best scooter company presented by Micromobility World. Our high-end product, KQi3, also received coverage from some of the top tech media outlets, such as Tom's Guide, TechRadar and Xataka. In terms of sales channel, we also took a gradual approach. We first launched the kick scooter category, focusing on online channels like Amazon. Our kick scooter models ranked number one, number two on Amazon best seller list in multiple countries in Europe and North America during 2022 Amazon Prime Day campaigns. Riding with the momentum from the online channels, we started to enter the offline primary sales network like MediaMarkt in Europe, and Best Buy in the U.S. towards the second half of 2022. We believe those approach, those slow efforts build a solid foundation for sustainable growth in 2023 and beyond. Now on the regional expansion part in the electric two-wheeler sector, we see the opportunity that grows in the market, in the Southeast Asian market, mainly in Thailand, Indonesia and Nepal. We continued our effort in expanding the Southeast Asian market as we hope to grow the trend of transition from the traditional gas-fueled two-wheelers to electric two-wheelers. In those high-growth Southeast Asian market, we expand a number of stores and working with local partners with a wide range of sales network. In 2022 during the G20 summit in Bali, Niu proudly provided electric scooters to be used by Indonesian national police officials to support the local government's effort to green transportation. As a result of those efforts, the electric two-wheeler sales in the Southeast Asia market increased for nearly 60% year-over-year. As advocate of sustainable living, we're committed to providing our customers with eco-friendly, smart urban vehicles that help reduce our impact to the environment. 2022 also marked another year of our dedication to promote the development of the entire two-wheeler industries in an environmental friendly direction. We released our first inaugural ESG report this year. As of today, the cumulative riding data reached 16 billion km, which means reducing 4 billion kg of carbon emissions compared with the fuel vehicles. To further spread the idea of building green future through technology, we launched a ReNiu, a global sustainability initiative during our Earth Day campaign in 2022. The campaign included a global Earth Day cleanup, which mobilized Niu users across four continents to clean up trash in the public areas, including in places like Bali, Antwerp and Guatemala. Sustainable living has been the core at our brand since its inception. We take pride in making positive impact on the journey of sustainability with our users. Now that 2022 is behind us, we are confident to regain growth in 2023 with strategic adjustment we made in 2022, starting to have a positive impact in Q2 2023. When compared the pre-price adjustment Q1 2022 on a year-over-year basis, our Q1 2023 still shows a sign of negative impact due to the price increase and delayed product launches. We hope to recover into Q2. With the strategy in product development and branding, marketing and the sales channel expansion in place, we believe we are able to regain growth in 2023 as a whole year for the both China and the overseas market. Particularly in the China market, we'll drive quality growth with new product in the premium mid-end segment to continue our leadership product focus and the user-centric marketing to optimize our O-ROI and the retail efficiency improvement to drive the same store growth in the 3,000 plus franchise stores. On the product side, we have a product roadmap plan for a few key product in China starting with Q2 this year. Those product lines will focus on premium new series, that high-end Gova series, covering from high-performance motorcycles, light motorcycles to premium and mid-end China electric bicycles with powertrain platform from NCM lithium battery, LFP lithium battery to graphite lead-acid batteries. We started those product development in 2022, and they will be released on schedule in Q2 2023. Driven by the unique and differentiated product propositions, we continue to focus on building Niu as a leading lifestyle brand for urban mobility. This coming may extend beyond just our product. Besides the product-centric and user-centric marketing strategy, we also plan to expand our co-branding initiatives with brands with similar philosophies in lifestyle. In 2022, we successfully launched collaborations with leading global lifestyle brands such like Razer and Diesel, with co-branded product designed with each partner. We plan to continue success model in 2023. Now on the sales channel, we have launched initiative to focus driving same store sales improvements starting Q4 2022. We recognize offline stores as a crucial center to product exhibition, test drive and after-sale services. We're supporting the offline store with sales leads generated from our onlines. With this O2O approach, we're able to provide better pre- and after-sale experience for our users and boost sales number for our retail stores. We have also launched project to optimize and standardize store layout and the marketing materials for each stores to create a consistent high-quality brand image. Additionally, we have a digitalization program to help the store showcase their product on Douyin platforms, resulting better traffic and potential conversions. Those initiatives will aid over 3,000 stores in achieving health same-store growth. Now, for the international market, we'll remain laser-focused with our diversification strategy in both product portfolio and geographic expansions. Those diversification effort in the last two years will start to contribute significantly growth in both the revenue and the profit. First, on the micro-mobility category, it has been a high growth in 2022 with near 7x volume growth in 2022. We'll continue the super-fast growth of micromobility segment with comprehensive product portfolio building in 2022, and establish sale channels both online and offline with retail partners like Best Buy and MediaMarkt. With the comprehensive kick scooter product mix layout in 2022, we also plan to keep refreshing our product offerings in 2023 to enrich the product options for our users. Besides the kick scooters, we also recently officially launched our first e-bike product, BQi-C3, to the U.S. market in March 2023. The BQi-C3 is a two-battery e-bike with two lightweight swappable batteries with maximum riding distance of over 90 miles. With the established sales network we built out last year, the BQi-C3 will be sold in 100-plus Best Buy stores, along with the online channels in the United States, and they plan to be sold in within Canada in the near future. Having invested in the micro-mobility market since 2020, we are confident that foundation we lay out in the last three years in both brand building, product portfolio, and the channel building, will drive the accelerated growth in 2023, and make substantial contributions in both revenue and the profit. In the electric two-wheeler categories, we had a setback due to the shutdown of sharing operation market in 2022. We expect to be on a fast growth path again in 2023 through product expansions and geographic expansions. On the product side, we plan to roll out the high-performance new products, such as the electric motorcycle, RQi, in order to compete in the electric two-wheeler product offerings, capturing the growth demand in Europe. On the geographic expansion in Southeast Asia, to build on the growth we have achieved in 2022, we plan to launch the battery swapping-enabled product and solutions by partnering with several key operators in the countries like Indonesia, Thailand. Those trials are already on the way, and we expect this will finally open up the Southeast Asian market for us, which hosts the more than 20 million petrol motorcycle sales annually. Now, as we are implementing those growth strategies for both China international market, we expect our total sales volume to grow to 1 million-1.2 million units in 2023, representing a 20%-45% growth compared with 2022. Now, I'll turn the call over to our CFO, Fion, to go through our financial results. Thank you, Yan. Hello, everyone. Please note that our press release contains all the figures and the comparisons you need, and we have also uploaded Excel format figures to our IR website for your easy reference. As I review our financial performance, we're referring to the fourth quarter figures, unless I say otherwise, and all the monetary figures are in RMB, if not specified. As Yan just mentioned, we have been facing multiple challenges in 2022. Our total sales volume for the fourth quarter was 138,000 units, decreased by 42% compared to the same period of last year. Specifically speaking, China market sales volume was 118,000 units, and the overseas market was 20,000 units. In the overseas markets, we managed to maintain a decent year-over-year volume growth for kick scooters, up 15% to 17,000 units. For the full year 2022, the total sales volume was 832,000 units, including 711,000 units from China market and 121,000 units from overseas market. Although sales volume from China market as a whole decreased by 28% year-over-year, Niu and Gova Premium series together only dropped by 10%. The overseas market showed strong growth momentum due to the kick scooter sales increasing up to 102,000 units in aggregate, and the e-moped sales volume decreased by around 45%, mainly due to the termination of two wheel sharing orders, as Yan just mentioned. The total revenue in the fourth quarter was RMB 612 million, decreased by 38% compared to the same period last year. To break down the scooter revenues by region, the scooter revenues from China markets were RMB 447 million, down by 35%. Since we began to execute a strategy to refocus on the premium and mid-end segments, the Gova Entry series only took 5% of the total domestic volume in the fourth quarter. As a result, ASP in China markets reached RMB 3,783, 14 higher on a year-over-year basis. The overseas scooter revenues, including kick scooters, e-moped, and e-motorcycles, were RMB 87 million. Blended scooter ASP of the overseas markets was RMB 4,300, decreased by one-fourth year-over-year due to a higher sales contribution of kick scooter with lower ASP. However, the kick scooters ASP year-over-year increased more than 50%, quarter-over-quarter, 10%. Due to the higher proportion of high-end kick scooters, like the KQi3 series, priced at $800-$900. Accessories, spare parts, and services revenue were RMB 79 million, decreased by 31% due to the battery pack sales reduction from overseas shared mobility operators. For the full year 2022, our total sales, total revenue decreased by 14.5% to RMB 3.2 billion. The China scooter revenue as a whole saw a 19% year-over-year decline. However, the mid-to-high-end products only dropped by 6%. The international kick scooter, international scooter revenues increased by 15% to RMB 494 million. The total international revenue, including scooters, accessories, spare parts, and services, contributed to 18.5% of the total revenue due to the fast growth of kick scooters. Let's look at the ASP in 2022. The overall scooter ASP was CNY 3,432 versus CNY 3,134, a 9.5% increase. The domestic scooter ASP, CNY 3,322, a 12% increase, among which half is due to the better premium product mix, and the rest due to the price increase. International blended scooter ASP is CNY 4,079 versus CNY 6,597, a decrease compared to the last year since the proportion of kick scooters ramped up 10 times. While both new motorcycles and ASP and the kick scooters ASP increased 17% and 13% respectively. The growth margin for the fourth quarter was 22.5, 0.1 PPT lower than the same period of last year. Point four PPT higher than the previous quarter. For the year ended December 31, 2022, the growth margin was 21.1%, compared to 21.9% on an annual basis. The better product mix in the Chinese market brought up growth margin by 1.2 PPT, while the battery cost hikes and higher sales contribution of kick scooters dragged down the growth margin by 2 PPT. Specifically, the growth margin from China markets increased by 1.5 PPT. Talking about operating expenses. The fourth quarter OPEX was CNY 196 million, CNY 7 million higher than the same period of last year. While the OPEX amount almost stay at the same level, the OPEX as a percentage of revenue rose from 19% to 32%, mainly due to a lower revenue base. The selling and marketing expenses were CNY 107 million, CNY 8 million higher year-over-year. Out of that CNY 8 million increase, depreciation and amortization expenses of the new stores were CNY 6 million. The overseas selling expenses increased by CNY 24.5 million, as we continue to expand our footprint to fuel growth of kick scooter sales. While domestic promotion expenses decreased by CNY 20 million, since we took a conservative position under the volatile retail environment. Research and development expenses were CNY 40 million, CNY 5 million lower than the fourth quarter of 2021, mainly due to the decrease in outsourcing professional fees. G&A expenses were CNY 48 million, CNY 4 million higher year-over-year, mainly caused by an increase of CNY 12 million provision for credit loss, offsetting by a decrease in financial service fee of CNY 9 million. For the full year 2022, the OPEX was CNY 775 million, CNY 166 million higher than 2021. The increase was mainly due to the ongoing 2021 new store depreciation impacts increased by CNY 42 million, the increase in overseas business expansion, CNY 83 million, particularly selling expenses for kick scooters like online trafficking, warehouse stocking, product insurance, et cetera, CNY 24 million increased credit loss, CNY 41 million R&D expenses for new scooters and kick scooters rolling out in 2022, offsetting by CNY 24 million decrease from domestic marketing and promotions. The non-GAAP operating expenses, excluding share-based compensation, were RMB 718 million, representing a 22.7% of revenue, compared to 15.2% in 2021. This quarter, we had an income tax benefit from RMB 21.8 million, compared to RMB 47 million income tax expenses last year for the same period, stated in our previous calls. In the fourth quarter, we had a net loss of RMB 37 million, with a net margin of -6.1% under the GAAP measure, compared to net income of RMB 47 million, with the net margin of 4.8% for the same period of last year. On a full year basis, due to the factors, including lower than expected domestic sales, battery cost pressure, and increasing overseas business expansion, as mentioned above, we had a net loss of RMB 49 million, with the net margin of negative 1.6%. Excluding share-based compensation expenses, we still deliver a positive RMB 8.8 million net income in 2022. Turning to our balance sheet and cash flow, we ended a year with RMB 1.1 billion in cash, restricted cash, term deposits, and short-term investments. Our net cash used in operating activities for Q4 was RMB 300 million, mainly due to the reduction in payable to suppliers as a result of seasonality. On a full year basis, the operating cash flow was RMB 126 million outflow, partially due to an increase in kick scooters inventory at international warehouses for quickly responding to incoming orders. Our Q4 CapEx was RMB 43 million. On a full year basis, the CapEx was RMB 135 million compared to RMB 286 million, continuing to slow down as our channel strategy in China market shifting from fast door expansion to post door performance improvements. Now let's turn to guidance. In light of volatile domestic market and our strategy focused on premium and mid-end markets, we expected the first quarter revenue to be in the range of RMB 403 million-RMB 489 million, representing a decrease of 15%-30% year-over-year. Please be aware that this outlook is based on information available as of the date and reflects the company's current and preliminary expectation, which is subject to change due to the uncertainties relating to a various factors. With that, let's now open the call for any questions that you may have for us. Operator, please go ahead. Thank you. As a reminder, to ask a question, you will need to press * one and one on your telephone and wait for your name to be announced. To withdraw your question, please press * one and one again. Please stand by while we compile the Q&A queue. Our first question comes from the line of Yating Chen from CICC. Please go ahead. Your line is open. Hi, I'm Yating from CICC, and I have two questions. The first one is, could you please introduce your plan for channel expansion in 2023? What is your expectations on selling and marketing ratio in 2023? How do you figure out the impact of channel expansion on this expenses? This is my first question. Okay. Maybe I'll address the channel expansion part and also mention the marketing expense, and then I think I'll let Fion to add a bit more. I think on 2023, we look at the two parts. On the China market side, I think we take a more moderate approach where we still do expect to expand a little bit, but it's not significantly like what we did in the last couple of years in 2020 or 2021. I think the focus for China is really to improve the same store sales. I think that currently, what do we have? About 3,000 stores is sufficient in terms of absolute store counts, is sufficient to support the China sales growth. Having said that, I think there are optimizations where in the region... there are regions that I think we still need more stores, where we need to expand, and there are some regions that actually we feel like we actually had more stores than we needed, and there may be some optimization to that. Now on the international part, I think that's where we're gonna focus the most, both on the, sort of the European market, the U.S., market, and the Southeast Asia market. With the European and the Southeast U.S., market, those will be channel expansions more about, you know, expand our footprint in the already entered offline channels for the kick scooters and for the e-bikes. For example, you know, with the kick scooter with Best Buy, we were in about 300 stores, and now we have a shelf display in about 650 stores. In the Southeast Asia, it's actually talking with, working with, traditional dealer network to get our scooters into the dealers. I think this is actually on the channel part. I think your question next about the sales marketing expense. I think if we look at the overall sales marketing expense compare year-over-year, I, you know, I think there's a plan to definitely the percentage that we spend on sales and marketing, I think. Yeah, I think I'll take this question from my side. Okay. Yeah, this is Fion. I'll take the selling and marketing expenses ratio from my side. Actually, in 2022, it's a special year. As percentage of revenue, the selling and marketing expenses was high up to almost 14% as percentage of revenue, considering that we're shifting the domestic marketing strategy only from Q4, and late Q3, while in the meantime, we kept the continuing footstep for the expansion of the kick scooters in 2022. That, you know, you know, we got the results of around 14% selling and marketing expenses. If we look at the marketing and selling expenses as percentage of revenue in 2021, we only, our ratio was only 9%. In 2021, we're balancing the expansion in the domestic market retail and also, you know, the traditional Niu motorcycle and Niu pads business in the international market. Our targets, we expect in 2023, the overall selling and marketing expenses ratio will stay at the same level at around 9%-10% as at the same level in 2021. Balancing the international kick scooters continuing expansion and also the domestic new products rolling out in 2023. You know, with that, I think it is the ideal selling and marketing expenses ratio we expected in this year. Okay. It is very clear. My second question is, as you've mentioned, you are trying to improve store performance. Could you please share more with it? For example, how will we improve the store performance? If we decide to decrease the channel store, what is the benchmark of its profit? Yes, that's my question. Can you repeat what is the benchmark of the, sorry, of the what? What is the benchmark of your decisions to open one more channel or just close it? Right. I think. Let me answer the second one first. I think the second one is actually easy. It's whether the stores are self-profitable, because all our stores are franchise stores. In reality, if the stores are profitable, you know, the store owners tends to, you know, keep the store open. If the stores are not profitable throughout the year, On monthly basis, they may not be profitable, but if for the entire year it's not profitable, then it's actually difficult to keep the store open. I think that's, so it's, you know. This will be, we look at city by city, we look at regional basis. Now, in term of the store sales improvement, I think there are really two things we're looking at. One is how do we get more traffic to the stores. This year, you know, we started a little bit last year, but really this year is actually, what we're planning is actually, as we mentioned, basically, providing stores with sales leads generated from this online JD and Tmall. Our sales online, so what this, what they call the O2 method. Basically, the users make the purchase online and decide to pick up the scooter at the offline store. Last year, it only represented roughly about less than 10% of our sales. This year we're looking at to boost that to basically to 20% or 25% of our sales are coming from online leads. That would actually means increased traffic to the stores. I think second is actually a list of initiatives that we're implementing in the stores to help the conversion rate. Once you increase the traffic, it's about how do you convert the traffic to purchase. Those will be things like optimize their the store layout and the product portfolios in the stores, because we also recognize different region, different cities, you know, we have extensive product portfolio, but some product actually sells better in some regions. We need to make sure the store optimize the product portfolios they carry in their store. With a clear message and a clear trainings to the store staff such that when users come in or potential customers come in, there is easy to communicate to the customers what to buy. Lastly, I think it's, we also recognize accessory sales are a great percentage of the store sales and the store profit. I think with our product, like the UQi, which actually really call for customizations, there are tons of accessories can be developed for the particular product, such that store can, you know, besides selling scooters, they can sell additional accessories to make profit. I think that's what are the three things we're taking. Having said that, I think there is an underlying theme, which is the product itself has to be attractive and competitive. I think this is actually what we feel very confident this year, is having the new product online. You know, we have a bunch of new products ready to roll out in the second quarter this year. We have demonstrated really last quarter, fourth quarter last year is actually, you know, with all the positive news we received from the new product. Once we have the, you know, newly defined product out, it helps boost the sales and also help, you know, improve the store performance. Hopefully that answers question. Okay. Oh, thank you very much. That's all my questions. Thank you. We'll now move on to our next question. Please stand by. Our next question. Hello. From the line of Zijun Li from CITIC. Please go ahead. Your line is open. Hi. Hi. Yeah. Yeah, and film. I'm Zijun Li from CITIC Securities. I have two questions. The first, I wonder our product positioning, because last year, you could see our sales growth indeed faced some pressure. Looking at the situation in the past two months, it seems that the resumption of commuting after the epidemic has stimulated the overall demand of the industry. I would like to know how we will position the focus of our product line in the near future. Yes. This is my first question. Second question. I wonder, how do we evaluate the impact of upstream chains, such as lithium battery price reductions, and we could also see some sodium-ion batteries on our product, and also our financial performance? It could be better if you could share your insights respectively. Thank you. Yeah. No, I think, let me try to address those quick questions. First, on the product positioning. I think our product offerings has always been basically from the premium end to the mid end of the market. I think that has always been the case. Now, it just happened that really for our, you know, in 2022, the issue with the lithium battery price increase that actually made our entry-level product, basically the Gova Series, which is roughly priced at the market mid end level or slightly below the mid end level, that product uncompetitive and the gross margin point of view being possible to make. That, you know, that actually created pressure on the sales volume and on the revenue as well. Heading this into this year, I think, one, we're gonna focus on bringing new product in the premium mid-end market. Second, we're really starting at the second half of last year, we start to introduce the graphite lead-acid battery solutions to offset the lithium battery price increase. We don't have enough product out on the lead-acid, on the graphite lead-acid scooter yet. We have more product coming out, supporting the graphite lead-acid product solutions that can offset this lithium battery price hike, that help us to regain the competitiveness in the mid-end market. I think that's on the product positioning. The second, we did observe that recently, basically the upstream material for the NCM batteries has the price coming down. We also observed that that price coming down has also triggered down to the lithium battery itself. There is a downward pressure on the price. I think, having the lithium price coming down will be a significant positive or plus to our, you know, to our sales volume as well and the margin as well, because, you know, I think really we were in a position that majority of our sales were from lithium, so when the lithium price increased significantly, we got impact the most. When the lithium price coming down significantly, we will benefit the most. Having said that, I think our, so far, our 2023 basically financial outlooks and both our company internal budget, we haven't really taken into consideration of the lithium price coming down yet. If it did come down, that means we'll actually improve our gross margin as well as that will help us into our pricing our product to regain more sales. Hopefully that addressed the question. Yes. Well noted. Understood. Hopefully we, I'm rather looking forward to our back to gain. Thank you. Yeah. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Alice Ma from UBS. Please go ahead. Your line is open. Hi. Thanks for taking the questions. I have 2 questions actually. One is regarding the domestic market, and the other one is regarding the overseas market. For the first one, my question is, what is your view towards the growth of premium, or mid-to-premium, electric two-wheeler market domestically this year? I think that for most of the market consensus, they believe that the overall electric two-wheeler sector will grow by around 20% in terms of volume this year in China. But in terms of the mid-to-premium market, do you expect that it will like achieve a higher-than-average growth? Which means that, do you think that the consumption power of the consumers actually recovers after the reopening this phase? And will the company benefit from this trend? is about the overseas market. I'm really curious about your specific plans into the expansion into the Indonesia or Thailand market you mentioned just now. I'm wondering, like, how do you view the market potential, and how do you view that your product competitiveness in this market? Thank you Yeah. So let me address the first one with the medium, mid-to-premium market one. The. So, in terms of I think my view on this one is kinda like less optimistic in the sense that I think the medium-to-premium market, you know, I would imagine it actually would grow slightly slower. I don't think it will grow faster than the market average. It will grow either slower or maybe just on par. The issue being that, when you're looking at the entire market growth in China, a lot of consumer demand grows and a lot of are actually through, basically industry players doing price competition, which we already observed in Q1 this year. you know, basically major competitors slashing prices on most of our entry-level product, you know, around, you know, CNY 2,000 or less. That actually, you know, that price competition and really shooting for, you know, basically slashing price to drive the volume, that has always been sort of the case for this industry. I think that's actually, you know, to some extent fuel the market growth. From that point of view, I think the mid-end-to-premium market, I don't think it will grow faster than average market. Having said that, it's, you know, we're still it's still in a lot of room for us to gain that market, right? Because if you look at last year, we only did about, you know, 700,000 units. The year before, we actually did about, you know, about 980,000 units, owing the segment, same segment. You know, the drop of, you know, about 200,000 something units because the lithium price went up. We had to increase some of our entry-level product, and it was the pricing out of market, right? That doesn't mean this mid-to-premium market doesn't exist. I think This market, mid-to-premium market, it still exists in terms of, you know, at least 8 million units plus. For us, basically the mid and to the premium. A premium probably like at least like 2 million-3 million units, and the mid at least I think 5 million-6 million units. For us, you know, only last year's 700,000 units was still small percentage. We're less concerned about how fast the overall market grows, but more focused on whether we can have a competitive product. We know we can have, like, a great design product, but it has to be price competitive in that market as well. I think that addressed your first question. I think. Can you repeat on your second question on the Southeast Asia market, which I didn't record down clearly? Okay. Thank you. My second question about the entrance of the Indonesia or Thailand market. You mentioned that I think you mentioned in your introduction that you will leverage the battery swap with the local partners into this market. I'm wondering, like, how do you see the market potential in the South Asia market, and how do you view your product advantage or competitiveness? Thank you. Yeah. Thank, thanks. I think over we've been talking about Southeast Asia market for at least for a few years. The entire market was huge. It's about, you know, they do about 20 million, or I think 18-20 million petrol scooters or petrol motorcycles for the, you know, on annual basis, right? I think Indonesia was at least 6 million units, and Thailand, Malaysia, everything. I think in the past, what's happening is that, you know, that market, there's basically electric moped or electric motorcycles from price point of view is too pricey for that consumer market. I, so there is, you know, it's difficult to find a entry point. We were able to gain about 60% growth last year, but it's still, you know, we're talking about small numbers, less than 10,000 units. I think there are different solutions looking into it. One solution is sort of this battery swapping or battery rental solutions, where people buying the scooters but actually rent a battery or lease a battery, so the battery cost actually booking on a monthly fee as opposed to upfront cost. We're exploring. That will help to lower the, you know, upfront cost. There are also second speculation on, you know, potential government subsidies. I think, just to give you example here, where the Southeast Asian market, kinda like India market. India market, they're even bigger, about 24 million units of petrol motorcycles. Their pricing is very similar India market and the Southeast Asia market. The India market, with the government subsidies, they had subsidies about $250 or $300. The India market in the last three years was able to grow from annually about 100,000 units of electric two-wheelers to about 600,000 units last year. Where Southeast Asia market right now, the electric two-wheelers is very minimal. It's less than 100,000, but by electric motorcycles. We do think there is. You know, you compare those two market, we do think the Southeast Asia market at least have a potential, you know, in the next couple years to grow to the size of India market. Then we, you know, we've been actually planting seed there for multiple years. You know, this actually we do think in the next couple years is the market that, you know, we're able to capture some of the potential high growth there. Okay. Very clear. Thank you. Also wish that we have some breakthroughs in following years. Thank you. Yeah. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Scarlett Ge from Credit Suisse. Please go ahead. Your line is open. Thank you for taking my question. I have one question. How do you view the competition landscape, with some new entrants or potential new entrants, for example, the brands who are trying to transfer from traditional ICE motorcycle makers to the electrified motorcycle field. For example, Honda and Dachangjiang and Wuling, they all have launched new products. The price range It's from CNY 3,000 to CNY 7,000. I guess there are some price overlap between those products. How do you view the difference between you and those products in terms of with those brands, in terms of products or sales channels or some other aspects? Thank you. Yeah. Scarlett, I think for us, it's, you know, China market is still a big market. About, you know, I think may say 40 million units a year, 45 million units a year. Sometimes in some markets there's a 50 million units a year. It's a huge market. Such that I think it's a, you know, when more brands are coming in, it is still able to accommodate more brands. From that perspective, it's actually, it's less a worry from, you know, from our perspective. You know, because even we do about 1 million units in China, it's only still like what? 2% of market. It's, you know, we have less concern when more brands come in. I think it's. I think the right one would be, or the more related one would be actually if the brands actually position their product similar to our product, like a premium brands or, you know, those ones. Which, you know, I think there are buzz last year about Honda, you know, coming with, you know, leveraging their, like, really the tradition. I think it's three models, like a Zoomer and I forgot what's the other two models. Like well-known petrol models that made it electric. Actually that did raise actually quite a buzz in the industry. You know, we don't take those competitions lightly. We think, you know, you know, with the Honda's brand, as well as the, you know, recognition in this market, and especially, with sort of the legacy models that people recognize, you know, It will create a more competition in the premium market. In reality, I think for us it will be that just more, really a pressure and push us, push Niu to come up with competitive product, always better product. I think, I think I assume your question is on the China market per se. Yeah. Yeah. Thank you. Thank you very much. Thank you. There are no further questions at this time, so I'll hand the conference back to you. All right. If there's no questions, and, 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. Operator? Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.