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What changed in Niu Technologies's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Niu Technologies's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+740 added−843 removedSource: 20-F (2024-04-24) vs 20-F (2023-04-21)

Top changes in Niu Technologies's 2023 20-F

740 paragraphs added · 843 removed · 595 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

281 edited+53 added−93 removed425 unchanged
Biggest changeSelected Condensed Consolidating Statements of Income/(loss) Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 43,448 105,328 3,187,990 (168,169) 3,168,597 Cost of revenues (4) ​ — (41,143) (28,233) (2,483,840) 54,300 (2,498,916) Gross profit ​ — 2,305 77,095 704,150 (113,869) 669,681 Selling and marketing expenses (4) ​ — (15,480) (44,789) (446,149) 66,009 (440,409) Research and development expenses (4) ​ — — (19,770) (202,940) 46,232 (176,478) General and administrative expenses (4) ​ (15,415) (2,343) (26,944) (115,490) 1,731 (158,461) Total operating expenses ​ (15,415) (17,823) (91,503) (764,579) 113,972 (775,348) Government grants ​ — — — 16,385 — 16,385 Share of income (loss) from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ (39,265) — — — 39,265 — Interest expenses ​ — — — (5,716) — (5,716) Interest income ​ 5,217 13 2 7,628 — 12,860 Investment income ​ — 221 — 10,697 — 10,918 Income (loss) before income taxes ​ (49,463) (15,284) (14,406) (31,435) 39,368 (71,220) Income tax benefit (expense) ​ — (166) (164) 22,087 — 21,757 Net income (loss) ​ (49,463) (15,450) (14,570) (9,348) 39,368 (49,463) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 44,397 192,901 3,768,134 (300,895) 3,704,537 Cost of revenues (4) ​ — (37,772) (69,322) (2,879,594) 94,930 (2,891,758) Gross profit ​ — 6,625 123,579 888,540 (205,965) 812,779 Selling and marketing expenses (4) ​ — (11,035) (44,394) (358,394) 81,815 (332,008) Research and development expenses (4) ​ — — (23,920) (200,603) 89,305 (135,218) General and administrative expenses (4) ​ (11,442) (2,688) (24,605) (137,474) 34,410 (141,799) Total operating expenses ​ (11,442) (13,723) (92,919) (696,471) 205,530 (609,025) Government grants ​ — — — 48,727 — 48,727 Share of income from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ 235,265 — — — (235,265) — Interest expenses ​ — — — (6,168) — (6,168) Interest income ​ 1,998 52 2 3,324 — 5,376 Investment income ​ — 1,233 — 19,935 — 21,168 Income (loss) before income taxes ​ 225,821 (5,813) 30,662 257,887 (235,700) 272,857 Income tax expense ​ — (410) (2,588) (44,039) — (47,037) Net income (loss) ​ 225,821 (6,223) 28,074 213,848 (235,700) 225,820 ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 12,232 134,684 2,500,024 (202,611) 2,444,329 Cost of revenues (4) ​ — (9,436) (55,084) (1,877,070) 56,410 (1,885,180) Gross profit ​ — 2,796 79,600 622,954 (146,201) 559,149 Selling and marketing expenses (4) ​ — (9,982) (40,804) (210,861) 60,886 (200,761) Research and development expenses (4) ​ — — (14,897) (173,465) 83,027 (105,335) General and administrative expenses (4) ​ (7,308) (3,124) (20,804) (75,581) 1,957 (104,860) Total operating expenses ​ (7,308) (13,106) (76,505) (459,907) 145,870 (410,956) Government grants ​ — — — 22,441 — 22,441 Share of income from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ 47,711 — — — (47,711) — Interest expenses ​ — — — (7,381) — (7,381) Interest income ​ 5,951 1,750 438 648 — 8,787 Investment income ​ — 296 201 17,201 — 17,698 Income (loss) before income taxes ​ 46,354 (8,264) 3,734 195,956 (48,042) 189,738 Income tax expense ​ — (199) — (20,887) — (21,086) Net income (loss) ​ 46,354 (8,463) 3,734 175,069 (48,042) 168,652 ​ The following table presents the condensed consolidating schedule of financial position for our subsidiaries and the VIE as of the dates presented. 10 Table of Contents Selected Condensed Consolidating Balance Sheets Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 12,376 28,183 ​ 158 ​ 493,570 ​ — ​ 534,287 Term deposit—current ​ 208,590 — ​ — ​ — ​ — ​ 208,590 Restricted cash ​ 176,204 3,906 ​ — ​ 6,230 ​ — ​ 186,340 Short-term investments ​ — — ​ — ​ 160,406 ​ — ​ 160,406 Accounts receivable, net ​ — 1,011 ​ — ​ 298,732 ​ — ​ 299,743 Inventories (1) ​ — 5,966 ​ — ​ 411,955 ​ (912) ​ 417,009 Amounts due from inter-companies (2) ​ — 52,932 ​ 423,025 ​ 24,252 ​ (500,209) ​ — Prepayments and other current assets ​ 12,486 5,242 ​ 391 ​ 187,577 ​ — ​ 205,696 Total current assets ​ 409,656 97,240 ​ 423,574 ​ 1,582,722 ​ (501,121) ​ 2,012,071 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term deposits—non-current ​ — — ​ — ​ 20,000 ​ — ​ 20,000 Property, plant and equipment, net ​ — 128 ​ 2,607 ​ 394,622 ​ — ​ 397,357 Intangible assets, net ​ — 492 ​ 48 ​ 1,318 ​ — ​ 1,858 Operating lease right-of-use assets ​ — — ​ — ​ 86,597 ​ — ​ 86,597 Investment in and amount due from subsidiaries, consolidated VIE and VIE’s subsidiaries (2)(3) ​ 906,299 219,317 ​ — ​ — ​ (1,125,616) ​ — Deferred income tax assets ​ — — ​ — ​ 6,132 ​ — ​ 6,132 Other non-current assets ​ 1 5 ​ 7,000 ​ 5,677 ​ — ​ 12,683 Total non-current assets ​ 906,300 219,942 ​ 9,655 ​ 514,346 ​ (1,125,616) ​ 524,627 Total assets ​ 1,315,956 317,182 ​ 433,229 ​ 2,097,068 ​ (1,626,737) ​ 2,536,698 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — — ​ — ​ 160,000 ​ — ​ 160,000 Notes payable ​ — ​ — ​ — ​ 316,832 ​ — ​ 316,832 Accounts payable ​ — 60 ​ — ​ 459,407 ​ — ​ 459,467 Income taxes payable ​ — 396 ​ — ​ 1,502 ​ — ​ 1,898 Advances from customers ​ — 1,410 ​ — ​ 23,522 ​ — ​ 24,932 Deferred revenue—current ​ — — ​ — ​ 37,540 ​ — ​ 37,540 Amounts due to inter-companies (2) ​ 4,262 18,259 ​ 1,730 ​ 476,121 ​ (500,372) ​ — Accrued expenses and other current liabilities ​ 1,596 5,929 ​ 9,216 ​ 175,352 ​ — ​ 192,093 Total current liabilities ​ 5,858 26,054 ​ 10,946 ​ 1,650,276 ​ (500,372) ​ 1,192,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred revenue—non-current ​ — — ​ — ​ 11,430 ​ — ​ 11,430 Deferred income tax liabilities ​ — ​ — ​ — ​ 1,398 ​ — ​ 1,398 Operating lease liabilities ​ — — ​ — ​ 7,569 ​ — ​ 7,569 Other non-current liabilities ​ — — ​ — ​ 13,441 ​ — ​ 13,441 Amounts due to inter-companies (2) ​ — 115,714 ​ — ​ — ​ (115,714) ​ — Total non-current liabilities ​ — 115,714 ​ — ​ 33,838 ​ (115,714) ​ 33,838 Total liabilities ​ 5,858 141,768 ​ 10,946 ​ 1,684,114 ​ (616,086) ​ 1,226,600 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders’ equity ​ 1,310,098 175,414 ​ 422,283 ​ 412,954 ​ (1,010,651) ​ 1,310,098 Total liabilities and shareholders’ equity ​ 1,315,956 ​ 317,182 ​ 433,229 ​ 2,097,068 ​ (1,626,737) ​ 2,536,698 ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 107,769 ​ 17,954 ​ 187 ​ 82,464 ​ — ​ 208,374 Term deposit—current ​ 95,636 ​ — ​ — ​ — ​ — ​ 95,636 Restricted cash ​ 176,141 ​ — ​ — ​ 47,830 ​ — ​ 223,971 Short-term investments ​ — ​ 30,229 ​ — ​ 743,449 ​ — ​ 773,678 Accounts receivable, net ​ — ​ 885 ​ — ​ 267,672 ​ — ​ 268,557 Inventories (1) ​ — ​ 4,366 ​ — ​ 266,292 ​ (1,021) ​ 269,637 Amounts due from inter-companies (2) ​ — ​ 29,726 ​ 455,990 ​ 23,235 ​ (508,951) ​ — Prepayments and other current assets ​ 8,394 ​ 5,113 ​ 3,840 ​ 38,715 ​ — ​ 56,062 Total current assets ​ 387,940 ​ 88,273 ​ 460,017 ​ 1,469,657 ​ (509,972) ​ 1,895,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term deposits—non-current ​ 15,939 ​ — ​ — ​ 20,000 ​ — ​ 35,939 Property, plant and equipment, net ​ — ​ 80 ​ 3,022 ​ 394,114 ​ — ​ 397,216 Intangible assets, net ​ — ​ 2,072 ​ 63 ​ 1,533 ​ — ​ 3,668 Operating lease right-of-use assets ​ — ​ — ​ — ​ 94,201 ​ — ​ 94,201 Investment in and amount due from subsidiaries, consolidated VIE and VIE’s subsidiaries (2)(3) ​ 865,698 ​ 219,317 ​ — ​ — ​ (1,085,015) ​ — Deferred income tax assets ​ — ​ — ​ — ​ 11,907 ​ — ​ 11,907 Other non-current assets ​ — ​ — ​ — ​ 2,367 ​ — ​ 2,367 Total non-current assets ​ 881,637 ​ 221,469 ​ 3,085 ​ 524,122 ​ (1,085,015) ​ 545,298 Total assets ​ 1,269,577 ​ 309,742 ​ 463,102 ​ 1,993,779 ​ (1,594,987) ​ 2,441,213 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — ​ — ​ — ​ 180,000 ​ — ​ 180,000 Notes payable ​ — ​ — ​ — ​ 143,623 ​ — ​ 143,623 Accounts payable ​ — ​ 15,633 ​ — ​ 523,297 ​ — ​ 538,930 Income taxes payable ​ — ​ 295 ​ 2,588 ​ 14,719 ​ — ​ 17,602 Advances from customers ​ — ​ 2,241 ​ — ​ 15,026 ​ — ​ 17,267 Deferred revenue—current ​ — ​ — ​ — ​ 32,758 ​ — ​ 32,758 Amounts due to inter-companies (2) ​ 4,262 ​ 7,431 ​ 11,541 ​ 485,717 ​ (508,951) ​ — Accrued expenses and other current liabilities ​ 761 ​ 4,041 ​ 12,117 ​ 181,985 ​ — ​ 198,904 Total current liabilities ​ 5,023 ​ 29,641 ​ 26,246 ​ 1,577,125 ​ (508,951) ​ 1,129,084 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred revenue—non-current ​ — ​ — ​ — ​ 10,694 ​ — ​ 10,694 Deferred income tax liabilities ​ — ​ — ​ — ​ 1,992 ​ — ​ 1,992 Operating lease liabilities ​ — ​ — ​ — ​ 13,922 ​ — ​ 13,922 Other non-current liabilities ​ — ​ — ​ — ​ 20,967 ​ — ​ 20,967 Amounts due to inter-companies (2) ​ — ​ 114,296 ​ — ​ — ​ (114,296) ​ — Total non-current liabilities ​ — ​ 114,296 ​ — ​ 47,575 ​ (114,296) ​ 47,575 Total liabilities ​ 5,023 ​ 143,937 ​ 26,246 ​ 1,624,700 ​ (623,247) ​ 1,176,659 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders’ equity ​ 1,264,554 ​ 165,805 ​ 436,856 ​ 369,079 ​ (971,740) ​ 1,264,554 Total liabilities and shareholders’ equity ​ 1,269,577 ​ 309,742 ​ 463,102 ​ 1,993,779 ​ (1,594,987) ​ 2,441,213 ​ The following table presents condensed consolidating schedule of cash flow data for our subsidiaries and the VIE for the years ended presented. 12 Table of Contents Selected Condensed Consolidating Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ (23,565) ​ (29,111) ​ 4,550 ​ (74,417) ​ 687 ​ (121,856) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (98) ​ (579) ​ (134,672) ​ — ​ (135,349) Investments in Other Subsidiaries (5) ​ (12,263) ​ — ​ — ​ — ​ 12,263 ​ — Purchase of term deposits ​ (635,471) ​ — ​ — ​ — ​ — ​ (635,471) Cash received from redemption of term deposits ​ 551,794 ​ — ​ — ​ — ​ — ​ 551,794 Cash paid for purchase of short-term investments ​ — ​ (20,000) ​ — ​ (2,573,000) ​ — ​ (2,593,000) Cash received from sale of short-term investments ​ — ​ 50,317 ​ — ​ 3,163,601 ​ — ​ 3,213,918 Prepayment for an investment ​ — ​ — ​ (4,000) ​ — ​ — ​ (4,000) Others ​ — ​ — ​ — ​ — ​ — ​ — Net cash provided by (used in) investing activities ​ (95,940) ​ 30,219 ​ (4,579) ​ 455,929 ​ 12,263 ​ 397,892 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from the parent company (5) ​ — ​ 12,263 ​ — ​ — ​ (12,263) ​ — Cash received from exercise of employee stock options ​ 2,203 ​ — ​ — ​ — ​ — ​ 2,203 Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 340,000 ​ — ​ 340,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (360,000) ​ — ​ (360,000) Net cash provided by financing activities ​ 2,203 ​ 12,263 ​ — ​ (20,000) ​ (12,263) ​ (17,797) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ 21,972 ​ 764 ​ — ​ 7,994 ​ (687) ​ 30,043 Net increase (decrease) in cash, cash equivalents and restricted cash ​ (95,330) ​ 14,135 ​ (29) ​ 369,506 ​ — ​ 288,282 Cash, cash equivalents and restricted cash at the beginning of the year ​ 283,910 ​ 17,954 ​ 187 ​ 130,294 ​ — ​ 432,345 Cash, cash equivalents and restricted cash at the end of the year ​ 188,580 ​ 32,089 ​ 158 ​ 499,800 ​ — ​ 720,627 ​ 13 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ 25,840 ​ (47,540) ​ 1,200 ​ 354,675 ​ — ​ 334,175 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (93) ​ (1,523) ​ (284,129) ​ — ​ (285,745) Purchase of term deposits ​ (287,163) ​ — ​ — ​ (70,000) ​ — ​ (357,163) Cash received from redemption of term deposits ​ 303,296 ​ — ​ — ​ 50,000 ​ — ​ 353,296 Cash paid for purchase of short-term investments ​ — ​ (205,000) ​ — ​ (5,827,000) ​ — ​ (6,032,000) Cash received from sale of short-term investments ​ — ​ 225,232 ​ — ​ 5,801,935 ​ — ​ 6,027,167 Prepayment for an investment ​ — ​ — ​ — ​ — ​ — ​ — Others ​ — ​ — ​ — ​ (614) ​ — ​ (614) Net cash provided by (used in) investing activities ​ 16,133 ​ 20,139 ​ (1,523) ​ (329,808) ​ — ​ (295,059) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash received from exercise of employee stock options ​ 6,246 ​ — ​ — ​ — ​ — ​ 6,246 Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 340,000 ​ — ​ 340,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (340,000) ​ — ​ (340,000) Net cash provided by financing activities ​ 6,246 ​ — ​ — ​ — ​ — ​ 6,246 Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ (6,108) ​ (1,959) ​ — ​ (423) ​ — ​ (8,490) Net increase (decrease) in cash, cash equivalents and restricted cash ​ 42,111 ​ (29,360) ​ (323) ​ 24,444 ​ — ​ 36,872 Cash, cash equivalents and restricted cash at the beginning of the year ​ 241,799 ​ 47,314 ​ 510 ​ 105,850 ​ — ​ 395,473 Cash, cash equivalents and restricted cash at the end of the year ​ 283,910 ​ 17,954 ​ 187 ​ 130,294 ​ — ​ 432,345 ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2020 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ (55,920) ​ 53,903 ​ (102,580) ​ 570,196 ​ — ​ 465,599 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (6) ​ (2,404) ​ (109,336) ​ — ​ (111,746) Payment of land use rights ​ — ​ — ​ — ​ (39,750) ​ — ​ (39,750) Purchase of intangible assets ​ — ​ — ​ (86) ​ — ​ — ​ (86) Purchase of term deposits ​ (339,653) ​ (56,671) ​ (15,000) ​ — ​ — ​ (411,324) Cash received from redemption of term deposits ​ 374,156 ​ 56,671 ​ 15,000 ​ — ​ — ​ 445,827 Investments in WFOE (5) ​ — ​ (66,350) ​ — ​ — ​ 66,350 ​ — Cash paid for purchase of short-term investments ​ — ​ (147,000) ​ (41,940) ​ (2,537,560) ​ — ​ (2,726,500) Cash received from sale of short-term investments ​ — ​ 98,295 ​ 42,141 ​ 2,167,911 ​ — ​ 2,308,347 Prepayment for an investment ​ — ​ — ​ — ​ — ​ — ​ — Others ​ — ​ — ​ — ​ — ​ — ​ — Net cash provided by (used in) investing activities ​ 34,503 ​ (115,061) ​ (2,289) ​ (518,735) ​ 66,350 ​ (535,232) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash received from exercise of employee stock options ​ 24,230 ​ — ​ — ​ — ​ — ​ 24,230 Proceeds from other subsidiaries of our company (5) ​ — ​ — ​ 66,350 ​ — ​ (66,350) ​ — Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 180,000 ​ — ​ 180,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (217,394) ​ — ​ (217,394) Net cash provided by (used in) financing activities ​ 24,230 ​ — ​ 66,350 ​ (37,394) ​ (66,350) ​ (13,164) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ (16,693) ​ (4,874) ​ — ​ (1,765) ​ — ​ (23,332) Net increase (decrease) in cash, cash equivalents and restricted cash ​ (13,880) ​ (66,032) ​ (38,519) ​ 12,302 ​ — ​ (106,129) Cash, cash equivalents and restricted cash at the beginning of the year ​ 255,679 ​ 113,346 ​ 39,029 ​ 93,548 ​ — ​ 501,602 Cash, cash equivalents and restricted cash at the end of the year ​ 241,799 ​ 47,314 ​ 510 ​ 105,850 ​ — ​ 395,473 Notes: (1) It represents the elimination of the unrealized profit from inter-company sales.
Biggest changeConsolidating Statements of Income/(Loss) Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 28,543 53,552 2,645,570 (75,907) 2,651,758 Cost of revenues (4) ​ — (17,183) (621) (2,075,462) 12,255 (2,081,011) Gross profit ​ — 11,360 52,931 570,108 (63,652) 570,747 Selling and marketing expenses (4) ​ — (19,242) (36,693) (486,171) 46,371 (495,735) Research and development expenses (4) ​ — — (20,766) (145,968) 15,748 (150,986) General and administrative expenses (4) ​ (17,739) (2,308) (19,551) (206,654) 1,734 (244,518) Total operating expenses ​ (17,739) (21,550) (77,010) (838,793) 63,853 (891,239) Government grants ​ — — — 2,969 — 2,969 Share of (loss) income from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ (270,499) — — — 270,499 — Interest expenses ​ — — — (1,424) — (1,424) Interest income ​ 16,402 4 5 19,081 — 35,492 Investment income ​ — — — 1,426 — 1,426 (Loss) income before income taxes ​ (271,836) (10,186) (24,074) (246,633) 270,700 (282,029) Income tax benefit (expense) ​ — 2 (1) 10,192 — 10,193 Net (loss) income ​ (271,836) (10,184) (24,075) (236,441) 270,700 (271,836) ​ 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 43,448 105,328 3,187,990 (168,169) 3,168,597 Cost of revenues (4) ​ — (41,143) (28,233) (2,483,840) 54,300 (2,498,916) Gross profit ​ — 2,305 77,095 704,150 (113,869) 669,681 Selling and marketing expenses (4) ​ — (15,480) (44,789) (446,149) 66,009 (440,409) Research and development expenses (4) ​ — — (19,770) (202,940) 46,232 (176,478) General and administrative expenses (4) ​ (15,415) (2,343) (26,944) (115,490) 1,731 (158,461) Total operating expenses ​ (15,415) (17,823) (91,503) (764,579) 113,972 (775,348) Government grants ​ — — — 16,385 — 16,385 Share of (loss) income from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ (39,265) — — — 39,265 — Interest expenses ​ — — — (5,716) — (5,716) Interest income ​ 5,217 13 2 7,628 — 12,860 Investment income ​ — 221 — 10,697 — 10,918 (Loss) income before income taxes ​ (49,463) (15,284) (14,406) (31,435) 39,368 (71,220) Income tax (expense) benefit ​ — (166) (164) 22,087 — 21,757 Net (loss) income ​ (49,463) (15,450) (14,570) (9,348) 39,368 (49,463) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (4) ​ — 44,397 192,901 3,768,134 (300,895) 3,704,537 Cost of revenues (4) ​ — (37,772) (69,322) (2,879,594) 94,930 (2,891,758) Gross profit ​ — 6,625 123,579 888,540 (205,965) 812,779 Selling and marketing expenses (4) ​ — (11,035) (44,394) (358,394) 81,815 (332,008) Research and development expenses (4) ​ — — (23,920) (200,603) 89,305 (135,218) General and administrative expenses (4) ​ (11,442) (2,688) (24,605) (137,474) 34,410 (141,799) Total operating expenses ​ (11,442) (13,723) (92,919) (696,471) 205,530 (609,025) Government grants ​ — — — 48,727 — 48,727 Share of income (loss) from subsidiaries, consolidated VIE and VIE’s subsidiaries (3) ​ 235,265 — — — (235,265) — Interest expenses ​ — — — (6,168) — (6,168) Interest income ​ 1,998 52 2 3,324 — 5,376 Investment income ​ — 1,233 — 19,935 — 21,168 Income (loss) before income taxes ​ 225,821 (5,813) 30,662 257,887 (235,700) 272,857 Income tax expense ​ — (410) (2,588) (44,039) — (47,037) Net income (loss) ​ 225,821 (6,223) 28,074 213,848 (235,700) 225,820 ​ The following table presents the condensed consolidating schedule of financial position for our subsidiaries and the VIE as of the dates presented. 11 Table of Contents Selected Condensed Consolidating Balance Sheets Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 233,959 13,007 ​ 5,122 ​ 620,485 ​ — ​ 872,573 Term deposit—current ​ 77,556 — ​ — ​ 20,000 ​ — ​ 97,556 Restricted cash ​ 107,522 — ​ — ​ 145 ​ — ​ 107,667 Accounts receivable, net ​ — 2,981 ​ — ​ 91,975 ​ — ​ 94,956 Inventories (1) ​ — 7,014 ​ — ​ 386,967 ​ (1,191) ​ 392,790 Amounts due from inter-companies (2) ​ — 81,551 ​ 395,888 ​ 44,221 ​ (521,660) ​ — Prepayments and other current assets ​ 12,034 4,167 ​ 673 ​ 177,957 ​ 241 ​ 195,072 Total current assets ​ 431,071 ​ 108,720 ​ 401,683 ​ 1,341,750 ​ (522,610) ​ 1,760,614 Property, plant and equipment, net ​ — 73 ​ 1,826 ​ 321,213 ​ — ​ 323,112 Intangible assets, net ​ — 171 ​ 32 ​ 1,103 ​ — ​ 1,306 Operating lease right-of-use assets ​ — — ​ — ​ 76,821 ​ — ​ 76,821 Investment in and amount due from subsidiaries, consolidated VIE and VIE’s subsidiaries (2)(3) ​ 671,329 219,317 ​ — ​ — ​ (890,646) ​ — Deferred income tax assets ​ — — ​ — ​ 20,747 ​ — ​ 20,747 Other non-current assets ​ — 10 ​ — ​ 6,721 ​ — ​ 6,731 Total non-current assets ​ 671,329 219,571 ​ 1,858 ​ 426,605 ​ (890,646) ​ 428,717 Total assets ​ 1,102,400 328,291 ​ 403,541 ​ 1,768,355 ​ (1,413,256) ​ 2,189,331 Short-term bank borrowings ​ — — ​ — ​ 100,000 ​ — ​ 100,000 Notes payable ​ — ​ — ​ — ​ 167,283 ​ — ​ 167,283 Accounts payable ​ — 489 ​ — ​ 575,235 ​ — ​ 575,724 Income taxes payable ​ — 163 ​ — ​ 1,195 ​ — ​ 1,358 Advances from customers ​ — 2,905 ​ — ​ 16,400 ​ — ​ 19,305 Deferred revenue—current ​ — — ​ — ​ 41,755 ​ — ​ 41,755 Amounts due to inter-companies (2) ​ 4,564 39,986 ​ 10 ​ 467,282 ​ (511,842) ​ — Accrued expenses and other current liabilities ​ 4,220 4,682 ​ 5,323 ​ 151,286 ​ — ​ 165,511 Total current liabilities ​ 8,784 48,225 ​ 5,333 ​ 1,520,436 ​ (511,842) ​ 1,070,936 Deferred revenue—non-current ​ — — ​ — ​ 13,168 ​ — ​ 13,168 Deferred income tax liabilities ​ — ​ — ​ — ​ 2,362 ​ — ​ 2,362 Operating lease liabilities ​ — — ​ — ​ 280 ​ — ​ 280 Other non-current liabilities ​ — — ​ — ​ 8,969 ​ — ​ 8,969 Amounts due to inter-companies (2) ​ — 120,235 ​ — ​ — ​ (120,235) ​ — Total non-current liabilities ​ — 120,235 ​ — ​ 24,779 ​ (120,235) ​ 24,779 Total liabilities ​ 8,784 168,460 ​ 5,333 ​ 1,545,215 ​ (632,077) ​ 1,095,715 Total shareholders’ equity ​ 1,093,616 159,831 ​ 398,208 ​ 223,140 ​ (781,179) ​ 1,093,616 Total liabilities and shareholders’ equity ​ 1,102,400 ​ 328,291 ​ 403,541 ​ 1,768,355 ​ (1,413,256) ​ 2,189,331 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 12,376 ​ 28,183 ​ 158 ​ 493,570 ​ — ​ 534,287 Term deposit—current ​ 208,590 ​ — ​ — ​ — ​ — ​ 208,590 Restricted cash ​ 176,204 ​ 3,906 ​ — ​ 6,230 ​ — ​ 186,340 Short-term investments ​ — ​ — ​ — ​ 160,406 ​ — ​ 160,406 Accounts receivable, net ​ — ​ 1,011 ​ — ​ 298,732 ​ — ​ 299,743 Inventories (1) ​ — ​ 5,966 ​ — ​ 411,955 ​ (912) ​ 417,009 Amounts due from inter-companies (2) ​ — ​ 52,932 ​ 423,025 ​ 24,252 ​ (500,209) ​ — Prepayments and other current assets ​ 12,486 ​ 5,242 ​ 391 ​ 187,577 ​ — ​ 205,696 Total current assets ​ 409,656 ​ 97,240 ​ 423,574 ​ 1,582,722 ​ (501,121) ​ 2,012,071 Term deposits—non-current ​ — ​ — ​ — ​ 20,000 ​ — ​ 20,000 Property, plant and equipment, net ​ — ​ 128 ​ 2,607 ​ 394,622 ​ — ​ 397,357 Intangible assets, net ​ — ​ 492 ​ 48 ​ 1,318 ​ — ​ 1,858 Operating lease right-of-use assets ​ — ​ — ​ — ​ 86,597 ​ — ​ 86,597 Investment in and amount due from subsidiaries, consolidated VIE and VIE’s subsidiaries (2)(3) ​ 906,299 ​ 219,317 ​ — ​ — ​ (1,125,616) ​ — Deferred income tax assets ​ — ​ — ​ — ​ 6,132 ​ — ​ 6,132 Other non-current assets ​ 1 ​ 5 ​ 7,000 ​ 5,677 ​ — ​ 12,683 Total non-current assets ​ 906,300 ​ 219,942 ​ 9,655 ​ 514,346 ​ (1,125,616) ​ 524,627 Total assets ​ 1,315,956 ​ 317,182 ​ 433,229 ​ 2,097,068 ​ (1,626,737) ​ 2,536,698 Short-term bank borrowings ​ — ​ — ​ — ​ 160,000 ​ — ​ 160,000 Notes payable ​ — ​ — ​ — ​ 316,832 ​ — ​ 316,832 Accounts payable ​ — ​ 60 ​ — ​ 459,407 ​ — ​ 459,467 Income taxes payable ​ — ​ 396 ​ — ​ 1,502 ​ — ​ 1,898 Advances from customers ​ — ​ 1,410 ​ — ​ 23,522 ​ — ​ 24,932 Deferred revenue—current ​ — ​ — ​ — ​ 37,540 ​ — ​ 37,540 Amounts due to inter-companies (2) ​ 4,262 ​ 18,259 ​ 1,730 ​ 476,121 ​ (500,372) ​ — Accrued expenses and other current liabilities ​ 1,596 ​ 5,929 ​ 9,216 ​ 175,352 ​ — ​ 192,093 Total current liabilities ​ 5,858 ​ 26,054 ​ 10,946 ​ 1,650,276 ​ (500,372) ​ 1,192,762 Deferred revenue—non-current ​ — ​ — ​ — ​ 11,430 ​ — ​ 11,430 Deferred income tax liabilities ​ — ​ — ​ — ​ 1,398 ​ — ​ 1,398 Operating lease liabilities ​ — ​ — ​ — ​ 7,569 ​ — ​ 7,569 Other non-current liabilities ​ — ​ — ​ — ​ 13,441 ​ — ​ 13,441 Amounts due to inter-companies (2) ​ — ​ 115,714 ​ — ​ — ​ (115,714) ​ — Total non-current liabilities ​ — ​ 115,714 ​ — ​ 33,838 ​ (115,714) ​ 33,838 Total liabilities ​ 5,858 ​ 141,768 ​ 10,946 ​ 1,684,114 ​ (616,086) ​ 1,226,600 Total shareholders’ equity ​ 1,310,098 ​ 175,414 ​ 422,283 ​ 412,954 ​ (1,010,651) ​ 1,310,098 Total liabilities and shareholders’ equity ​ 1,315,956 ​ 317,182 ​ 433,229 ​ 2,097,068 ​ (1,626,737) ​ 2,536,698 ​ The following table presents condensed consolidating schedule of cash flow data for our subsidiaries and the VIE for the years ended presented. 13 Table of Contents Selected Condensed Consolidating Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ 14,393 ​ (19,986) ​ 4,964 ​ 93,729 ​ 635 ​ 93,735 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (11) ​ — ​ (78,924) ​ — ​ (78,935) Purchase of term deposits ​ (379,419) ​ — ​ — ​ — ​ — ​ (379,419) Cash received from redemption of term deposits ​ 513,238 ​ — ​ — ​ — ​ — ​ 513,238 Cash paid for purchase of short-term investments ​ — ​ — ​ — ​ (420,000) ​ — ​ (420,000) Cash received from sale of short-term investments ​ — ​ — ​ — ​ 581,426 ​ — ​ 581,426 Net cash provided by (used in) investing activities ​ 133,819 ​ (11) ​ — ​ 82,502 ​ — ​ 216,310 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash received from exercise of employee stock options ​ 654 ​ — ​ — ​ — ​ — ​ 654 Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 100,000 ​ — ​ 100,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (160,000) ​ — ​ (160,000) Net cash provided by financing activities ​ 654 ​ — ​ — ​ (60,000) ​ — ​ (59,346) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ 4,035 ​ 915 ​ — ​ 4,599 ​ (635) ​ 8,914 Net increase (decrease) in cash, cash equivalents and restricted cash ​ 152,901 ​ (19,082) ​ 4,964 ​ 120,830 ​ — ​ 259,613 Cash, cash equivalents and restricted cash at the beginning of the year ​ 188,580 ​ 32,089 ​ 158 ​ 499,800 ​ — ​ 720,627 Cash, cash equivalents and restricted cash at the end of the year ​ 341,481 ​ 13,007 ​ 5,122 ​ 620,630 ​ — ​ 980,240 ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ (23,565) ​ (29,111) ​ 4,550 ​ (74,417) ​ 687 ​ (121,856) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (98) ​ (579) ​ (134,672) ​ — ​ (135,349) Investments in Other Subsidiaries (5) ​ (12,263) ​ — ​ — ​ — ​ 12,263 ​ — Purchase of term deposits ​ (635,471) ​ — ​ — ​ — ​ — ​ (635,471) Cash received from redemption of term deposits ​ 551,794 ​ — ​ — ​ — ​ — ​ 551,794 Cash paid for purchase of short-term investments ​ — ​ (20,000) ​ — ​ (2,573,000) ​ — ​ (2,593,000) Cash received from sale of short-term investments ​ — ​ 50,317 ​ — ​ 3,163,601 ​ — ​ 3,213,918 Prepayment for an investment ​ — ​ — ​ (4,000) ​ — ​ — ​ (4,000) Net cash provided by (used in) investing activities ​ (95,940) ​ 30,219 ​ (4,579) ​ 455,929 ​ 12,263 ​ 397,892 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from the parent company (5) ​ — ​ 12,263 ​ — ​ — ​ (12,263) ​ — Cash received from exercise of employee stock options ​ 2,203 ​ — ​ — ​ — ​ — ​ 2,203 Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 340,000 ​ — ​ 340,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (360,000) ​ — ​ (360,000) Net cash provided by financing activities ​ 2,203 ​ 12,263 ​ — ​ (20,000) ​ (12,263) ​ (17,797) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ 21,972 ​ 764 ​ — ​ 7,994 ​ (687) ​ 30,043 Net increase (decrease) in cash, cash equivalents and restricted cash ​ (95,330) ​ 14,135 ​ (29) ​ 369,506 ​ — ​ 288,282 Cash, cash equivalents and restricted cash at the beginning of the year ​ 283,910 ​ 17,954 ​ 187 ​ 130,294 ​ — ​ 432,345 Cash, cash equivalents and restricted cash at the end of the year ​ 188,580 ​ 32,089 ​ 158 ​ 499,800 ​ — ​ 720,627 ​ 15 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ Niu ​ Other ​ ​ ​ VIE and its ​ ​ ​ Consolidated ​ Technologies Subsidiaries WFOE Subsidiaries Eliminations Total ​ ​ RMB ​ ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ 25,840 ​ (47,540) ​ 1,200 ​ 354,675 ​ — ​ 334,175 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for purchase of property, plant and equipment ​ — ​ (93) ​ (1,523) ​ (284,129) ​ — ​ (285,745) Purchase of term deposits ​ (287,163) ​ — ​ — ​ (70,000) ​ — ​ (357,163) Cash received from redemption of term deposits ​ 303,296 ​ — ​ — ​ 50,000 ​ — ​ 353,296 Cash paid for purchase of short-term investments ​ — ​ (205,000) ​ — ​ (5,827,000) ​ — ​ (6,032,000) Cash received from sale of short-term investments ​ — ​ 225,232 ​ — ​ 5,801,935 ​ — ​ 6,027,167 Prepayment for an investment ​ — ​ — ​ — ​ — ​ — ​ — Others ​ — ​ — ​ — ​ (614) ​ — ​ (614) Net cash provided by (used in) investing activities ​ 16,133 ​ 20,139 ​ (1,523) ​ (329,808) ​ — ​ (295,059) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash received from exercise of employee stock options ​ 6,246 ​ — ​ — ​ — ​ — ​ 6,246 Proceeds from short-term bank borrowings ​ — ​ — ​ — ​ 340,000 ​ — ​ 340,000 Repayment for short-term bank borrowings ​ — ​ — ​ — ​ (340,000) ​ — ​ (340,000) Net cash provided by financing activities ​ 6,246 ​ — ​ — ​ — ​ — ​ 6,246 Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash ​ (6,108) ​ (1,959) ​ — ​ (423) ​ — ​ (8,490) Net increase (decrease) in cash, cash equivalents and restricted cash ​ 42,111 ​ (29,360) ​ (323) ​ 24,444 ​ — ​ 36,872 Cash, cash equivalents and restricted cash at the beginning of the year ​ 241,799 ​ 47,314 ​ 510 ​ 105,850 ​ — ​ 395,473 Cash, cash equivalents and restricted cash at the end of the year ​ 283,910 ​ 17,954 ​ 187 ​ 130,294 ​ — ​ 432,345 (1) It represents the elimination of the unrealized profit from inter-company sales.
Our marketing, design, research and products are aimed at reinforcing consumer perceptions of our “NIU” brand as a premium smart e-scooter brand. Therefore, failure to protect our brand or to grow the value of the “NIU” brand may have a material adverse effect on our business and results of operations, including losing our customers.
Our marketing, design, research and products are aimed at reinforcing consumer perceptions of our “NIU” brand as a premium smart e-scooter brand. Therefore, failure to protect our brand or to grow the value of our “NIU” brand may have a material adverse effect on our business and results of operations, including losing our customers.
We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
We have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or, if adopted, what they would provide.
It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or, if adopted, what they would provide.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by the SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. See “Item 4.
According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. See “Item 4.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China and without the consent by the Chinese securities regulatory authorities and the other competent governmental agencies, no entity or individual may provide documents or materials related to securities business overseas.
Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China and without the consent by the Chinese securities regulatory authorities and the other competent governmental agencies, no entity or individual may provide documents or materials related to securities business overseas.
The PRC Anti-monopoly Law (revised in 2022) and the relevant implementing rules (i) require that where the concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the anti-monopoly authority before the parties implement the concentration, but even if the concentration of undertakings fails to meet the filing threshold, if there is any evidence that the concentration of undertakings has or may have the effect of eliminating or restricting competition, the anti-monopoly authority may require the parties to file, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-monopoly Law.
The PRC Anti-monopoly Law (revised in 2022) and the implementing rules (i) require that where the concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the anti-monopoly authority before the parties implement the concentration, but even if the concentration of undertakings fails to meet the filing threshold, if there is any evidence that the concentration of undertakings has or may have the effect of eliminating or restricting competition, the anti-monopoly authority may require the parties to file, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti­monopoly Law.
Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with the regulations of mainland China relating to the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “—Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law of the PRC and how it may impact the viability of our current corporate structure, corporate governance and business operations.” Our corporate structure is subject to risks associated with our contractual arrangements with the VIE.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with the regulations of mainland China relating to the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “—Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law of the PRC and how it may impact the viability of our current corporate structure, corporate governance and business operations.” Our corporate structure is subject to risks associated with our contractual arrangements with the VIE.
Risk Factors—Risks Related to Our Corporate Structure—The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.” 2 Table of Contents The following diagram illustrates our corporate structure, including our principal subsidiaries, the VIE and its principal subsidiaries, as of the date of this annual report: (1) Token Yilin Hu, Yi’ nan Li, Yuqin Zhang and Changlong Sheng each holds 89.74%, 5.00%, 2.63% and 2.63% of the equity interest in Beijing Niudian, respectively.
Risk Factors—Risks Related to Our Corporate Structure—The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.” 3 Table of Contents The following diagram illustrates our corporate structure, including our principal subsidiaries, the VIE and its principal subsidiaries, as of the date of this annual report: (1) Token Yilin Hu, Yi’ nan Li, Yuqin Zhang and Changlong Sheng each holds 89.74%, 5.00%, 2.63% and 2.63% of the equity interest in Beijing Niudian, respectively.
If a designated legal representative obtains control of the chops in an effort to obtain control over any of our mainland China subsidiaries, the VIE or its subsidiaries, we or our mainland China subsidiaries, the VIE and its subsidiaries would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
If a designated legal representative obtains control of the chops in an effort to obtain control over any of our mainland China subsidiaries, the VIE or its subsidiaries, we or our mainland China subsidiaries, the VIE and its subsidiaries would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
Under the Enterprise Income Tax Law of the PRC, or the EIT Law, and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our mainland China subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a reduced rate of withholding tax.
Under the Enterprise Income Tax Law of the PRC and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our mainland China subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a reduced rate of withholding tax.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review and the draft of Regulations on the Network Data Security, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the enacted version of the revised Measures for Cybersecurity Review and the Regulations on the Network Data Security, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
Furthermore, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.
Furthermore, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the requirements differently from us.
Business Overview—Regulation—Regulations Relating to Foreign Exchange—Regulations on Foreign Currency Exchange.” These laws and regulations of mainland China may significantly limit our ability to use Renminbi converted from the net proceeds of any financing outside of mainland China to fund the establishment of new entities in mainland China by our mainland China subsidiaries, to invest in or acquire any other mainland China companies through our mainland China subsidiaries, or to establish new variable interest entities in mainland China.
Business Overview—Regulations—Regulations Relating to Foreign Exchange—Regulations on Foreign Currency Exchange.” These laws and regulations of mainland China may significantly limit our ability to use Renminbi converted from the net proceeds of any financing outside of mainland China to fund the establishment of new entities in mainland China by our mainland China subsidiaries, to invest in or acquire any other mainland China companies through our mainland China subsidiaries, or to establish new variable interest entities in mainland China.
The trading performances of other Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of the ADSs, regardless of our actual operating performance. 54 Table of Contents In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new offerings, solutions and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and ● potential litigation or regulatory investigations.
The trading performances of other Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of the ADSs, regardless of our actual operating performance. 53 Table of Contents In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new offerings, solutions and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and ● potential litigation or regulatory investigations.
There are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. See “Item 5. Operating and Financial Review and Prospects—Taxation.” In the future we intend to re-invest all earnings, if any, generated from our mainland China subsidiaries for the operation and expansion of our business in mainland China.
There are also other conditions for enjoying the reduced withholding tax rate according to other tax rules and regulations. See “Item 5. Operating and Financial Review and Prospects—Taxation.” In the future we intend to re-invest all earnings, if any, generated from our mainland China subsidiaries for the operation and expansion of our business in mainland China.
For instance, the CAC, together with eight other government authorities, jointly issued the Guidelines on Strengthening the Comprehensive Regulation of Algorithms for Internet Information Services on September 17, 2021, which provides that daily monitoring of data use, application scenarios and effects of algorithms shall be carried out by the relevant regulators, and security assessments of algorithms shall be conducted by the relevant regulators.
For instance, the CAC, together with eight other government authorities, jointly issued the Guidelines on Strengthening the Comprehensive Regulation of Algorithms for Internet Information Services on September 17, 2021, which provides that daily monitoring of data use, application scenarios and effects of algorithms shall be carried out by the regulators, and security assessments of algorithms shall be conducted by the regulators.
In addition to possible shareholders’ approval, we may also have to obtain approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations of mainland China, which could result in increased delay and costs, and may derail our business strategy if we fail to do so.
In addition to possible shareholders’ approval, we may also have to obtain approvals and licenses from the government authorities for the acquisitions and to comply with any applicable laws and regulations of mainland China, which could result in increased delay and costs, and may derail our business strategy if we fail to do so.
Pursuant to relevant regulations of mainland China, we may provide loans to the WFOE up to the larger amount of (i) the balance between the registered total investment amount and registered capital of the WFOE, or (ii) twice the amount of the net assets of the WFOE calculated in accordance with PRC GAAP, and we may provide loans to the VIE up to twice the amount of the net assets of the VIE calculated in accordance with PRC GAAP, each subject to satisfaction of applicable government registration or approval requirements.
Pursuant to the regulations of mainland China, we may provide loans to the WFOE up to the larger amount of (i) the balance between the registered total investment amount and registered capital of the WFOE, or (ii) twice the amount of the net assets of the WFOE calculated in accordance with PRC GAAP, and we may provide loans to the VIE up to twice the amount of the net assets of the VIE calculated in accordance with PRC GAAP, each subject to satisfaction of applicable government registration or approval requirements.
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Taxation Avoidance and the Tax Evasion Arrangement, effective from December 8, 2006, such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a mainland China enterprise.
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, effective from December 8, 2006, such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a mainland China enterprise.
We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant tax authority or we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the arrangement with respect to dividends to be paid by our mainland China subsidiaries to our Hong Kong subsidiary.
We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the tax authority or we will be able to complete the necessary filings with the tax authority and enjoy the preferential withholding tax rate of 5% under the arrangement with respect to dividends to be paid by our mainland China subsidiaries to our Hong Kong subsidiary.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Mainland China’s regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offshore offerings to make loans to or make additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 7 Table of Contents Permissions Required from the PRC Government Authorities for Our Operations We conduct our business primarily through our subsidiaries and the VIE in mainland China.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Mainland China’s regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offshore offerings to make loans to or make additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 8 Table of Contents Permissions Required from the PRC Government Authorities for Our Operations We conduct our business primarily through our subsidiaries and the VIE in mainland China.
The requirement of employee benefit plans has not been implemented consistently by the local governments in mainland China given the different levels of economic development in different locations. We have previously received payment notices from the relevant government authorities for inadequate contribution to employee benefit plans, and we have made the payments and penalty.
The requirement of employee benefit plans has not been implemented consistently by the local governments in mainland China given the different levels of economic development in different locations. We have previously received payment notices from the government authorities for inadequate contribution to employee benefit plans, and we have made the payments and penalty.
Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the mainland China entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer.
Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the mainland China entity which directly owned the taxable assets may report to the tax authority such indirect transfer.
We expect that our employee costs, including wages and employee benefits, will increase. Unless we are able to pass on these increased employee costs to those who pay for our products and services, our ability to achieve or maintain profitability and our results of operations may be materially and adversely affected.
We expect that our employee costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased employee costs to those who pay for our products and services, our ability to achieve or maintain profitability and our results of operations may be materially and adversely affected.
For any amount of loans that we may extend to the WFOE or the VIE, such loans must be registered with the local counterpart of SAFE. Medium- or long-term loans extended by the Company to the VIE must also be approved by the NDRC. For more details, see “Item 4. Information on the Company—B.
For any amount of loans that we may extend to the WFOE or the VIE, such loans must be registered with the local counterpart of SAFE. Medium- or long-term loans extended by our company to the VIE must also be approved by the NDRC. For more details, see “Item 4. Information on the Company—B.
Information on the Company—B. Business Overview—Regulation—Regulations Relating to Dividend Distribution.” Additionally, if our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us.
Information on the Company—B. Business Overview—Regulations—Regulations Relating to Dividend Distribution.” Additionally, if our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us.
As a result, we cannot assure you that all of our shareholders or beneficial owners who are mainland China residents or entities have complied with, and will in the future make or obtain any applicable registrations or approvals required by, SAFE regulations.
As a result, we cannot assure you that all of our shareholders or beneficial owners who are mainland China residents or entities have complied with, or will in the future make or obtain any applicable registrations or approvals required by, SAFE regulations.
Yuqin Zhang who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being mainland China residents have completed the initial foreign exchange registrations and have updated their registrations required in connection with our corporate restructuring.
Yuqin Zhang who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as mainland China residents have completed the initial foreign exchange registrations and have updated their registrations required in connection with our corporate restructuring.
On October 17, 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Nonresident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017 and was amended on June 15, 2018.
On October 17, 2017, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Nonresident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017, and was last amended on June 15, 2018.
If our mobile app were found to be violating the App Provisions, we may be subject to administrative penalties, including warning, service suspension or removal of our mobile app from the relevant mobile app store, which may materially and adversely affect our business and operating results.
If our mobile app were found to be violating these provisions, we may be subject to administrative penalties, including warning, service suspension or removal of our mobile app from the relevant mobile app store, which may materially and adversely affect our business and operating results.
See “—Risks Relating to Our Corporate Structure—Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIE owes additional taxes, which could negatively affect our financial condition and the value of your investment.” Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
See “—Risks Related to Our Corporate Structure—Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIE owes additional taxes, which could negatively affect our financial condition and the value of your investment.” Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, or the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
However, we cannot assure you that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all, which may adversely affect our financial condition and results of operations. 31 Table of Contents We have granted, and may continue to grant, options and other types of awards under our share incentive plan, which may result in increased share-based compensation expenses.
However, we cannot assure you that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all, which may adversely affect our financial condition and results of operations. 30 Table of Contents We have granted, and may continue to grant, options and other types of awards under our share incentive plan, which may result in increased share-based compensation expenses.
Risk Factors—Risks Related to Doing Business in China—The filing, approval or other administration requirements of the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to complete such filing, obtain such approval or meet such requirements.” ​ 8 Table of Contents Financial Information Related to Our Subsidiaries and the VIE The following table presents the condensed consolidating schedule of results of operations for our subsidiaries and the VIE for the periods presented.
Risk Factors—Risks Related to Doing Business in China—The filing, approval or other administration requirements of the CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to complete such filing, obtain such approval or meet such requirements.” Financial Information Related to Our Subsidiaries and the VIE The following table presents the condensed consolidating schedule of results of operations for our subsidiaries and the VIE for the periods presented.
If we or the VIE are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business license and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations; ● imposing fines, confiscating the income from the VIE, or imposing other requirements with which we or the VIE may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or conduct the business operations of the VIE; or ● restricting or prohibiting our ability to finance our business and operations in mainland China.
If we or the VIE are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including, but not limited to: ● revoking the business license and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations; ● imposing fines, confiscating the income from the VIE, or imposing other requirements with which we or the VIE may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or conduct the business operations of the VIE; or ● restricting or prohibiting our ability to finance our business and operations in mainland China.
In February 2021, we completed the registration of the equity pledge under the second amended and restated equity pledge agreement with the relevant local office of the State Administration of Market Regulation in accordance with the PRC Property Rights Law.
In February 2021, we completed the registration of the equity pledge under the second amended and restated equity pledge agreement with the local office of the State Administration of Market Regulation in accordance with the PRC Property Rights Law.
Besides, the foreign investors of the company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors.
Besides, foreign investors of the company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the regulations on the domestic securities investments by foreign investors.
International sales and operations may be subject to risks such as: ● limited brand recognition (compared with our home market in China); ● costs associated with establishing new distribution networks; ● difficulty to find qualified partners for overseas distribution; ● inability to anticipate foreign consumers’ preferences and customs; ● difficulties in staffing and managing foreign operations; ● burdens of complying with a wide variety of local laws and regulations, including personal data protection, battery, motor, packaging and labeling; ● political and economic instability; ● trade restrictions; ● lesser degrees of intellectual property protection; ● tariffs and customs duties and the classifications of our goods by applicable governmental bodies; and ● a legal system subject to undue influence or corruption.
International sales and operations may be subject to risks such as: ● limited brand recognition (compared with our home market in China); ● costs associated with establishing new distribution networks; ● difficulty to find qualified partners for overseas distribution; ● inability to anticipate foreign consumers’ preferences and customs; ● difficulties in staffing and managing foreign operations; ● burdens of complying with a wide variety of local laws and regulations, including personal data protection, battery, motor, packaging and labeling; ● political and economic instability; 25 Table of Contents ● trade restrictions; ● lesser degrees of intellectual property protection; ● tariffs and customs duties and the classifications of our goods by applicable governmental bodies; and ● a legal system subject to undue influence or corruption.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; 57 Table of Contents ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
The PRC governmental authorities have enacted a series of laws and regulations relating to the protection of personal information and/or the supervision over data processing activities, under which relevant information or data processors are required to comply with an array of personal information and data protection requirements, including for example, to clearly indicate the purposes, methods and scope of any information collection and usage, to obtain appropriate user consent and to establish user information protection systems with appropriate remedial measures.
The PRC governmental authorities have enacted a series of laws and regulations relating to the protection of personal information and/or the supervision over data processing activities, under which certain information or data processors are required to comply with an array of personal information and data protection requirements, including for example, to clearly indicate the purposes, methods and scope of any information collection and usage, to obtain appropriate user consent and to establish user information protection systems with appropriate remedial measures.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of mainland China domestic companies and controlled by mainland China persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, adopted by six PRC regulatory agencies in 2006 and amended in 2009, or the M&A Rules, require an overseas special purpose vehicle formed for listing purposes through acquisitions of mainland China domestic companies and controlled by mainland China persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
On November 21, 2019, the State Administration for Market Regulation issued the Interim Provisions on the Administration of Recall of Consumer Goods, or the Recall Provisions, which became effective on January 1, 2020.
On November 21, 2019, the State Administration for Market Regulation, or the SAMR, issued the Interim Provisions on the Administration of Recall of Consumer Goods, which became effective on January 1, 2020.
Moreover, the costs of identifying and consummating acquisitions may be significant. 32 Table of Contents Our business could be adversely affected by trade tariffs or other trade barriers. Our products are exported to a number of geographical markets, such as Europe, the U.S. and Southeast Asia, and we plan to further expand our overseas sales in the future.
Moreover, the costs of identifying and consummating acquisitions may be significant. ​ 31 Table of Contents Our business could be adversely affected by trade tariffs or other trade barriers. Our products are exported to a number of geographical markets, such as Europe, the U.S. and Southeast Asia, and we plan to further expand our overseas sales in the future.
The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income tax. 53 Table of Contents We face uncertainties on the reporting and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our company by investors that are non-mainland China resident enterprises.
The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income tax. 52 Table of Contents We face uncertainties on the reporting and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our company by investors that are non-mainland China resident enterprises.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline. 55 Table of Contents Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial.
Sales of these registered shares in the form of ADSs in the public market could cause the price of our ADSs to decline. 54 Table of Contents Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial.
Hong Kong has a tax arrangement with mainland China that provides for a 5% withholding tax on dividends subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise own at least 25% of the mainland China enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a “beneficial owner” of the dividends.
Hong Kong has a tax arrangement with mainland China that provides for a 5% withholding tax on dividends subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise own at least 25% of the mainland China enterprise distributing the dividend at all times within the twelve-month period immediately preceding the distribution of dividends and be a “beneficial owner” of the dividends.
China’s economy differs from the economies of most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business.
China’s economy differs from the economies of most developed countries in many respects, including with respect to the level of development, growth rate, control of foreign exchange and allocation of resources. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business.
See “—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” 45 Table of Contents Mainland China’s regulation of loans to and direct investment in entities in mainland China by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offshore offerings to make loans to or make additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
See “—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Mainland China’s regulation of loans to and direct investment in entities in mainland China by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our offshore offerings to make loans to or make additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
If any of our overseas operations, or our associates or agents, violate such laws and regulations, we could become subject to sanctions or other penalties, which could have a material and adverse effect on our business, financial condition, results of operations and prospects. 33 Table of Contents Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity.
If any of our overseas operations, or our associates or agents, violate such laws and regulations, we could become subject to sanctions or other penalties, which could have a material and adverse effect on our business, financial condition, results of operations and prospects. 32 Table of Contents Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity.
If, in the future, the accumulated earnings of the VIE exceed the service fees paid to our mainland China subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be nonsubstantive and disallowed by Chinese tax authorities), the VIE could make a non-deductible transfer to our mainland China subsidiaries for the amounts of the stranded cash in the VIE.
If, in the future, the accumulated earnings of the VIE exceed the service fees paid to our mainland China subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities), the VIE could make a non-deductible transfer to our mainland China subsidiaries for the amounts of the stranded cash in the VIE.
Although this resolution has not been adopted by the PRC national government as a national regulation, such interpretations that may be promulgated by the government authorities from time to time may still cause uncertainty regarding the compliance of our business. See “Item 4. Information on the Company—B. Business Overview—Regulation” for further details.
Although this resolution has not been adopted by the PRC national government as a national regulation, such interpretations that may be promulgated by the government authorities from time to time may still cause uncertainty regarding the compliance of our business. See “Item 4. Information on the Company—B. Business Overview—Regulations” for further details.
For example, the FIL removes all references to the terms of “de facto control” or “contractual control” as defined in the draft published in 2015 by the Ministry of Commerce, or the MOFCOM, and adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means.” The FIL Implementation Rules also remain silent on contractual arrangements.
For example, the Foreign Investment Law removes all references to the terms of “de facto control” or “contractual control” as defined in the draft published in 2015 by the Ministry of Commerce, and adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means.” The Implementation Rules of the Foreign Investment Law also remain silent on contractual arrangements.
The cash inflows of Niu Technologies were primarily generated from the proceeds received from Niu Technologies’ public offerings of ordinary shares, other financing activities and cash generated from our operating activities. F or the years ended December 31, 2020, 2021 and 2022 , Niu Technologies did not provide any capital contributions or loans to our mainland China subsidiaries .
The cash inflows of Niu Technologies were primarily generated from the proceeds received from Niu Technologies’ public offerings of ordinary shares, other financing activities and cash generated from our operating activities. F or the years ended December 31, 2021, 2022 and 2023 , Niu Technologies did not provide any capital contributions or loans to our mainland China subsidiaries .
A major breach of our network security and systems could create serious negative consequences for our businesses and future prospects, including possible fines, penalties, reduced customer demand for our products, and harm to our reputation and brand. See “Item 4. Information on the Company—B. Business Overview—Regulation” for further details.
A major breach of our network security and systems could create serious negative consequences for our businesses and future prospects, including possible fines, penalties, reduced customer demand for our products and harm to our reputation and brand. See “Item 4. Information on the Company—B. Business Overview—Regulations” for further details.
Any prolonged occurrence or recurrence of these health epidemics or other adverse public health developments in China or any of the major markets in which we do business may have a material adverse effect on our business and operations. Our business could also experience a slowdown or temporary suspension in production in geographic locations impacted.
Any prolonged occurrence or recurrence of these health epidemics or other adverse public health developments in China or any of the major markets in which we operate may have a material adverse effect on our business and operations. Our business could also experience a slowdown or temporary suspension in production in geographic locations impacted.
The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. Currently, Token Yilin Hu, Yi’nan Li, Yuqin Zhang and Changlong Sheng each hold 89.74%, 5.00%, 2.63% and 2.63% of the equity interest in the VIE, respectively.
The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition. Currently, each of Token Yilin Hu, Yi’nan Li, Yuqin Zhang and Changlong Sheng holds 89.74%, 5.00%, 2.63% and 2.63% of the equity interest in the VIE, respectively.
The shareholders of the VIE have executed powers of attorney to appoint the Company to vote on their behalf and exercise voting rights as shareholders of the VIE.
The shareholders of the VIE have executed powers of attorney to appoint our company to vote on their behalf and exercise voting rights as shareholders of the VIE.
We are not sure if we were to use a portion of the proceeds raised from our financing actibities to fund investments in and acquisitions of complementary business and assets outside of mainland China, such use of U.S. dollars funds held outside of mainland China would be subject to the NDRC Order 11.
We are not sure if we were to use a portion of the proceeds raised from our financing activities to fund investments in and acquisitions of complementary business and assets outside of mainland China, such use of U.S. dollars funds held outside of mainland China would be subject to the NDRC Order 11.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
To sustain and grow the business over the long term, we must continue to be successful in selling products and promoting the NIU brand experience and lifestyle to a broader and more diverse set of users. We must also execute its diversification strategy without adversely impacting the strength of the brand with core users.
To sustain and grow our business over the long term, we must continue to be successful in selling products and promoting the NIU brand experience and lifestyle to a broader and more diverse set of users. We must also execute our diversification strategy without adversely impacting the strength of the brand with core users.
See “Item 4. Information on the Company—B. Business Overview—Regulation” for additional details regarding the permits, licenses, registrations and other requirements applicable to us, our subsidiaries and affiliates. We largely rely on our own standards concerning the production and quality control of such products.
See “Item 4. Information on the Company—B. Business Overview—Regulations” for additional details regarding the permits, licenses, registrations and other requirements applicable to us, our subsidiaries and affiliates. We largely rely on our own standards concerning the production and quality control of such products.
Failure to successfully drive demand for our smart e-scooters may have a material adverse effect on our business and results of operations. We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Failure to successfully increase demand for our smart e-scooters may have a material adverse effect on our business and results of operations. We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, or the FIL, which became effective on January 1, 2020 and replaced the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillary regulations.
On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1, 2020 and replaced the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillary regulations.
We refer to the shareholders of the VIE as its nominee shareholders because although they remain the holders of equity interests on record in each of the VIE, pursuant to the terms of the relevant power of attorney, each of such shareholders has irrevocably authorized the Company to exercise his, her or its rights as a shareholder of the VIE.
We refer to the shareholders of the VIE as its nominee shareholders because although they remain the holders of equity interests on record in each of the VIE, pursuant to the terms of the power of attorney, each of such shareholders has irrevocably authorized our company to exercise his, her or its rights as a shareholder of the VIE.
As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
As a result, it may be difficult or impossible for you to bring an action against us in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
If any of our directors or any members of our senior management were to terminate their service or employment, there can be no assurance that we would be able to find suitable replacements in a timely manner, at acceptable cost or at all.
If any of our directors or any members of our senior management were to terminate their service or employment with us, there can be no assurance that we would be able to find suitable replacements in a timely manner, at acceptable cost or at all.
Companies operating in mainland China are required to participate in various government-sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government from time to time at locations where we operate our businesses.
Companies operating in mainland China are required to participate in various government-sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of their employees up to a maximum amount specified by the local government from time to time at locations where they operate our businesses.
There is no guarantee that our products will satisfy the relevant standard and requirements for electric bicycles or motorcycles, and we may be required to satisfy additional industry standards and face regulation changes relating to electric bicycle and motorcycle business in the future.
There is no guarantee that our products will satisfy the standards and requirements for electric bicycles or motorcycles, and we may be required to satisfy additional industry standards and face regulation changes relating to electric bicycle and motorcycle business in the future.
Current regulations of mainland China permit our mainland China subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations.
Current regulations of mainland China permit our mainland China subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of the statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations.
In addition, the Data Security Law and the PIPL provide that no entity or individual within the territory of mainland China shall provide any foreign judicial body and law enforcement body with any data or any personal information stored within the territory of mainland China without the approval of the competent government authority of the PRC.
In addition, the Data Security Law and the Personal Information Protection Law provide that no entity or individual within the territory of mainland China shall provide any foreign judicial body and law enforcement body with any data or any personal information stored within the territory of mainland China without the approval of the competent PRC government authority.
For the years ended December 31, 2020, 2021 and 2022, no assets other than cash were transferred between Niu Technologies and a subsidiary, the VIE or its subsidiary, no subsidiaries paid dividends or made other distributions to Niu Technologies, and no dividends or distributions were paid or made to U.S. investors.
For the years ended December 31, 2021, 2022 and 2023, no assets other than cash were transferred between Niu Technologies and a subsidiary, the VIE or its subsidiary, no subsidiaries paid dividends or made other distributions to Niu Technologies, and no dividends or distributions were paid or made to U.S. investors.
Our operating results could also suffer if we do not generate revenues consistent with our expectations for this seasonal demand because many of our procurement are based on anticipated levels of annual revenues and past years’ pattern of reasonability.
However, our operating results could suffer if we do not generate revenues consistent with our expectations for this seasonal demand because many of our procurement are based on anticipated levels of annual revenues and past years’ pattern of reasonability.
Business Overview—Regulation—Regulations Relating to Foreign Exchange—Regulations on Foreign Currency Exchange.” Since 2016, the PRC government has tightened its foreign exchange policies again and stepped up scrutiny of major outbound capital movement. More restrictions and a substantial vetting process have been put in place by SAFE to regulate cross-border transactions falling under the capital account.
Business Overview—Regulations—Regulations Relating to Foreign Exchange—Regulations on Foreign Currency Exchange.” The PRC government has tightened its foreign exchange policies again and stepped up scrutiny of major outbound capital movement. More restrictions and a substantial vetting process have been put in place by SAFE to regulate cross-border transactions falling under the capital account.
In addition, on December 31, 2021, the CAC, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security promulgated the Administrative Provisions on Internet Information Service Algorithm Recommendation, which came into effect on March 1, 2022.
In addition, on December 31, 2021, the CAC, the Ministry of Industry and Information Technology, or the MIIT, the Ministry of Public Security and the Ministry of State Security promulgated the Administrative Provisions on Internet Information Service Algorithm Recommendation, which came into effect on March 1, 2022.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in the audit procedures and reported financial information and the quality of our financial statements.
As of the same date, we had 354 applications for patents and trademarks pending in mainland China, Europe and other jurisdictions. For our pending applications, we cannot assure you that we will be granted patents pursuant to our pending applications.
As of the same date, we had 316 applications for patents and trademarks pending in mainland China, Europe and other jurisdictions. For our pending applications, we cannot assure you that we will be granted patents pursuant to our pending applications.
As the 2021 Negative List is relatively new, there remain substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.
There remain uncertainties as to the interpretation and implementation of the 2021 Negative List, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRisk Factors—Risks Relating to Our Business—We retain certain personal information about our users and may be subject to various privacy and consumer protection laws.” Regulations Relating to Intellectual Property Rights Mainland China has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.
Biggest changeRisk Factors—Risks Related to Our Business and Industry—We retain certain personal information about our users and may be subject to various privacy and consumer protection laws.” Regulations Relating to Intellectual Property Rights Mainland China has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names. ​ 82 Table of Contents Regulations on Copyright Pursuant to the Copyright Law of the PRC revised by the Standing Committee of the National People’s Congress on November 11, 2020 and came into effect on June 1, 2021, copyrights include personal rights such as the right of publication and that of attribution as well as property rights such as the right of production and that of distribution.
Where any defect is found during the investigation, the manufacturer must immediately cease to manufacture, sell, or import the relevant products and recall such products. We have not received any such notice from authorities, or initiated, voluntarily or involuntarily, any product recalls in accordance with the Recall Provisions. See “Item 3. Key Information—D.
Where any defect is found during the investigation, the manufacturer must immediately cease to manufacture, sell, or import the relevant products and recall such products. We have not received any such notice from authorities, or initiated, voluntarily or involuntarily, any product recalls in accordance with such provisions. See “Item 3. Key Information—D.
In addition, on January 11, 2017, PBOC promulgated the Notice of the People’s Bank of China on Full-coverage Macro-prudent Management of Cross-border Financing, or PBOC Circular 9, which sets out an upper limit for mainland China entities, including foreign-invested entities and domestic-invested entities, regarding their foreign debts, or the Financing Limit.
In addition, on January 11, 2017, People’s Bank of China promulgated the Notice of the People’s Bank of China on Full-coverage Macro-prudent Management of Cross-border Financing, or PBOC Circular 9, which sets out an upper limit for mainland China entities, including foreign-invested entities and domestic-invested entities, regarding their foreign debts, or the Financing Limit.
As to net assets, entities shall take the net assets value stated in their respective latest audited financial statement in calculation; the cross-border financing leverage ratio for enterprises is two (2); the macro-prudent regulation parameter is one (1). The PBOC Circular 9 does not supersede the Interim Provisions on the Management of Foreign Debts.
As to net assets, entities shall take the net assets value stated in their respective latest audited financial statement in calculation; the cross-border financing leverage ratio for enterprises is two (2); the macro-prudent regulation parameter is one (1). PBOC Circular 9 does not supersede the Interim Provisions on the Management of Foreign Debts.
Participants of a stock incentive plan who are mainland China residents must retain a qualified mainland China agent, which could be a mainland China subsidiary of the overseas publicly-listed company or another qualified institution selected by the mainland China subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants.
Participants of a stock incentive plan who are mainland China residents must retain a qualified mainland China agent, which could be a mainland China subsidiary of the overseas publicly-listed company or another qualified institution selected by the mainland China subsidiary, to conduct SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants.
In addition, the mainland China agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the mainland China agent or the overseas entrusted institution or other material changes.
In addition, the mainland China agent is required to amend SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the mainland China agent or the overseas entrusted institution or other material changes.
Risk Factors—Risks Related to Doing Business in China—Increases in labor costs and enforcement of stricter labor laws and regulations of mainland China may adversely affect our business and our profitability.” Regulations Relating to Foreign Exchange Regulations on Foreign Currency Exchange The SAFE promulgated the Circular on Issues Relating to the Administration of Foreign Exchange of Offshore Investment and Financing through Special Purpose Vehicles and Round-Tripping Investment by mainland China Resident, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75.” SAFE Circular 37 requires mainland China residents to register with local branches of the SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of offshore investment and financing, with such mainland China residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by mainland China residents, share transfer or exchange, merger, division or other material event.
Risk Factors —Risks Related to Doing Business in China—Enforcement of stricter labor laws and regulations of mainland China may adversely affect our business and our profitability.” Regulations Relating to Foreign Exchange Regulations on Foreign Currency Exchange SAFE promulgated the Circular on Issues Relating to the Administration of Foreign Exchange of Offshore Investment and Financing through Special Purpose Vehicles and Round-Tripping Investment by mainland China Resident, or SAFE Circular 37, on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75.” SAFE Circular 37 requires mainland China residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of offshore investment and financing, with such mainland China residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by mainland China residents, share transfer or exchange, merger, division or other material event.
Their enthusiasm, experience and expertise, together with our user-centric product development philosophy, have allowed us to design and deliver high-performance smart e-scooters and made us the pioneer in urban mobility solutions we are today. Platform-based Engineering System We have developed a platform-based engineering system. The system is based on the same in-scooter control and data connection systems.
Their enthusiasm, experience and expertise, together with our user-centric product development philosophy, have allowed us to design and deliver high-performance smart e-scooters and made us the pioneer in urban mobility solutions we are today. Platform-based Engineering System We have developed a platform-based engineering system, which is based on the same in-scooter control and data connection systems.
We sponsor and participate in non-profit social activities such as marathons, through which we exemplify green and lifestyle, and it has been positively received by runners and spectators nationwide. Overseas marketing We invest in overseas marketing with a view to raise our brand awareness in the international markets.
In addition, we sponsor and participate in non-profit social activities such as marathons, through which we exemplify green and lifestyle, and it has been positively received by runners and spectators nationwide. Overseas marketing We invest in overseas marketing with a view to raise our brand awareness in the international markets.
If we or any of the VIE are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
If we or any of the VIE are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
For example, pursuant to the Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, local authorities will issue new automobile license plates to qualified purchasers of new energy vehicles without requiring such qualified purchasers to go through certain license-plate bidding processes and to pay license-plate purchase fees. 78 Table of Contents Regulations on Production Safety , Pursuant to the Production Safety Law of the PRC, or the Production Safety Law, which took effect on November 1, 2002 and was amended on August 31, 2014, the entities that are engaged in production and business operation activities must implement national industrial standards which guarantee the production safety and comply with production safety requirements provided by the laws, administrative regulations and national or industrial standards.
For example, pursuant to the Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, local authorities will issue new automobile license plates to qualified purchasers of new energy vehicles without requiring such qualified purchasers to go through certain license-plate bidding processes and to pay license-plate purchase fees. 76 Table of Contents Regulations on Production Safety , Pursuant to the Production Safety Law of the PRC, or the Production Safety Law, which took effect on November 1, 2002 and was amended on August 31, 2014, the entities that are engaged in production and business operation activities must implement national industrial standards which guarantee the production safety and comply with production safety requirements provided by the laws, administrative regulations and national or industrial standards.
Under the Regulations on the Administration of Housing Funds, promulgated by the State Council on April 3, 1999 and as amended on March 24, 2002 and March 24, 2019, an employer is required to make contributions to a housing fund for its employees. See “Item 3. Key Information— D.
Under the Regulations on the Administration of Housing Funds, promulgated by the State Council on April 3, 1999 and amended on March 24, 2002 and March 24, 2019, an employer is required to make contributions to a housing fund for its employees. See “Item 3. Key Information—D.
The latest version became effective on August 1, 2022. Under the App Provisions, mobile app information service providers are required to obtain relevant qualifications prescribed by laws and regulations, take responsibility for the supervision and administration of mobile app information as required by laws and regulations and implement the information security management responsibilities.
The latest version became effective on August 1, 2022. Under the App Provisions, mobile app information service providers are required to obtain the qualifications prescribed by laws and regulations, take responsibility for the supervision and administration of mobile app information as required by laws and regulations and implement the information security management responsibilities.
An enterprise must file an application to the provincial administration of quality and technology supervision for the license of producing the products listed in the Production Catalog. Otherwise, relevant authorities can impose fines and other administrative sanctions, and serious violations may result in criminal liabilities.
An enterprise must file an application to the provincial administration of quality and technology supervision for the license of producing the products listed in the Production Catalog. Otherwise, the authorities can impose fines and other administrative sanctions, and serious violations may result in criminal liabilities.
The Standard Contract Measures apply to the provision of personal information to overseas recipients through standard contract and set out detailed criteria relating to the formality and terms of such contracts. The Standard Contract Measures also requires the personal information processor to file such contract with relevant authorities within 10 business days after the contract is effective.
The Standard Contract Measures apply to the provision of personal information to overseas recipients through standard contract and set out detailed criteria relating to the formality and terms of such contracts. The Standard Contract Measures also requires the personal information processor to file such contract with the authorities within 10 business days after the contract is effective.
Under the Stock Option Rules and other relevant rules and regulations, mainland China residents who participate in a stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures.
Under the Stock Option Rules and other rules and regulations, mainland China residents who participate in a stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures.
In May 2020, we made prepayment of RMB39.4 million in addition to prepayment of RMB2 million in 2019 to acquire land use rights of a piece of land with total area of 61,148 square meters. In January 2021, we obtained the land use rights certificate.
In May 2020, we made prepayment of RMB39.4 million in addition to prepayment of RMB2.0 million in 2019 to acquire land use rights of a piece of land with total area of 61,148 square meters. In January 2021, we obtained the land use rights certificate.
In February 2021, we completed the registration of the equity pledge under the second amended and restated equity pledge agreement with the relevant local office of the State Administration of Market Regulation in accordance with the PRC Property Rights Law. Spousal Consent Letters.
In February 2021, we completed the registration of the equity pledge under the second amended and restated equity pledge agreement with the local office of the State Administration of Market Regulation in accordance with the PRC Property Rights Law. Spousal Consent Letters.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Regulations on Value-Added Tax Pursuant to the Provisional Regulation of the PRC on Value-Added Tax issued by the State Council, effective on January 1, 1994, which was amended on November 10, 2008, February 6, 2016 and on November 19, 2017, or the Provisional Regulation, and its Implementing Rules, all entities and individuals that are engaged in the sale of goods, the provision of processing, repairs and installation services and the importation of goods in mainland China are required to pay a valued-added tax, or VAT.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” ​ 85 Table of Contents Regulations on Value-Added Tax Pursuant to the Provisional Regulation of the PRC on Value-Added Tax issued by the State Council, effective on January 1, 1994, which was amended on November 10, 2008, February 6, 2016 and on November 19, 2017, or the Provisional Regulation, and its Implementing Rules, all entities and individuals that are engaged in the sale of goods, the provision of processing, repairs and installation services and the importation of goods in mainland China are required to pay a valued-added tax, or VAT.
Regulations on Trademark Pursuant to the Trademark Law of the PRC promulgated by the Standing Committee of the National People’s Congress on August 23, 1982 and respectively revised on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, and the Regulation on the Implementation of the Trademark Law of the PRC (revised in 2014) promulgated by the State Council on August 3, 2002 and revised on April 29, 2014, the right to the exclusive use of a registered trademark is limited to trademarks which have been approved for registration and to goods for which the use of such trademark has been approved.
Regulations on Trademark Pursuant to the Trademark Law of the PRC promulgated by the Standing Committee of the National People’s Congress on August 23, 1982 and amended on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, and the Regulation on the Implementation of the Trademark Law of the PRC (revised in 2014) promulgated by the State Council on August 3, 2002 and amended on April 29, 2014, the right to the exclusive use of a registered trademark is limited to trademarks which have been approved for registration and to goods for which the use of such trademark has been approved.
Our distributors sell our products primarily in the following three types of stores in overseas markets: ● branded flagship stores, which are located in the core business areas in major cities, have a space of over 100 square meters, and carry our smart e-scooters exclusively. ● shop-in-shop stores, which are located in downtowns in major cities, where the entire store has a space of over 100 square meters, and have a designated section for our smart e-scooters with a space of over 30 square meters. ● other point of sales, which are licensed to carry our smart e-scooters on a non-exclusive basis.
Our distributors sell our products primarily in the following three types of stores in international markets: ● branded flagship stores, which are located in the core business areas in major cities, have a space of over 100 square meters, and carry our smart e-scooters exclusively. ● shop-in-shop stores, which are located in downtowns in major cities, where the entire store has a space of over 100 square meters, and have a designated section for our smart e-scooters with a space of over 30 square meters. ● other point of sales, which are licensed to carry our smart e-scooters on a non-exclusive basis.
In addition, the categories of such non-motorized vehicles shall be determined by provincial governments in light of their respective actual local situation and shall consist of technical standards in terms of overall weight, braking performance, overall size and reflectors, which all non-motorized vehicles should abide by. We have obtained the production license for electric bicycles according to relevant regulations.
In addition, the categories of such non-motorized vehicles shall be determined by provincial governments in light of their respective actual local situation and shall consist of technical standards in terms of overall weight, braking performance, overall size and reflectors, which all non-motorized vehicles should abide by. We have obtained the production license for electric bicycles according to applicable regulations.
Pursuant to the Circular on Strengthening the Management of Electric Bicycles, jointly promulgated by the State Administration for Industry and Commerce, the AQSIQ, the Ministry of Public Security, or the MPS, and the MIIT on March 18, 2011, any non-compliant vehicle may not be registered as a non-motorized vehicle, which in turn means it shall be deemed street-illegal.
Pursuant to the Circular on Strengthening the Management of Electric Bicycles, jointly promulgated by the State Administration for Industry and Commerce, the AQSIQ, the Ministry of Public Security and the MIIT on March 18, 2011, any non-compliant vehicle may not be registered as a non-motorized vehicle, which in turn means it shall be deemed street-illegal.
Besides, Jiangsu Xiaoniu has been listed in the Road Motor Vehicle Manufacturers and Products List (batch 327) issued by MITT on January 13, 2020 as an enterprise permitted to manufacture motorcycles and we have obtained the World Manufacturer Identifier (WMI) and Vehicle Identification Number (VIN). See “Item 3. Key Information—D.
Besides, Jiangsu Xiaoniu has been listed in the Road Motor Vehicle Manufacturers and Products List (batch 327) issued by MIIT on January 13, 2020 as an enterprise permitted to manufacture motorcycles and we have obtained the World Manufacturer Identifier (WMI) and Vehicle Identification Number (VIN). See “Item 3. Key Information—D.
Furthermore, the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties, which became effective on January 1, 2020, requires non-resident enterprises to determine whether they are qualified to enjoy the preferential tax treatment under the tax treaties and file relevant report and materials with the tax authorities. We may be classified as mainland China resident tax payers.
Furthermore, the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties, which became effective on January 1, 2020, requires non­resident enterprises to determine whether they are qualified to enjoy the preferential tax treatment under the tax treaties and file certain report and materials with the tax authorities. We may be classified as mainland China resident tax payers.
In June 2018, our WFOE and Jiangsu Xiaoniu entered into the amended and restated exclusive business cooperation agreement, which contains terms substantially similar to the amended and restated exclusive business cooperation agreement between our WFOE and Beijing Niudian described above. 89 Table of Contents Agreements that provide us with the option to purchase the equity interests in and assets of the VIE Second Amended and Restated Exclusive Option Agreements.
In June 2018, our WFOE and Jiangsu Xiaoniu entered into the amended and restated exclusive business cooperation agreement, which contains terms substantially similar to the amended and restated exclusive business cooperation agreement between our WFOE and Beijing Niudian described above. 88 Table of Contents Agreements that provide us with the option to purchase the equity interests in and assets of the VIE Second Amended and Restated Exclusive Option Agreements.
The PACK technology protects the battery cells from impact and regulates battery temperature, and use voltage, temperature, current, or PTC, technology to compartmentalize each cell, thereby ensuring the integrity of the battery pack. Our battery packs can be charged either standalone or when installed on the e-scooter, both of which can be through a home wall plug.
The PACK technology protects the battery cells from impact and regulates battery temperature, and use voltage, temperature, current, or PTC technology to protect each cell, thereby ensuring the integrity of the battery pack. Our battery packs can be charged either standalone or when installed on the e-scooter, both of which can be through a home wall plug.
On March 15, 2019, the Foreign Investment Law of PRC, or the FIL, was issued by the National People’s Congress and took effect on January 1, 2020, which also provides that the industries in which foreign investment is not restricted and prohibited shall be administered under the principle of equal treatment to domestic investment.
On March 15, 2019, the Foreign Investment Law of PRC was issued by the National People’s Congress and took effect on January 1, 2020, which also provides that the industries in which foreign investment is not restricted and prohibited shall be administered under the principle of equal treatment to domestic investment.
Regulations Relating to Taxation Regulations on Enterprise Income Tax Under the Enterprise Income Tax Law of the PRC, or the EIT Law, which was promulgated on March 16, 2007, amended on February 24, 2017 and December 29, 2018, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises.
Regulations Relating to Taxation Regulations on Enterprise Income Tax Under the Enterprise Income Tax Law of the PRC, which was promulgated on March 16, 2007, amended on February 24, 2017 and December 29, 2018, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises.
Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with the regulations of mainland China relating to the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “Item 3.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government funds that the agreements that establish the structure for operating some of our operations in mainland China do not comply with the regulations of mainland China relating to the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “Item 3.
It also stipulates certain specific rules with respect to the obligations of a personal information processor, such as to inform the purpose and method of processing to the individuals, and the obligation of the third party who has access to the personal information by way of co-processing or delegation. 82 Table of Contents The Data Security Law of the People’s Republic of China, or the Data Security Law, was passed on June 10, 2021 and came into effect on September 1, 2021.
It also stipulates certain specific rules with respect to the obligations of a personal information processor, such as to inform the purpose and method of processing to the individuals, and the obligation of the third party who has access to the personal information by way of co-processing or delegation. ​ The Data Security Law of the People’s Republic of China, or the Data Security Law, was passed on June 10, 2021 and came into effect on September 1, 2021.
Regulations Relating to Foreign Investment Pursuant to the Special Administrative Measures for Market Access of Foreign Investment (Negative List) (2021 Edition), or the 2021 Negative List, jointly issued by the NDRC and the MOFCOM on December 27, 2021 and enforced on January 1, 2022, the foreign investment related to design, manufacture and sale of electricity bicycles does not fall within the category of industries in which foreign investment is restricted or prohibited.
Regulations Relating to Foreign Investment Pursuant to the Special Administrative Measures for Market Access of Foreign Investment (Negative List) (2021 Edition), or the 2021 Negative List, jointly issued by the NDRC and the Ministry of Commerce on December 27, 2021 and enforced on January 1, 2022, the foreign investment related to design, manufacture and sale of electricity bicycles does not fall within the category of industries in which foreign investment is restricted or prohibited.
We also use data collected by other means to improve the performance of our stores. This information helps us adjust store-specific retailing and marketing strategies, thereby increasing per store sales. In addition to offering smart e-scooters, our stores also serve as our service stations to provide after-sales services such as inspection, maintenance and repair services.
We also use data collected by other means to improve the performance of our stores. This information helps us adjust store-specific retailing and marketing strategies, thereby increasing per store sales. 71 Table of Contents In addition to offering smart e-scooters, our stores also serve as our service stations to provide after-sales services such as inspection, maintenance and repair services.
Our new global R&D and manufacturing base includes a dedicated quality control laboratory equipped with full-automatic and semi-automatic instruments for components testing, and self-developed inspection systems for battery cell quality testing. We have not experienced any massive product recall, massive refunds or other quality control outbreak since we started to sell e-scooters.
Our new global R&D and manufacturing base includes a dedicated quality control laboratory equipped with full-automatic and semi-automatic instruments for components testing, and proprietary inspection systems for battery cell quality testing. We have not experienced any massive product recall, massive refunds or other quality control outbreak since we started to sell e-scooters.
We have different shipping methods for our finished products depending on the type of the distribution channel: (i) for our offline domestic distribution channels, our city partners and franchised stores are responsible for logistics from the moment products are rolled out of the factory; (ii) for local distributors in overseas markets, we ship our products mainly under FOB terms; and (iii) for online shopping platforms such as our official website and third-party platforms such as JD.com and Tmall, we ship our products through third-party delivery services.
We have different shipping methods for our finished products depending on the type of the distribution channel: (i) for our offline domestic distribution channels, our city partners and franchised stores are responsible for logistics from the moment products are rolled out of the factory; (ii) for local distributors in international markets, we ship our products mainly under FOB or DDP terms; and (iii) for online shopping platforms such as our official website and third-party platforms such as JD.com and Tmall, we ship our products through third-party delivery services.
Regulations on Registration of Motorcycles Pursuant to the Provisions on the Registration of Motor Vehicles of the PRC promulgated on May 27, 2008, amended on December 17, 2021 and will come into effect on May 1, 2022, the owner of a motor vehicle, including motorcycles, shall apply for registration of such motor vehicle after obtaining the certificate of qualified motor vehicle safety technical inspection from a local motor vehicle safety technical inspection institution.
Regulations on Registration of Motorcycles Pursuant to the Provisions on the Registration of Motor Vehicles of the PRC promulgated on May 27, 2008, amended on December 17, 2021 and came into effect on May 1, 2022, the owner of a motor vehicle, including motorcycles, shall apply for registration of such motor vehicle after obtaining the certificate of qualified motor vehicle safety technical inspection from a local motor vehicle safety technical inspection institution.
We also entered into a definitive Development Collaboration Agreement in March 2019 with one of the world’s leading automobile manufacturers regarding joint development of Micro-mobility solutions, which was carried out by the Lab. 70 Table of Contents Global R&D and Manufacturing Base Our new global R&D and manufacturing base commenced operation in December 2019.
We also entered into a definitive Development Collaboration Agreement in March 2019 with one of the world’s leading automobile manufacturers regarding joint development of Micro-mobility solutions, which was carried out by the Lab. Global R&D and Manufacturing Base Our new global R&D and manufacturing base commenced operation in December 2019.
NIU fan clubs are established in over 30 cities in China, where fans actively organize NIU scooter-related events. Capitalizing on our premium brand, we have also been able to sell lifestyle accessories, which are well received by customers. We have adopted a user-centric philosophy to design our products.
NIU fan clubs are established in 36 cities in China, where fans actively organize NIU scooter-related events. Capitalizing on our premium brand, we have also been able to sell lifestyle accessories, which are well received by customers. We have adopted a user-centric philosophy to design our products.
On November 27, 2018, the MITT promulgated the Administration Measures for Access of the Road Motor Vehicle Manufacturing Enterprises and Products, which became effective on June 1, 2019 and replaced the Motorcycle Manufacturing Measures and the Motorcycle Manufacturing Rules.
On November 27, 2018, the MIIT promulgated the Administration Measures for Access of the Road Motor Vehicle Manufacturing Enterprises and Products, which became effective on June 1, 2019 and replaced the Motorcycle Manufacturing Measures and the Motorcycle Manufacturing Rules.
The dashboard features a card-based interface to present the most useful and relevant information to the users based on users’ preferences, which is both intuitive and has great potential for customization and expandability. 64 Table of Contents NIU Services Through the NIU app, users can access a variety of services. ● Online repair request.
The dashboard features a card-based interface to present the most useful and relevant information to the users based on users’ preferences, which is both intuitive and has great potential for customization and expandability. NIU Services Through the NIU app, users can access a variety of services. ● Online repair request.
On March 20, 2019, the Announcement on Relevant Policies for Deepening Value-Added Tax Reform was jointly promulgated the Ministry of Finance, the SAT and the General Administration of Customs, which further provides that effective from the date of April 1, 2019, the VAT rate of gross proceeds from sales and importation of goods and provision of services shall be adjusted from 16% to 13%, with the VAT rate of certain categories of goods shall be adjusted from 10% to 9%.
On March 20, 2019, the Announcement on Relevant Policies for Deepening Value-Added Tax Reform was jointly promulgated the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs, which further provides that effective from April 1, 2019, the VAT rate of gross proceeds from sales and importation of goods and provision of services shall be adjusted from 16% to 13%, with the VAT rate of certain categories of goods shall be adjusted from 10% to 9%.
Risk Factors—Risks Relating to Our Business—Our products are subject to safety standards and failure to satisfy such mandated standards would have a material adverse effect on our business and operating results.” 77 Table of Contents Regulations on Registration of Electric Bicycles Pursuant to the Road Traffic Safety Law of the PRC (Revised in 2021), a non-motorized vehicle which ought to be lawfully registered shall be deemed street-illegal until it has been registered with the local traffic administrative department.
Risk Factors—Risks Related to Our Business and Industry—Our products are subject to safety standards and failure to satisfy such mandated standards would have a material adverse effect on our business and operating results.” 75 Table of Contents Regulations on Registration of Electric Bicycles Pursuant to the Road Traffic Safety Law of the PRC (Revised in 2021), a non-motorized vehicle which ought to be lawfully registered shall be deemed street-illegal until it has been registered with the local traffic administrative department.
Orders from niu.com or other e-commerce platforms are faster to fulfill, usually within two days. Through proactive planning, we are able to estimate the distribution of orders in a certain period of time and improve the predictability of our order fulfillment.
Orders from niu.com or other e-commerce platforms are faster to fulfill, usually within two days. 70 Table of Contents Through proactive planning, we are able to estimate the distribution of orders in a certain period of time and improve the predictability of our order fulfillment.
On April 4, 2018, the Circular of the Ministry of Finance and the SAT on Adjusting Value-Added Tax Rates was promulgated, which provides that effective from the date of May 1, 2018, gross proceeds from sales and importation of goods and provision of services are generally subject to a VAT rate of 16%, with exceptions for certain categories of goods that are taxed at a VAT rate of 10%.
On April 4, 2018, the Circular of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-Added Tax Rates was promulgated, which provides that effective from the date of May 1, 2018, gross proceeds from sales and importation of goods and provision of services are generally subject to a VAT rate of 16%, with exceptions for certain categories of goods that are taxed at a VAT rate of 10%.
NIU Innovation Lab Our NIU Innovation Lab hosts our research and development teams of 224 members, which include, among others, our user experience design team, smart electronic research team, powertrain design team and industrial design team.
NIU Innovation Lab Our NIU Innovation Lab hosts our research and development teams of 162 members, which include, among others, our user experience design team, smart electronic research team, powertrain design team and industrial design team.
Together, these systems constitute the technical backbone of our position-based anti-theft systems as well as functions such as riding map and smart e-scooter sharing, which are capable of detecting unauthorized movements of our smart e-scooters. Connectivity and Data Transmission.
Together, these systems constitute the technical backbone of our position-based anti-theft systems as well as functions such as riding map and smart e-scooter sharing, which are capable of detecting unauthorized movements of our smart e-scooters. 66 Table of Contents Connectivity and Data Transmission.
Driver Assistance We have developed various driver assistance technologies to enhance the rider experience of our smart e-scooters such as automatic headlight, automatic return indicators, cruise control and smart self-diagnosis systems. We continue to look for ways to enhance the user experience.
Driver Assistance We have developed various driver assistance technologies to enhance the rider experience of our smart e-scooters such as automatic headlight, automatic return indicators, cruise control and smart self-diagnosis systems. 67 Table of Contents We continue to look for ways to enhance the user experience.
On December 28, 2021, the Cyberspace Administration of China, together with other twelve government authorities, jointly released the Cybersecurity Review Measures, which came into effect on February 15, 2022. The Measures require operators of critical information infrastructure to go through cybersecurity review when purchasing any network products and services with a potential impact on national security.
On December 28, 2021, the CAC, together with other twelve government authorities, jointly released the Cybersecurity Review Measures, which came into effect on February 15, 2022. The Measures require operators of critical information infrastructure to go through cybersecurity review when purchasing any network products and services with a potential impact on national security.
In addition, our smart e-scooters are also equipped with dual-mode Bluetooth chips, which allow owners of our smart e-scooters to use their smartphones to directly communicate with our e-scooters. Owners can, among others, query the smart e-scooter’s status and change certain settings such as adjusting the sensitivity level of the anti-theft alert. OM Updates.
In addition, our smart e-scooters are also equipped with dual-mode Bluetooth chips, which allow owners of our smart e-scooters to use their smartphones to directly communicate with our e-scooters. Owners can, among others, query the smart e-scooter’s status and change certain settings such as adjusting the sensitivity level of the anti-theft alert. Intelligent Interaction.
Furthermore, on December 19, 2020, the NDRC and the MOFCOM jointly issued the Measures for Security Review of Foreign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review of foreign investment that has a potential impact on national security.
Furthermore, on December 19, 2020, the NDRC and the Ministry of Commerce jointly issued the Measures for Security Review of Foreign Investment, effective on January 18, 2021, which provides detailed guidance regarding security review of foreign investment that has a potential impact on national security.
However, the Cybersecurity Review Measures and the Draft Regulations remain unclear on whether the relevant requirements will be applicable to companies that have been listed in the United States. Furthermore, the Data Export Measures were released by the CAC on July 7, 2022 and came into effect on September 1, 2022.
However, the Cybersecurity Review Measures and the Regulations on the Network Data Security remain unclear on whether the requirements will be applicable to companies that have been listed in the United States. Furthermore, the Data Export Measures were released by the CAC on July 7, 2022 and came into effect on September 1, 2022.
The Opinions provides that the market supervision department shall strengthen the management of CCC certification for electric bicycles, strengthen inspections of certification agencies and manufacture enterprises, and shall only allow vehicles that meet the Electric Bicycle Standard and obtained CCC certification flowing into the market.
The Opinions provides that the market supervision department shall strengthen the management of China Compulsory Certification for electric bicycles, strengthen inspections of certification agencies and manufacture enterprises, and shall only allow vehicles that meet the Electric Bicycle Standard and obtained China Compulsory Certification flowing into the market.
Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties in the interpretation and enforcement of the laws and regulations of mainland China could limit the legal protections available to you and us.” 90 Table of Contents D.
Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties in the interpretation and enforcement of the laws and regulations of mainland China could limit the legal protections available to you and us.” D.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the State Administration of Taxation, if the PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
As of the same date, we had 354 applications for patents and trademarks pending in mainland China, Europe and other jurisdictions.
As of the same date, we had 316 applications for patents and trademarks pending in mainland China, Europe and other jurisdictions.
Domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration.
Domain name registrations are handled through domain name service agencies established under the applicable regulations, and the applicants become domain name holders upon successful registration.
We collect user-related data after receiving users’ consent. Users in Europe have the option to choose whether or not to send the GPS related data to us due to different data privacy regulations in these regions. 66 Table of Contents After-Sales Services We offer comprehensive after-sale services including value-added services.
We collect user-related data after receiving users’ consent. Users in Europe have the option to choose whether or not to send the GPS related data to us due to different data privacy regulations in these regions. After-Sales Services We offer comprehensive after-sale services including value-added services.
Regulations on Patent The Patent Law of the PRC promulgated by the Standing Committee of the National People’s Congress and revised on October 17, 2020 which took effect on June 1, 2021, the Detailed Rules for the Implementation of the Patent Law of the PRC (revised in 2010) promulgated by the State Council provide for patentable inventions, utility models and designs, which must meet three conditions: novelty, inventiveness and practical applicability.
Regulations on Patent The Patent Law of the PRC promulgated by the Standing Committee of the National People’s Congress on October 17, 2020 and effective on June 1, 2021, the Detailed Rules for the Implementation of the Patent Law of the PRC (revised in 2023) promulgated by the State Council provide for patentable inventions, utility models and designs, which must meet three conditions: novelty, inventiveness and practical applicability.
Risk Factors—Risks Relating to Our Business—We may be compelled to undertake product recalls or take other actions, which could adversely affect our brand image and results of operations.” Regulations Relating to Foreign Trade Pursuant to the Foreign Trade Law of the PRC, promulgated on May 12, 1994 and amended on April 6, 2004, November 7, 2016, and December 30, 2022, respectively, and the Measures for the Record Filing and Registration of Foreign Trade Business Operators promulgated by MOFCOM on June 25, 2004, effective on July 1, 2004, and amended on August 18, 2016, November 30, 2019 and May 10, 2021, respectively, foreign trade operators engaged in the import and export of goods or the import and export of technology must register with MOFCOM or its authorized institution.
Risk Factors—Risks Related to Our Business and Industry—We may be compelled to undertake product recalls or take other actions, which could adversely affect our brand image and results of operations.” 77 Table of Contents Regulations Relating to Foreign Trade Pursuant to the Foreign Trade Law of the PRC, promulgated on May 12, 1994 and amended on April 6, 2004, November 7, 2016, and December 30, 2022, and the Measures for the Record Filing and Registration of Foreign Trade Business Operators promulgated by the Ministry of Commerce on June 25, 2004, effective on July 1, 2004, and amended on August 18, 2016, November 30, 2019 and May 10, 2021, foreign trade operators engaged in the import and export of goods or the import and export of technology must register with the Ministry of Commerce or its authorized institution.
We also utilize the data and feedback to provide updates to our firmware regularly over-the-air (OTA) to fine-tune the performance of our smart e-scooters and improve overall user experience. Our research and development team comprises motorbike enthusiasts with years of motor biking experience.
We also utilize the data and feedback to provide updates to our firmware regularly over-the-air (OTA) to fine-tune the performance of our smart e-scooters and improve overall user experience. Our research and development team comprise motorcycle enthusiasts with years of motor biking experience.
The Lab focuses on industrial design, structural design, smart electronics research, power electronics research, user data analysis, business intelligence system development and user experience research. The Lab and our research and development team played a crucial role in the creation of the 563 patents we held as of December 31, 2022.
The Lab focuses on industrial design, structural design, smart electronics research, power electronics research, user data analysis, business intelligence system development and user experience research. The Lab and our research and development team played a crucial role in the creation of the 582 patents we held as of December 31, 2023.
Hardware Component and Design We use the Lithium-ion battery cells as the building blocks of our battery pack. A matrix of battery cells is connected in parallel to produce a robust battery pack. 67 Table of Contents Our battery packs incorporate PACK technology, which is adopted by global automakers globally.
Hardware Component and Design We use the Lithium-ion battery cells as the building blocks of our battery pack. A matrix of battery cells is connected in parallel to produce a robust battery pack. Our battery packs incorporate PACK technology, which is adopted by automakers globally.
In addition, under the Provisional Regulation, the input VAT for the purchase of fixed assets is deductible from the output VAT, except for goods or services that are used in non-VAT taxable items, VAT exempted items and welfare activities, or for personal consumption. ​ 87 Table of Contents C.
In addition, under the Provisional Regulation, the input VAT for the purchase of fixed assets is deductible from the output VAT, except for goods or services that are used in non-VAT taxable items, VAT exempted items and welfare activities, or for personal consumption.
In August 2022, our SQi series collaborated with Razer, the world’s top gaming hardware brand, on a joint product event that received widespread recognition and praise in the gaming community and on social media, especially among the young people.
In August 2022, our SQi series collaborated with Razer, the world’s top gaming hardware brand, on a joint product event that received widespread recognition and praise in the gaming community and on social media, especially among the younger demographic.
In August 2022, our SQi series collaborated with Razer, the world’s top gaming hardware brand, on a joint product event that received widespread recognition and praise in the gaming community and on social media, especially among the young people.
In August 2022, our SQi series collaborated with Razer, the world’s top gaming hardware brand, on a joint product event that received widespread recognition and praise in the gaming community and on social media, especially among the younger demographic.
We have obtained CCC certification for all of our current for-sale products, and will try to obtain CCC certification for our future products. See “Item 3. Key Information— D.
We have obtained China Compulsory Certification for all of our current for-sale products, and will try to obtain China Compulsory Certification for our future products. See “Item 3. Key Information— D.
Risk Factors—Risks Relating to Our Business—We may need to defend ourselves against patent, trademark or other intellectual property rights infringement claims, which may be time-consuming and would cause us to incur substantial costs.” 84 Table of Contents Regulations on Domain Name Internet domain name registration and related matters are primarily regulated by the Measures on Administration of Internet Domain Names promulgated by the MIIT on August 24, 2017 and came into effect on November 1, 2017, and the Implementing Rules of China ccTLD Registration issued by China Internet Network Information Center on June 18, 2019.
Risk Factors—Risks Related to Our Business and Industry—We may need to defend ourselves against patent, trademark or other intellectual property rights infringement claims, which may be time-consuming and would cause us to incur substantial costs.” Regulations on Domain Name Internet domain name registration and related matters are primarily regulated by the Measures on Administration of Internet Domain Names promulgated by the MIIT on August 24, 2017 and effective on November 1, 2017, and the Implementing Rules of China ccTLD Registration issued by China Internet Network Information Center on June 18, 2019.
NIU clubs are one of the core components of NIU community, and there were over 30 of NIU clubs as of December 31, 2022. Formed and run by the enthusiastic NIU fans, these NIU dubs organize various events, such as new product test drives, riding for good causes, and scooter parades.
NIU clubs are one of the core components of NIU community, and there were over 100 of NIU clubs as of December 31, 2023. Formed and run by the enthusiastic NIU fans, these NIU clubs organize various events, such as new product test drives, riding for good causes, and scooter parades.
On February 22, 2023, the CAC issued the Measures for the Standard Contract for the Outbound Transfer of Personal Information, or the Standard Contract Measures, which will take effect on June 1, 2023.
On February 22, 2023, the CAC issued the Measures for the Standard Contract for the Outbound Transfer of Personal Information, or the Standard Contract Measures, which took effect on June 1, 2023.
The NQi series utilizes a state-of-the-art lithium-ion battery pack that achieves extended range with light weight. MQi Series Our MQi series smart e-scooters consists of the MQiS, MQi2, MQi+, MQi-GT and MQi-GT EVO models. The MQi series is a cool and fresh-looking smart e-scooter designed for young urban users.
The NQi series utilizes a state-of-the-art lithium-ion battery pack that achieves extended range with light weight. 61 Table of Contents MQi Series Our MQi series smart e-scooters consist of the MQiS, MQi2, MQi+, MQiL, MQi-GT and MQi-GT EVO models. The MQi series is a cool and fresh-looking smart e-scooter designed for young urban users.
Manufacturing and Fulfillment We design, manufacture and sell high-performance electric bicycles and motorcycles. We view the manufacturers and suppliers we work with as key partners through our product development process and leverages their industry expertise to ensure that each product that we produce meets our strict quality standards.
Manufacturing and Fulfillment We design, manufacture and sell high-performance electric motorcycles, mopeds, bicycles, as well as kick-scooters and e-bikes. We view the manufacturers and suppliers we work with as key partners through our product development process and leverages their industry expertise to ensure that each product that we produce meets our strict quality standards.
Its design language is modern and minimalistic. The NQi series is equipped with advanced powertrain consisting of the removable lithium-ion battery pack with our proprietary battery management system, the BOSCH motor or NIU motor, and our proprietary Field Oriented Control, or the FOC, system that controls the electric motors.
The NQi series is equipped with advanced powertrain consisting of the removable lithium-ion battery pack with our proprietary battery management system, the BOSCH motor or NIU motor, and our proprietary Field Oriented Control, or the FOC, system that controls the electric motors.
Key Information—D. Risk Factors—Risks Relating to Our Business—We may face intense competition in the electric two-wheeled vehicles industry.” Intellectual Property Our success depends, at least in part, on our ability to protect our core technology and intellectual property.
Risk Factors—Risks Related to Our Business and Industry—We may face intense competition in the electric two-wheeled vehicles industry.” Intellectual Property Our success depends, at least in part, on our ability to protect our core technology and intellectual property.
According to this announcement, the production license regulatory regime is implemented pursuant to the new electric bicycle technical standard, which is the Safety and Technical Specification for Electric Bicycle (GB 17761-2018), or the Electric Bicycle Standard, promulgated by the State Administration for Market Regulation and the National Standardization Management Committee on May 15, 2018 and became effective on April 15, 2019.
According to this announcement, the production license regulatory regime is implemented pursuant to the new electric bicycle technical standard, which is the Safety and Technical Specification for Electric Bicycle (GB 17761-2018), or the Electric Bicycle Standard, promulgated by the SAMR and the National Standardization Management Committee on May 15, 2018 and effective on April 15, 2019.
Pursuant to the Double Taxation Avoidance and the Tax Evasion Arrangement, and other applicable laws of mainland China, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under the Double Taxation Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5% upon receiving approval from in-charge tax authority.
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, and other applicable laws of mainland China, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5% upon receiving approval from in-charge tax authority.
In November 2019, the Secretariat of the Cyberspace Administration of China, the General Office of the MITT, the General Office of the Ministry of Public Security and the State Administration for Market Regulation jointly promulgated the Circular on Issuing the Methods for Identifying Unlawful Collection and Use of Personal Information of Applications (“App(s)”), which defines actions that may be regarded as violating the Network Security Law and other personal information protection related regulations, including, among other things, failure to publicize the rules for collection and use of personal information, failure to expressly state the purpose, manner and scope of collecting and using personal information, collection and use of personal information without consent of users, provision of personal information to others without consent, and failure to provide the function of deleting or correcting personal information as required by law.
In November 2019, the Secretariat of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the SAMR jointly promulgated the Circular on Issuing the Methods for Identifying Unlawful Collection and Use of Personal Information of Applications, which defines actions that may be regarded as violating the Network Security Law and other personal information protection related regulations, including, among other things, failure to publicize the rules for collection and use of personal information, failure to expressly state the purpose, manner and scope of collecting and using personal information, collection and use of personal information without consent of users, provision of personal information to others without consent, and failure to provide the function of deleting or correcting personal information as required by law.
Based on the e-scooter activity data we collected, more than 75% of our users rode their e-scooters on a monthly basis in the twelve months ended December 31, 2022. We endeavor to build an interactive and dynamic social community to further convey and brand image as a fashionable urban lifestyle.
Based on the e-scooter activity data we collected, more than 75% of our users rode their e-scooters on a monthly basis in 2023. We endeavor to build an interactive and dynamic social community to further convey and brand image as a fashionable urban lifestyle.
However, although the Transitional Period ended on January 10, 2018, as of December 31, 2022, PBOC or SAFE has not issued any new regulations regarding the application calculation method of foreign debt upper limit for foreign-invested entities.
However, although the Transitional Period ended on January 10, 2018, as of December 31, 2023, the People’s Bank of China or SAFE has not issued any new regulations regarding the application calculation method of foreign debt upper limit for foreign-invested entities.
Our award-winning products represent style, freedom and technology. Our brand “NIU” has inspired many followers and has enabled us to build a loyal user base. We offer the NIU app as an integral part of the user experience and will continue to develop new features within the app to enhance user loyalty.
Our brand “NIU” has inspired many followers and has enabled us to build a loyal user base. We offer the NIU app as an integral part of the user experience and will continue to develop new features within the app to enhance user loyalty.
Property, Plants and Equipment Our headquarters is located in Beijing, China, where we lease and occupy our office space with an aggregate floor area of approximately 1,400 square meters. Our Niu Innovation Lab is located in Shanghai, China, where we lease and occupy our office space with an aggregate floor area of approximately 1,700 square meters.
Property, Plants and Equipment Our headquarters is located in Beijing, China, where we lease and occupy our office space with an aggregate floor area of approximately 2,300 square meters. Our Niu Innovation Lab is located in Shanghai, China, where we lease and occupy our office space with an aggregate floor area of approximately 500 square meters.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

106 edited+31 added−101 removed27 unchanged
Biggest changeYear-to-year comparisons of historical results of operations should not be relied upon as indicative of future performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except for percentage data) Revenues 2,444,329 100.0 3,704,537 100.0 3,168,597 459,404 100.0 Cost of revenues (1) (1,885,180) (77.1) (2,891,758) (78.1) (2,498,916) (362,309) (78.9) Gross profit 559,149 22.9 812,779 21.9 669,681 97,095 21.1 Operating expenses (1) ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses (200,761) (8.2) (332,008) (9.0) (440,409) (63,853) (13.9) Research and development expenses (105,335) (4.3) (135,218) (3.7) (176,478) (25,587) (5.6) General and administrative expenses (104,860) (4.3) (141,799) (3.8) (158,461) (22,975) (5.0) Total operating expenses (410,956) (16.8) (609,025) (16.4) (775,348) (112,415) (24.5) Government grants 22,441 0.9 48,727 1.3 16,385 2,376 0.5 Operating income (loss) 170,634 7.0 252,481 6.8 (89,282) (12,944) (2.8) Interest expenses (7,381) (0.3) (6,168) (0.2) (5,716) (829) (0.2) Interest income 8,787 0.4 5,376 0.1 12,860 1,865 0.4 Investment income 17,698 0.7 21,168 0.6 10,918 1,583 0.3 Income (loss) before income taxes 189,738 7.8 272,857 7.4 (71,220) (10,325) (2.2) Income tax benefit (expense) (21,086) (0.9) (47,037) (1.3) 21,757 3,154 0.7 Net income (loss) 168,652 6.9 225,820 6.1 (49,463) (7,171) (1.6) (1) Share-based compensation expenses are allocated in cost of revenues and operating expenses items as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Cost of revenues 644 847 1,225 178 Selling and marketing expenses 9,945 13,293 15,433 2,237 Research and development expenses 10,918 17,061 22,362 3,242 General and administrative expenses 18,102 16,017 19,199 2,784 Total 39,609 47,218 58,219 8,441 ​ 98 Table of Contents Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 14.5% from RMB3,704.5 million in 2021 to RMB3,168.6 million (US$459.4 million) in 2022, which was primarily due to a decrease in e-scooter sales volume.
Biggest changeYear-to-year comparisons of historical results of operations should not be relied upon as indicative of future performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except for percentage data) Revenues 3,704,537 100.0 3,168,597 100.0 2,651,758 373,492 100.0 Cost of revenues (1) (2,891,758) (78.1) (2,498,916) (78.9) (2,081,011) (293,104) (78.5) Gross profit 812,779 21.9 669,681 21.1 570,747 80,388 21.5 Operating expenses ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses (332,008) (9.0) (440,409) (13.9) (495,735) (69,823) (18.7) Research and development expenses (135,218) (3.7) (176,478) (5.6) (150,986) (21,266) (5.7) General and administrative expenses (141,799) (3.8) (158,461) (5.0) (244,518) (34,439) (9.2) Total operating expenses (1) (609,025) (16.4) (775,348) (24.5) (891,239) (125,528) (33.6) Government grants 48,727 1.3 16,385 0.5 2,969 418 0.1 Operating income (loss) 252,481 6.8 (89,282) (2.8) (317,523) (44,722) (12.0) Interest expenses (6,168) (0.2) (5,716) (0.2) (1,424) (201) (0.1) Interest income 5,376 0.1 12,860 0.4 35,492 4,999 1.3 Investment income 21,168 0.6 10,918 0.3 1,426 201 0.1 Income (loss) before income taxes 272,857 7.4 (71,220) (2.2) (282,029) (39,723) (10.6) Income tax (expense) benefit (47,037) (1.3) 21,757 0.7 10,193 1,436 0.4 Net income (loss) 225,820 6.1 (49,463) (1.6) (271,836) (38,287) (10.3) (1) Share-based compensation expenses are allocated in cost of revenues and operating expenses items as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Cost of revenues 847 1,225 1,238 174 Selling and marketing expenses 13,293 15,433 9,992 1,407 Research and development expenses 17,061 22,362 21,654 3,050 General and administrative expenses 16,017 19,199 14,775 2,082 Total 47,218 58,219 47,659 6,713 ​ Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Our revenues decreased by 16.3% from RMB3,168.6 million in 2022 to RMB2,651.8 million (US$373.5 million) in 2023, which was primarily due to a decrease in e-scooter sales volume.
If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information— D.
If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information— D.
City partners are our distributors, who either open and operate franchised stores or sign up franchised stores, and the franchised stores sell our products and provide services to individual consumers. In overseas markets, we sell to distributors. We generate revenues by selling e-scooters to our city partners in China and overseas distributors at a discount to the retail price.
City partners are our distributors, who either open and operate franchised stores or sign up franchised stores, and the franchised stores sell our products and provide services to individual consumers. In international markets, we sell to distributors. We generate revenues by selling e-scooters to our city partners in China and overseas distributors at a discount to the retail price.
Our ability to enhance our operational efficiency Our ability to achieve profitability is dependent on our ability to further improve our operational efficiency and reduce the total operating expenses as a percentage of our revenues. Excluding share-based compensation expense, selling and marketing expenses have historically represented the largest portion of our total operating expenses.
Our ability to enhance our operational efficiency Our ability to achieve profitability is dependent on our ability to improve our operational efficiency and reduce the total operating expenses as a percentage of our revenues. Excluding share-based compensation expense, selling and marketing expenses have historically represented the largest portion of our total operating expenses.
If we determine that our cash requirements exceed the amount of cash we have on hand, we may seek to issue equity or equity linked securities or obtain debt financing. The issuance and sale of additional equity would result in further dilution to our shareholders.
If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue equity or equity linked securities or obtain debt financing. The issuance and sale of additional equity would result in further dilution to our shareholders.
The implementing rules of the EIT Law define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, property, etc., of a non-mainland China company is located.” Based on a review of surrounding facts and circumstances, we do not believe that it is likely that our operations outside of mainland China should be considered a resident enterprise for mainland China tax purposes.
The implementing rules of the Enterprise Income Tax Law define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, property, etc., of a non-mainland China company is located.” Based on a review of surrounding facts and circumstances, we do not believe that it is likely that our operations outside of mainland China should be considered a resident enterprise for mainland China tax purposes.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our net revenues for the years presented.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” 95 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our net revenues for the years presented.
The EIT law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise, or FIE, to its immediate holding company outside of mainland China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within mainland China or if the received dividends have no connection with the establishment or place of such immediate holding company within mainland China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a different withholding arrangement.
The Enterprise Income Tax Law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise to its immediate holding company outside of mainland China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within mainland China or if the received dividends have no connection with the establishment or place of such immediate holding company within mainland China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a different withholding arrangement.
Key Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving China’s electric two-wheeled vehicles industry, including, among others, China’s overall economic growth, the increase in per capita disposable income, the expansion of urbanization, the growth in consumer spending and consumption upgrades, the competitive environment, governmental policies and initiatives towards electric two-wheeled vehicles, as well as the general factors affecting the electric two-wheeled vehicles industry in overseas markets.
Key Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving China’s electric two-wheeled vehicles industry, including, among others, China’s overall economic growth, the increase in per capita disposable income, the expansion of urbanization, the growth in consumer spending and consumption upgrades, the competitive environment, and governmental policies and initiatives towards electric two-wheeled vehicles, as well as the general factors affecting the electric two-wheeled vehicles industry in international markets.
We believe that our expansion into selected international markets will not only drive our revenue growth but also enhance our brand awareness. 94 Table of Contents Key Components of Results of Operations Revenues We generate revenues from sales of e-scooters, sales of accessories and spare parts, and provision of mobile app and other services.
We believe that our expansion into selected international markets will not only drive our revenue growth but also enhance our brand awareness. 92 Table of Contents Key Components of Results of Operations Revenues We generate revenues from sales of e-scooters, sales of accessories and spare parts, and provision of mobile app and other services.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. We did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2022.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. We did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
We believe that our well-recognized NIU brand, together with our innovative design and continual expansion of product offerings, position us favorably to capture the enormous growth potential in the global market, and we will enter into selected overseas markets that offer identified growth opportunities and favorable government policies.
We believe that our well-recognized NIU brand, together with our innovative design and continual expansion of product offerings, position us favorably to capture the enormous growth potential in the global market, and we will enter into selected international markets that offer identified growth opportunities and favorable government policies.
The revenues from accessory and spare parts sales decreased from RMB397.1 million in 2021 to RMB242.3 million (US$35.1 million) in 2022, mainly due to the battery pack sales reduction from overseas shared mobility operators, and the decrease in the sales volume of e-scooters in China, with which purchases of accessories and spare parts usually correlate.
The revenues from accessory and spare parts sales decreased from RMB397.1 million in 2021 to RMB242.3 million in 2022, mainly due to the battery pack sales reduction from overseas shared mobility operators, and the decrease in the sales volume of e-scooters in China, with which purchases of accessories and spare parts usually correlate.
E-scooter sales. We generate a majority of our revenues from sales of e-scooters to our distributors offline or directly to individual consumers online. We have adopted an omnichannel retail model, integrating the offline and online channels, to sell our e-scooters. In China, we have a unique “city partner” system, and sell e-scooters to the city partners.
E-scooter sales. We generate a large majority of our revenues from sales of e-scooters to our distributors offline or directly to individual consumers online. We have adopted an omnichannel retail model, integrating the offline and online channels, to sell our e-scooters. In China, we have a “city partner” system, and sell e-scooters to the city partners.
The decrease in the sales volume of e-scooters was driven by the increase in raw materials and the impact of the COVID-19, which resulted in a decrease in sales in the domestic market. The revenues per e-scooter increased from RMB3,569.2 in 2021 to RMB3,810.3 (US$552.4) in 2022, mainly due to better premium product mix and price increase.
The decrease in the sales volume of e-scooters was driven by the increase in raw materials and the impact of the COVID-19, which resulted in a decrease in sales in the domestic market. The revenues per e-scooter increased from RMB3,569.2 in 2021 to RMB3,810.3 in 2022, mainly due to better premium product mix and price increase.
Risk Factors—Risks Related to Doing Business in China—We may not be able to obtain certain benefits under relevant tax treaty on dividends paid by our mainland China subsidiaries to us through our Hong Kong subsidiary.” 97 Table of Contents The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in mainland China be treated as a resident enterprise for mainland China tax purposes and consequently be subject to the mainland China income tax at the rate of 25% for its global income.
Risk Factors—Risks Related to Doing Business in China—We may not be able to obtain certain benefits under the tax treaty on dividends paid by our mainland China subsidiaries to us through our Hong Kong subsidiary.” The Enterprise Income Tax Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in mainland China be treated as a resident enterprise for mainland China tax purposes and consequently be subject to the mainland China income tax at the rate of 25% for its global income.
The decrease was primarily attributable to a decrease in cost of products from RMB2,826.6 million in 2021 to RMB2,376.8 million (US$344.6 million) in 2022, which was primarily due to a decrease in e-scooter sales volume.
The decrease was primarily attributable to a decrease in cost of products from RMB2,826.6 million in 2021 to RMB2,376.8 million in 2022, which was primarily due to a decrease in e-scooter sales volume.
Organizational Structure” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” 103 Table of Contents A substantial majority of our revenues have been, and we expect they are likely to continue to be, in the form of Renminbi.
Organizational Structure” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” A substantial majority of our revenues have been, and we expect they are likely to continue to be, in the form of Renminbi.
The revenues from e-scooter sales decreased by 12.3% from RMB3,253.0 million in 2021 to RMB2,853.9 million (US$413.8 million) in 2022, which was mainly due to a decrease in the sales volume of e-scooters by 19.9% from 1,037,914 in 2021 to 831,593 in 2022.
The revenues from e-scooter sales decreased by 12.3% from RMB3,253.0 million in 2021 to RMB2,853.9 million in 2022, which was mainly due to a decrease in the sales volume of e-scooters by 19.9% from 1,037,914 in 2021 to 831,593 in 2022.
Mainland China Our mainland China subsidiaries, the VIE, and VIE’s subsidiaries are subject to the PRC Enterprise Income Tax Law, or the EIT Law, and are generally subject to a statutory income tax rate of 25%.
Mainland China Our mainland China subsidiaries, the VIE, and VIE’s subsidiaries are subject to the PRC Enterprise Income Tax Law and are generally subject to a statutory income tax rate of 25%.
Our WFOE has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meets the requirements for statutory reserve funds. C. Research and Development See “Item 4. Information On the Company—B. Business Overview— NIU Innovation Lab” and “—Intellectual Property.” D.
Our WFOE has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meets the requirements for statutory reserve funds. C. Research and Development See “Item 4. Information On the Company—B. Business Overview— NIU Innovation Lab” and “—Intellectual Property.” 102 Table of Contents D.
Financing activities Net cash used in financing activities in 2022 was RMB17.8 million (US$2.6 million), consisting primarily of repayments for short-term bank borrowings, partially offset by the proceeds from short-term bank borrowings and exercise of employee stock option.
Net cash used in financing activities in 2022 was RMB17.8 million, consisting primarily of repayments for short-term bank borrowings, partially offset by the proceeds from short-term bank borrowings and exercise of employee stock option.
Cost of revenues Cost of products sold represents a majority of our cost of revenues, and the other components of cost of revenues include write-downs of inventory, logistics costs and warranty costs. Cost of products sold mainly consists of the cost for purchasing raw materials and components, the labor cost and other costs for manufacturing e-scooters.
Cost of revenues Cost of products sold represents a majority of our cost of revenues, and the other components of cost of revenues include logistics costs, write-downs of inventory and warranty costs. 93 Table of Contents Cost of products sold mainly consists of the cost for purchasing raw materials and components, the labor cost and other costs for manufacturing e-scooters.
Net cash provided by financing activities in 2021 was RMB6.2 million (US$1.0 million), consisting primarily of proceeds from short-term bank borrowings and exercise of employee stock option, partially offset by repayments for short-term bank borrowings.
Net cash provided by financing activities in 2021 was RMB6.2 million, consisting primarily of proceeds from short-term bank borrowings and exercise of employee stock option, partially offset by repayments for short-term bank borrowings.
In Europe, the U.S. and Southeast Asia, we will continue to expand our distribution network, launch new products suitable for local markets, partner with global leading companies to co-brand premium smart e-scooter models, and are exploring additional business opportunities to drive the growth beyond retail.
In Europe, the U.S. and Southeast Asia, we will continue to expand our distribution network, launch new products suitable for local markets, partner with global leading companies to co-brand premium smart e-scooter models, and are exploring additional business opportunities to drive the growth beyond retail. We will pursue differentiated strategies for different overseas markets.
The service revenues increased from RMB54.5 million in 2021 to RMB72.4 million (US$10.5 million) in 2022, mainly attributable to the continued growth of our user base. Cost of revenues Our cost of revenues decreased by 13.6% from RMB2,891.8 million in 2021 to RMB2,498.9 million (US$362.3 million) in 2022.
The service revenues increased from RMB54.5 million in 2021 to RMB72.4 million in 2022, mainly attributable to the continued growth of our user base. Cost of revenues Our cost of revenues decreased by 13.6% from RMB2,891.8 million in 2021 to RMB2,498.9 million in 2022.
Excluding advertising and promotion expenses, our selling and marketing expenses as a percentage of our revenues was 7.8% in 2022, as compared to 4.6% in 2021. 99 Table of Contents Research and development expenses Our research and development expenses increased by 30.5% from RMB135.2 million in 2021 to RMB176.5 million (US$25.6 million) in 2022.
Excluding advertising and promotion expenses, our selling and marketing expenses as a percentage of our revenues was 7.8% in 2022, as compared to 4.6% in 2021. Research and development expenses Our research and development expenses increased by 30.5% from RMB135.2 million in 2021 to RMB176.5 million in 2022.
The increase in staff cost and share-based compensation was due to an increase in the number of sales staff and additional share incentive grants. The increase in rental expenses and other selling expenses was due to the growth of kick-scooters sales in overseas market.
The increase in staff cost and share-based compensation was due to an increase in the number of sales staff and additional share incentive grants. The increase in rental expenses and other selling expenses was due to the growth of kick-scooters sales in international markets.
The increase in staff cost and share-based compensation was mainly due to an increase in the number of staff and additional share incentive grants. The increase in provision for credit losses was mainly due to overseas accounts receivable. The decrease in foreign currency exchange gain was mainly because of the appreciation of US dollar.
The increase in staff cost and share-based compensation was mainly due to an increase in the number of staff and additional share incentive grants. The increase in allowance for doubtful accounts was mainly due to overseas accounts receivable. The decrease in foreign currency exchange gain was mainly because of the appreciation of US dollar.
Our general and administrative expenses mainly consist of payroll and related costs for employees engaging in general corporate functions, professional fees, current expected credit losses, foreign currency exchange gains (losses) and other general corporate expenses, as well as expenses associated with the use by these functions of facilities and equipment, such as depreciation and rental expenses.
Our general and administrative expenses mainly consist of allowance for doubtful accounts, payroll and related costs for employees engaging in general corporate functions, professional fees, foreign currency exchange gains (losses) and other general corporate expenses, as well as expenses associated with the use by these functions of facilities and equipment, such as depreciation and rental expenses.
General and administrative expenses Our general and administrative expenses increased by 11.8% from RMB141.8 million in 2021 to RMB158.5 million (US$23.0 million) in 2022.
General and administrative expenses Our general and administrative expenses increased by 11.8% from RMB141.8 million in 2021 to RMB158.5 million in 2022.
After considering all facts available to us as of the date of this annual report, we believe our cash on hand will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next 12 months.
After considering all facts available to us as of the date of this annual report, we believe our cash and cash equivalents, restricted cash and term deposits will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next 12 months.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2024 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
The increase was primarily due to an increase of RMB14.7 million in staff cost, an increase of RMB3.2 million in share-based compensation, an increase of RMB23.8 million in provision for credit losses and a decrease of RMB24.6 million in foreign currency exchange gain.
The increase was primarily due to an increase of RMB14.7 million in staff cost, an increase of RMB3.2 million in share-based compensation, an increase of RMB23.8 million in allowance for doubtful accounts and a decrease of RMB24.6 million in foreign currency exchange gain.
Those grants were for the purpose of giving immediate financial support from local government authorities with no future related costs or obligations. Net loss As a result of the foregoing, we generated a net loss of RMB49.5 million (US$7.2 million) in 2022, compared to a net income of RMB225.8 million in 2021.
These government grants mainly consisted of incentives from local government authorities and were for the purpose of giving immediate financial support from local government authorities with no future related costs or obligations. Net loss As a result of the foregoing, we generated a net loss of RMB49.5 million in 2022, compared to a net income of RMB225.8 million in 2021.
Holding Company Structure Our company, Niu Technologies, is a holding company with no material operations of its own. We conduct our operations primarily through our WFOE and the VIE.
Holding Company Structure Our company, Niu Technologies, is a holding company with no material operations of its own. We conduct operations in mainland China primarily through our subsidiaries and the VIE in mainland China .
We will further expand our new e-scooter product portfolio and sales network and retail channels, and engage in more selling and marketing activities to enhance our brand awareness and attract more purchases from new and existing customers in different geographic markets. 96 Table of Contents Research and development expenses.
We plan to continue to expand our new e-scooter product portfolio and sales network and retail channels, and engage in more selling and marketing activities to enhance our brand awareness and attract more purchases from new and existing customers in different geographic markets. Research and development expenses.
Our research and development expenses mainly consist of payroll and related costs for employees involved in researching and developing new products and technologies, expenses associated with the use by these functions of our facilities and equipment, such as depreciation and rental expenses, and expenses for outsourced engineering.
Our research and development expenses mainly consist of payroll and related costs for employees involved in researching and developing new products and technologies, design and development expenses, primarily including validation and testing fees, and expenses associated with the use by these functions of our facilities and equipment, such as depreciation and rental expenses.
The advertising and promotion expenses, consisting primarily of online and offline advertisements, are event-driven, and tend to be higher when we launch new products. Our selling and marketing expenses as a percentage of our revenues was 8.2%, 9.0% and 13.9% in 2020, 2021 and 2022, respectively.
Advertising and promotion expenses, consisting primarily of online and offline advertisements, are event-driven, and tend to be higher when we launch new products. Our selling and marketing expenses as a percentage of our revenues were 9.0%, 13.9% and 18.7% in 2021, 2022 and 2023, respectively.
Capital expenditures represent cash paid for purchase of property, plant and equipment, intangible assets and land use right. We will continue to make such capital expenditures to support the expected growth of our business. We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives.
Our capital expenditures for 2021, 2022 and 2023 represented cash paid for purchase of property, plant and equipment. We will continue to make such capital expenditures to support the expected growth of our business. We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives.
According to the Double Taxation Avoidance and the Tax Evasion Arrangement, dividends paid by an FIE in mainland China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5%, if the immediate holding company owns at least 25% of the equity interest of the FIE and satisfies all other requirements under the tax arrangement and receives approval from the relevant tax authority.
According to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, dividends paid by a foreign investment enterprise in mainland China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5%, if the immediate holding company owns at least 25% of the equity interest of the foreign investment enterprise and satisfies all other requirements under the tax arrangement and receives approval from the tax authority.
We have a diversified product portfolio that caters to the various demands of our users and addresses different urban travel scenarios. Currently, we offer eight product series across a number of different vehicle types.
We have a diversified product portfolio that caters to the various demands of our users and addresses different urban travel scenarios. Currently, we offer two model lineups, comprising a number of different vehicle types.
Material Cash requirements ​ Our material cash requirements as of December 31, 2022 and any subsequent interim period primarily include our capital expenditures, operating lease obligations and purchase obligations. We made capital expenditures of RMB151.6 million, RMB285.7 million and RMB135.3 million (US$19.6 million) in 2020, 2021 and 2022, respectively.
Material cash requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures, operating lease obligations and purchase obligations. We made capital expenditures of RMB285.7 million, RMB135.3 million and RMB78.9 million (US$11.1 million) in 2021, 2022 and 2023, respectively.
The following table shows our gross profit and gross margin for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ ​ (in thousands, except for percentage data) ​ ​ RMB RMB RMB US$ ​ Gross profit ​ 559,149 ​ 812,779 ​ 669,681 ​ 97,095 ​ Gross margin ​ 22.9 % 21.9 % 21.1 % 21.1 % ​ Operating expenses Our operating expenses consist of selling and marketing expenses, research and development expenses, and general and administrative expenses.
The following table shows our gross profit and gross margin for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ ​ (in thousands, except for percentage data) ​ ​ RMB RMB RMB US$ ​ Gross profit ​ 812,779 ​ 669,681 ​ 570,747 ​ 80,388 ​ Gross margin ​ 21.9% ​ 21.1% ​ 21.5% ​ 21.5% ​ ​ Operating expenses Our operating expenses consist of selling and marketing expenses, research and development expenses, and general and administrative expenses.
Our general and administrative expenses as a percentage of our revenues increased from 3.8% in 2021 to 5.0% in 2022. Government grants Our government grants decreased from RMB48.7 million in 2021 to RMB16.4 million (US$2.4 million) in 2022, mainly consisting of various incentives from local government authorities.
Our general and administrative expenses as a percentage of our revenues increased from 3.8% in 2021 to 5.0% in 2022. Government grants Our government grants decreased from RMB48.7 million in 2021 to RMB16.4 million in 2022.
The increase in inventories and prepayments and other current assets was primarily due to the growth of our business and operation. Net cash provided by operating activities in 2021 was RMB334.2 million (US$52.4 million).
The increase in inventories and prepayments and other current assets was primarily due to the growth of our business and operation. Net cash provided by operating activities in 2021 was RMB334.2 million, as compared to net income of RMB225.8 million.
The following table sets forth the break-down of our revenues, in amounts and as percentages of revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except percentage data) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E-scooter sales 2,143,292 87.7 3,252,989 87.8 2,853,895 413,776 90.1 Accessories and spare parts sales 258,929 10.6 397,088 10.7 242,297 35,130 7.6 Service revenues 42,108 1.7 54,460 1.5 72,405 10,498 2.3 Total 2,444,329 100.0 3,704,537 100.0 3,168,597 459,404 100.0 ​ We recognize revenues upon the satisfaction of our performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes), sales volume rebates provided to qualified distributors based on the volume sold to such distributors in a certain period and sales return estimated based on historical experiences.
The following table sets forth the break-down of our revenues, in amounts and as percentages of revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except percentage data) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E-scooter sales 3,252,989 87.8 2,853,895 90.1 2,358,659 332,210 88.9 Accessories and spare parts sales 397,088 10.7 242,297 7.6 197,634 27,836 7.5 Service revenues 54,460 1.5 72,405 2.3 95,465 13,446 3.6 Total 3,704,537 100.0 3,168,597 100.0 2,651,758 373,492 100.0 ​ We recognize revenues upon the satisfaction of our performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes), sales volume rebates provided to qualified distributors based on the volume sold to such distributors in a certain period and sales return estimated based on historical experiences.
Liquidity and Capital Resources Cash flows and working capital We had net cash provided by operating activities of RMB465.6 million, RMB334.2 million and net cash used in operating activities of RMB121.9 million (US$17.7 million) in 2020, 2021 and 2022, respectively. Our primary sources of liquidity have been cash provided by operating activities and financing activities.
Liquidity and Capital Resources Cash flows and working capital We had net cash provided by operating activities of RMB334.2 million and RMB93.7 million (US$13.2 million) in 2021 and 2023, respectively, and net cash used in operating activities of RMB121.9 million in 2022. 99 Table of Contents Our primary sources of liquidity have been cash provided by operating activities and financing activities.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Our accounts receivable represent primarily accounts receivable from the distributors that purchased our e-scooters and accessories and spare parts.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
Net cash used in investing activities in 2021 was RMB295.1 million (US$46.3 million), consisting primarily of cash paid for purchases of term deposits, short-term investments, and property, plant and equipment, partially offset by cash received from sale of short-term investments and withdrawal from term deposits.
Investing activities Net cash provided by investing activities in 2023 was RMB216.3 million (US$30.5 million), consisting primarily of cash received from sale of short-term investments and withdrawal from term deposits, partially offset by cash paid for purchases of term deposits, short-term investments, and property, plant and equipment.
The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, increased from RMB2,786.1 in 2021 to RMB3005.0 (US$435.7) in 2022, which was primarily due to higher raw material costs and product mix change.
The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, increased from RMB2,786.1 in 2021 to RMB3005.0 in 2022, which was primarily due to higher raw material costs and product mix change. 98 Table of Contents Gross profit We generated a gross profit of RMB669.7 million in 2022, as compared to a gross profit of RMB812.8 million in 2021.
As of December 31, 2022, the outstanding balance of this loan was nil. Although we consolidate the results of the VIE, we only have access to the assets or earnings of the VIE through our contractual arrangements with the VIE and its shareholders. See “Item 4. Information on the Company—C.
Although we consolidate the results of the VIE, we only have access to the assets or earnings of the VIE through our contractual arrangements with the VIE and its shareholders. See “Item 4. Information on the Company—C.
Our gross margin slightly decreased from 21.9% in 2021 to 21.1% in 2022, which was mainly due to higher raw material cost and change in product mix as a result of the launch of various new products.
Our gross margin slightly decreased from 21.9% in 2021 to 21.1% in 2022, which was mainly due to higher raw material cost and change in product mix as a result of the launch of various new products. Selling and marketing expenses Our selling and marketing expenses increased by 32.7% from RMB332.0 million in 2021 to RMB440.4 million in 2022.
Risk Factors—Risks Relating to Our Business—Our financial and operating performance may be adversely affected by epidemics or other public health crises.” While our business is influenced by these general factors, our results of operations are more directly affected by company specific factors, including the following major factors: ● our ability to increase e-scooter sales volume; ● our ability to develop and sell more accessories and spare parts and services; ● our ability to manage our supply chain and manufacturing; ● our ability to enhance our operational efficiency; and ● our ability to expand into international markets. 92 Table of Contents Our ability to increase e-scooter sales volume Our results of operations depend significantly on our ability to increase sales volume of our e-scooter.
While our business is influenced by these general factors, our results of operations are more directly affected by company specific factors, including the following major factors: ● our ability to increase e-scooter sales volume; ● our ability to develop and sell more accessories and spare parts and services; ● our ability to manage our supply chain and manufacturing; ● our ability to enhance our operational efficiency; and ● our ability to expand into international markets.
As of December 31, 2022, we had RMB720.6 million (US$104.5 million) in cash, cash equivalents and restricted cash, of which approximately 39.6% were held in Renminbi and the remainder was mainly held in U.S. dollars.
As of December 31, 2023, we had RMB980.2 million (US$138.1 million) in cash, cash equivalents and restricted cash, of which approximately 34.2% were held in Renminbi and the remainder was mainly held in U.S. dollars.
The respective impact from the change in sales volume of e-scooters and revenues per e-scooter on our revenues in 2021, as compared to 2020, was RMB1,772.4 million (calculated by assuming the revenues per e-scooter in 2021 was the same as that in 2020) and RMB296.9 million (calculated by assuming the sales volume of e-scooters in 2021 was the same as that in 2020).
The respective impact from the change in sales volume of e-scooters and revenues per e-scooter on our revenues in 2023, as compared to 2022, was RMB464.0 million (calculated by assuming the revenues per e-scooter in 2023 was the same as that in 2022) and RMB61.8 million (calculated by assuming the sales volume of e-scooters in 2023 was the same as that in 2022).
The decrease in inventories is primarily due to higher efficiency and faster fulfillment. 104 Table of Contents Investing activities Net cash provided by investing activities in 2022 was RMB397.9 million (US$57.7 million), consisting primarily of cash received from sale of short-term investments and withdrawal from term deposits, partially offset by cash paid for purchases of term deposits, short-term investments, and property, plant and equipment.
Net cash provided by investing activities in 2022 was RMB397.9 million, consisting primarily of cash received from sale of short-term investments and withdrawal from term deposits, partially offset by cash paid for purchases of term deposits, short-term investments, and property, plant and equipment.
This amount was primarily attributable to net loss of RMB49.5 million (US$7.2 million), adjusted for certain non-cash expenses, principally depreciation and amortization expenses of RMB142.7 million (US$20.7 million) and share-based compensation expenses of RMB58.2 million (US$8.4 million), and changes in certain working capital accounts that affected operating cash flow, primarily (i) a RMB156.1 million (US$22.6 million) increase in inventories and (ii) a RMB125.9 million (US$18.3 million) increase in prepayments and other current assets.
Adjustments for non-cash expenses consisted principally of depreciation and amortization expenses of RMB142.7 million and share-based compensation expenses of RMB58.2 million. Changes in working capital accounts that affected operating cash flow consisted primarily of (i) a RMB156.1 million increase in inventories and (ii) a RMB125.9 million increase in prepayments and other current assets.
As a result, Niu Technologies’ ability to pay dividends depends upon dividends paid by our WFOE. 105 Table of Contents If our WFOE or any newly formed mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
If any of our existing or newly formed mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to Niu Technologies.
The following table sets forth the break-down of our total operating expenses, in amounts and as percentages of total operating expenses for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except for percentage data) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses 200,761 48.9 332,008 54.5 440,409 63,853 56.8 Research and development expenses 105,335 25.6 135,218 22.2 176,478 25,587 22.8 General and administrative expenses 104,860 25.5 141,799 23.3 158,461 22,975 20.4 Total 410,956 100.0 609,025 100.0 775,348 112,415 100.0 ​ Selling and marketing expenses.
The following table sets forth the break-down of our total operating expenses, in amounts and as percentages of total operating expenses for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except for percentage data) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses 332,008 54.5 440,409 56.8 495,735 69,823 55.6 Research and development expenses 135,218 22.2 176,478 22.8 150,986 21,266 16.9 General and administrative expenses 141,799 23.3 158,461 20.4 244,518 34,439 27.5 Total 609,025 100.0 775,348 100.0 891,239 125,528 100.0 ​ Selling and marketing expenses.
As of December 31, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions. Recent Accounting Pronouncements We discuss recently adopted and issued accounting standards in Note 2, “Summary of Significant Accounting Policies—Recent Accounting Pronouncements” of the notes to our consolidated financial statements included elsewhere in this annual report. ​
Recent Accounting Pronouncements We discuss recently adopted and issued accounting standards in Note 2, “Summary of Significant Accounting Policies—Recent Accounting Pronouncements” to our consolidated financial statements included elsewhere in this annual report.
Our ability to control cost of products sold also depends on our successful adoption of automatic and intelligent manufacturing equipment and procedures, and effective utilization of our platform-based engineering system, through which designs of new models may be easily adaptable to our existing production lines.
Our gross margin remained stable at 21.9%, 21.1% and 21.5% in 2021, 2022 and 2023, respectively, despite some temporary setbacks due to general economic conditions, our ability to control cost of products sold also depends on our successful adoption of automatic and intelligent manufacturing equipment and procedures, and effective utilization of our platform-based engineering system, through which designs of new models may be easily adaptable to our existing production lines.
Gross profit We generated a gross profit of RMB669.7 million (US$97.1 million) in 2022, as compared to a gross profit of RMB812.8 million in 2021.
Gross profit We generated a gross profit of RMB570.7 million (US$80.4 million) in 2023, as compared to a gross profit of RMB669.7 million in 2022.
You should read the following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report.
For a detailed discussion of our significant accounting policies and related judgments, please see Note 2, “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements included elsewhere in this annual report. You should read the following descriptions of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.
Our selling and marketing expenses primarily consist of advertising and promotion expenses, payroll and related expenses for personnel engaged in selling and marketing activities. The advertising and promotion expenses, consisting primarily of online and offline advertisements. Our advertising and promotions spending is event-driven, we tend to incur more advertising and promotion expenses when we launch new products.
Our selling and marketing expenses primarily consist of advertising and promotion expenses, payroll and related expenses for personnel engaged in selling and marketing activities. The advertising and promotion expenses, consisting primarily of online and offline advertisements.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 Revenues Our revenues increased by 51.6% from RMB2,444.3 million in 2020 to RMB3,704.5 million (US$581.3 million) in 2021, which was primarily due to an increase in e-scooter sales volume.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 14.5% from RMB3,704.5 million in 2021 to RMB3,168.6 million in 2022, which was primarily due to a decrease in e-scooter sales volume.
Operating Results Overview We currently design, manufacture and sell high-performance motorcycles, scooters, kick-scooters and e-bikes. We have a diversified product portfolio that caters to the various demands of our users and addresses different urban travel scenarios. Currently, we offer eight product series across a number of different vehicle types.
Operating Results Overview We currently design, manufacture and sell high-performance electric motorcycles, mopeds, bicycles, as well as kick-scooters and e-bikes. We have a diversified product portfolio that caters to the various demands of our users and addresses different urban travel scenarios. We have adopted an omnichannel retail model, integrating offline and online channels, to sell our products and provide services.
We also offer the NIU app as an integral part of the user experience. Capitalizing on our premium brand, we have also been able to sell lifestyle accessories, which are well received by customers. ​ We currently generate a majority of our revenues from sales of e-scooters to our distributors offline or to individual consumers online.
We also offer the NIU app as an integral part of the user experience. We currently generate a majority of our revenues from sales of e-scooters to our distributors offline or to individual consumers online. We also generate revenues by selling accessories and spare parts and providing mobile app and other services .
The increase in accounts payable and notes payable, accounts receivable and inventories was primarily due to the growth of our business and operation. Net cash provided by operating activities in 2020 was RMB465.6 million (US$71.4 million).
The increase in accounts payable and notes payable, accounts receivable and inventories was primarily due to the growth of our business and operation.
Moreover, our ability to increase the sales volume also depends on our ability to continually enhance our brand to attract users and purchases, as well as our ability to successfully execute our omnichannel retail model and expand our sales network both domestically and globally.
Moreover, our ability to increase the sales volume also depends on our ability to continually enhance our brand to attract users and purchases, as well as our ability to successfully execute our omnichannel retail model and expand our sales network both domestically and globally. 91 Table of Contents Our ability to develop and sell more accessories and spare parts and services Our results of operations are affected by our ability to develop and sell more accessories and spare parts, which generally have higher gross margins.
Under the PRC Corporate Income Tax Law, preferential tax treatments will be granted to entities which conduct businesses in certain encouraged sectors and to entities otherwise classified as “High and New Technology Enterprises” (“HNTE”). Jiangsu Xiaoniu qualified as a HNTE and enjoyed a preferential income tax rate of 15% for the fiscal year ended December 31, 2021 and 2022.
Under the PRC Corporate Income Tax Law, preferential tax treatments will be granted to entities which conduct businesses in certain encouraged sectors and to entities otherwise classified as High and New Technology Enterprises (HNTE).
This not only provides us with additional revenue streams but also improves our gross margin. 93 Table of Contents Our ability to manage our supply chain and manufacturing Material and manufacturing costs of our e-scooters have historically accounted for a majority of our cost of revenues.
Our ability to manage our supply chain and manufacturing Material and manufacturing costs of our e-scooters have historically accounted for a majority of our cost of revenues.
Outbound shipping charges to overseas offline distributors and individual customers are included as a part of the revenues, and outbound shipping-related costs are recorded as cost of revenues. 107 Table of Contents Income taxes Our current income taxes are provided on the basis of net income (loss) for financial reporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.
Income taxes Our current income taxes are provided on the basis of net income (loss) for financial reporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Our deferred income taxes are provided using the asset and liability method.
In addition, payments of dividends from Niu Technologies Group Limited to our company are not subject to any withholding tax in Hong Kong. No provision for Hong Kong profits tax was made as we had no estimated assessable profit that was subject to Hong Kong profits tax during 2020, 2021 or 2022.
No provision for Hong Kong profits tax was made as we had no estimated assessable profit that was subject to Hong Kong profits tax during 2021, 2022 or 2023.
We purchase raw materials and main components, such as batteries, motors, tires, battery chargers and controllers, from suppliers and assemble e-scooters in our own production facility. We expect that our cost of revenues will increase in the foreseeable future as we increase our e-scooter and other products sales volume and further expand our business.
We purchase raw materials and main components, such as batteries, motors, tires, battery chargers and controllers, from suppliers and assemble e-scooters in our own production facility. Gross margin Our gross margin is mainly affected by the retail price, product mix change, sales volume rebate and the cost of revenue per e-scooter.
Unfavorable changes in any of these general industry conditions could negatively affect demand for our products and materially and adversely affect our results of operations. Our results of operations and financial condition have been affected by the spread of COVID-19 since the first quarter of 2020.
Unfavorable changes in any of these general industry conditions could negatively affect demand for our products and materially and adversely affect our results of operations. 90 Table of Contents Our results of operations and financial condition in 2023 was affected by the lingering effects of lithium battery price hikes started in 2022.
The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, decreased from RMB3,133.3 in 2020 to RMB2,786.1 (US$437.2) in 2021, which was primarily due to a change in product mix.
The cost per e-scooter, defined as cost of revenues divided by the number of e-scooters sold in a specified period, decreased from RMB3,005.0 in 2022 to RMB2,931.8 (US$412.9) in 2023, which was primarily due to lower freight cost for overseas sales.
Although we still face uncertainties and pressures, we are confident that our domestic sales will return to the growth track in 2023 with the launches of our new products.
Despite the headwinds, we have been committed to the strategy of focusing on premium and mass-premium products in 2023, by expanding our product line and growing our classic series. Although we still face uncertainties and pressures, we expect that our domestic sales will return to the growth track in 2024 with the launches of our new products.
We will continue to expand and leverage our sales network to enhance our brand and improve sales efficiency. In addition, as our business grows, we expect to achieve greater operating leverage, increase the productivity of our personnel, and obtain more favorable terms from our suppliers.
In addition, as our business grows, we expect to achieve greater operating leverage, increase the productivity of our personnel, and obtain more favorable terms from our suppliers. Our ability to expand to international markets As of December 31, 2023, we sold our smart e-scooters through 56 distributors in 54 countries overseas.
Net cash used in investing activities in 2020 was RMB535.2 million (US$82.0 million), consisting primarily of cash paid for purchases of term deposits, short-term investments, land use right, and property, plant and equipment, partially offset by cash received from sale of short-term investments and withdrawal from term deposits.
Net cash used in investing activities in 2021 was RMB295.1 million, consisting primarily of cash paid for purchases of term deposits, short-term investments, and property, plant and equipment, partially offset by cash received from sale of short-term investments and withdrawal from term deposits. 101 Table of Contents Financing activities Net cash used in financing activities in 2023 was RMB59.3 million (US$8.4 million), consisting primarily of repayments for short-term bank borrowings, partially offset by the proceeds from short-term bank borrowings and exercise of employee stock option.

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Biggest changeThe following table summarizes, as of December 31, 2022, the restricted share units granted and outstanding under the Amended and Restated 2016 Plan and the Amended and Restated 2018 Plan to our directors and executive officers and our other employees, excluding restricted share units that were forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ Restricted Share ​ ​ ​ Date of Name ​ Units ​ Date of Grant ​ Expiration Changqing Ye ​ * ​ October 19, 2022 ​ October 18, 2032 Mei-Wei Cheng * October 19, 2022 October 18, 2032 Julian Juul Wolhardt ​ * ​ October 19, 2022 ​ October 18, 2032 John Jinshu Zhang * October 19, 2022 October 18, 2032 Fion Wenjuan Zhou ​ * ​ March 15, 2022 ​ March 14, 2032 Yan Li * August 1, 2019 July 31, 2029 Token Yilin Hu * August 1, 2019 July 31, 2029 Other employees 3,290,158 February 1, 2019~October 1, 2022 January 31, 2029 ~ September 30, 2032 * Less than 1% of our total ordinary shares outstanding as of December 31, 2022. 111 Table of Contents C.
Biggest changeThe following table summarizes, as of December 31, 2023, the restricted share units granted and outstanding under the Amended and Restated 2016 Plan and the 2018 Plan to our directors and executive officers and our other employees, excluding restricted share units that were forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ Restricted Share ​ ​ ​ Date of Name ​ Units ​ Date of Grant ​ Expiration Fion Wenjuan Zhou ​ * ​ March 15, 2022 ​ March 14, 2032 Changqing Ye ​ * ​ October 19, 2022 ​ October 18, 2032 Mei-Wei Cheng * October 19, 2022 October 18, 2032 Julian Juul Wolhardt ​ * ​ October 19, 2022 ​ October 18, 2032 John Jinshu Zhang * October 19, 2022 October 18, 2032 Other employees 1,669,074 February 1, 2019 ~ October 1, 2023 January 31, 2029 ~ September 30, 2033 * Less than 1% of our total ordinary shares outstanding as of December 31, 2023.
Mei-Wei Cheng has served as our director since October 2018. Mr. Cheng currently serves as a director of LEAR Corporation, and serves as non-executive chairman of the board of directors of HCP Packaging and INTERPLEX Holdings, both portfolio companies of Baring Private Equity Asia. Mr.
Mei-Wei Cheng has served as our director since October 2018. Mr. Cheng serves as a director of LEAR Corporation, and served as non-executive chairman of the board of directors of HCP Packaging and INTERPLEX Holdings, both portfolio companies of Baring Private Equity Asia. Mr.
(4) Represents 9,927,020 Class B ordinary shares held by Niu Holding Inc., a BVI business company, which is 82.7% owned by LUCK GENIE HOLDINGS LIMITED, a BVI business company, and 17.3% owned by WEALTH ERUPT HOLDINGS LIMITED, a BVI business company. LUCK GENIE HOLDINGS LIMITED is wholly owned by Legend Champ Investment Limited, a BVI business company.
Represents 9,927,020 Class B ordinary shares held by Niu Holding Inc., a BVI business company, which is 82.7% owned by LUCK GENIE HOLDINGS LIMITED, a BVI business company, and 17.3% owned by WEALTH ERUPT HOLDINGS LIMITED, a BVI business company. LUCK GENIE HOLDINGS LIMITED is wholly owned by Legend Champ Investment Limited, a BVI business company.
Legend Champ Investment Limited is wholly owned by Token Who Cares Trust. The settlor and beneficiary of Token Who Cares Trust is Mr. Token Yilin Hu, our director and vice president. WEALTH ERUPT HOLDINGS LIMITED is beneficially owned by Mr. Carl Chuankai Liu.
Legend Champ Investment Limited is wholly owned by Token Who Cares Trust. The settlor and beneficiary of Token Who Cares Trust is Mr. Token Yilin Hu, our former director and vice president. WEALTH ERUPT HOLDINGS LIMITED is beneficially owned by Mr. Carl Chuankai Liu.
Each holder of our Class A ordinary shares is entitled to one vote per share. Each holder of our Class B ordinary shares is entitled to four votes per share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis.
Each holder of our Class A ordinary shares is entitled to one vote per share. Each holder of our Class B ordinary shares is entitled to four votes per share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis. (1).
Under the 2018 Share Incentive Plan, or the 2018 Plan, the maximum aggregate number of ordinary shares available for issuance is 6,733,703 ordinary shares, which shall be increased by a number equal to 1.5% of the total number of ordinary shares issued and outstanding on the last day of the immediately preceding fiscal year, each fiscal year during the term of the 2018 Plan commencing with the fiscal year ended December 31, 2019, if determined and approved by the board of directors for the relevant fiscal year.
Under the 2018 Share Incentive Plan, or the 2018 Plan, the maximum aggregate number of ordinary shares available for issuance is initially 6,733,703 ordinary shares, which shall be increased by a number equal to 1.5% of the total number of our issued and outstanding ordinary shares on the last day of each of the immediately preceding fiscal year during the term of the 2018 Plan commencing with the fiscal year ended December 31, 2019, if determined and approved by the board of directors for the relevant fiscal year.
The nominating and corporate governance committee will be responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee will be responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; 107 Table of Contents ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
Board Practices Board of Directors Our board of directors consists of six directors. A director is not required to hold any shares in our company by way of qualification.
C. Board Practices Board of Directors Our board of directors consists of six directors. A director is not required to hold any shares in our company by way of qualification.
Wolhardt was an analyst at Lazard Freres & Co from 1996 to 1997 and worked at Coopers & Lybrand from 1995 to 1996. Mr. Wolhardt received his bachelor’s degree in accounting from the University of Illinois (Urbana-Champaign) in 1995. Mr. Wolhardt is a certified public accountant and certified management accountant in the U.S. 109 Table of Contents Mr.
Wolhardt was an analyst at Lazard Freres & Co from 1996 to 1997 and worked at Coopers & Lybrand from 1995 to 1996. Mr. Wolhardt received his bachelor’s degree in accounting from the University of Illinois (Urbana-Champaign) in 1995. Mr. Wolhardt is a certified public accountant and certified management accountant in the U.S. 104 Table of Contents Mr.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; 112 Table of Contents ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
Zhang received his bachelor’s degree in literature from Peking University in 1982, master’s degree in Asian studies from University of Hawaii at Manoa in 1989, master’s degree in intellectual history from University of California, Los Angeles in 1990 and Juris doctor degree from University of California, Berkeley in 1993. Ms.
Zhang received his bachelor’s degree in literature from Peking University in 1982, master’s degree in Asian studies from University of Hawaii at Manoa in 1989, master’s degree in intellectual history from University of California, Los Angeles in 1990 and Juris doctor degree from University of California, Berkeley in 1993. B.
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant. Transfer Restrictions.
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant. 105 Table of Contents Transfer Restrictions.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2023 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares on an as-converted basis.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 29, 2024 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares on an as-converted basis.
The committee or the board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each grant. 110 Table of Contents Award Agreement.
The committee or the board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each grant. Award Agreement.
Fion Wenjuan Zhou has served as our chief financial officer since November 2021. She is responsible for overseeing investor relations, strategic investment, finance, legal, internal controls and ESG compliance of our company. Prior to joining us, Ms. Zhou served as the chief financial officer of Sogou Inc. (NYSE: SOGO) from July 2020 to October 2021. Between 2015 and 2019, Ms.
She is responsible for overseeing investor relations, strategic investment, finance, legal, internal controls and ESG compliance of our company. Prior to joining us, Ms. Zhou served as the chief financial officer of Sogou Inc. (NYSE: SOGO) from July 2020 to October 2021. Between 2015 and 2019, Ms.
The following table summarizes, as of December 31, 2022, the options granted and outstanding under the Amended and Restated 2016 Plan and Amended and Restated 2018 Plan to our directors and executive officers and our other employees, excluding options that were forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Exercise ​ ​ ​ ​ Underlying ​ Price ​ ​ ​ Date of Name ​ Options ​ (US$/Share) ​ Date of Grant ​ Expiration Yan Li * 3.425 August 1, 2019 July 31, 2029 Token Yilin Hu * 3.425 August 1, 2019 July 31, 2029 Other employees 2,929,808 0.2 and 3.425 February 1, 2018~ August 1, 2019 January 31, 2028~ July 31, 2029 (1) * Less than 1% of our total ordinary shares outstanding as of December 31, 2022.
The following table summarizes, as of December 31, 2023, the options granted and outstanding under the Amended and Restated 2016 Plan and the 2018 Plan to our directors and executive officers and our other employees, excluding options that were forfeited or canceled after the relevant grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Exercise ​ ​ ​ ​ Underlying ​ Price ​ ​ ​ Date of Name ​ Options ​ (US$/Share) ​ Date of Grant ​ Expiration Yan Li * 3.425 August 1, 2019 July 31, 2029 Other employees 3,013,058 0.2 and 3.425 February 1, 2018~ August 1, 2019 January 31, 2028~ July 31, 2029 * Less than 1% of our total ordinary shares outstanding as of December 31, 2023.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 106 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Employees As of December 31, 2022, we had 641 full-time employees. We had a total of 623 employees as of December 31, 2021 and 702 employees as of December 31, 2022.
Employees As of December 31, 2023, we had 550 full-time employees. We had a total of 702 employees as of December 31, 2021 and 641 employees as of December 31, 2022.
Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Changqing Ye, Mr. John Jinshu Zhang and Mr. Mei-Wei Cheng. Mr. Changqing Ye is the chairman of our audit committee. We have determined that Mr. Changqing Ye, Mr. John Jinshu Zhang and Mr.
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Changqing Ye, Mr. John Jinshu Zhang and Mr. Mei-Wei Cheng. Mr. Changqing Ye is the chairman of our audit committee. We have determined that Mr. Changqing Ye, Mr. John Jinshu Zhang and Mr.
Our board of directors has approved annual increases of 2,241,253, 2,285,407, and 2,305,212 ordinary shares for the years ended December 31, 2020, 2021 and 2022, representing 1.5% of total issued and outstanding shares as of December 31, 2019, 2020 and 2021, respectively, pursuant to the 2018 Share Incentive Plan.
Our board of directors has approved annual increases of 2,285,407, 2,305,212, and 2,313,923 ordinary shares for the years ended December 31, 2021, 2022 and 2023, representing 1.5% of total issued and outstanding shares as of December 31, 2020, 2021 and 2022, respectively, pursuant to the 2018 Plan.
(4) — 9,927,020 6.4 ​ 19.5 * Less than 1% of our total ordinary shares outstanding as of February 28, 2023. ​ ** The business address of Messrs. Yan Li, Token Yilin Hu, and Fion Wenjuan Zhou is No.1 Building, No. 195 Huilongguan East Road, Changping District, Beijing 102208, People’s Republic of China. The business address of Mr.
(3) — 9,927,020 6.4 ​ 19.4 * Less than 1% of our total ordinary shares outstanding as of February 29, 2024. ** The business address of Yan Li, and Fion Wenjuan Zhou is No.1 Building, No. 195 Huilongguan East Road, Changping District, Beijing 102208, People’s Republic of China. The business address of Mr.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 113 Table of Contents Terms of Directors and Officers Our directors may be appointed by an ordinary resolution of our shareholders.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
The record holder is Citibank, N.A., the depositary of our ADS program. None of our outstanding Class B ordinary shares were held by record holders in the United States as of February 28 2023.
One of these record holders is Citibank, N.A., the depositary of our ADS program. None of our outstanding Class B ordinary shares were held by record holders in the United States as of February 29, 2024.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ % of Total Function Number Employees Sales and marketing 262 40.9 Research and Development 192 29.9 Supply chain management and general administration 187 29.2 Total number of employees 641 100.0 ​ A substantial majority of the personnel in our manufacturing facility, mainly the personnel working on the assembly and production lines, are outsourced from third parties, and are not our employees.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ % of Total Function Number Employees Sales and marketing 220 40.0 Research and Development 162 29.5 Supply chain management and general administration 168 30.5 Total number of employees 550 100.0 ​ A substantial majority of the personnel in our manufacturing facility, mainly the personnel working on the assembly and production lines, are outsourced from third parties, and are not our employees.
B. Compensation In 2022, we paid an aggregate of approximately RMB4.46 million (US$0.65 million) in cash to our executive officers, and approximately RMB1.03 million (US$0.15 million) in cash to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation In 2023, we paid an aggregate of approximately RMB3.54 million (US$0.50 million) in cash to our executive officers, and approximately RMB1.06 million (US$0.15 million) in cash to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
The Amended and Restated 2016 plan permits the awards of options, restricted share units, restricted shares, share appreciation rights, dividend equivalents and share payments.
The following paragraphs describe the principal terms of the Amended and Restated 2016 Plan and the 2018 Plan: Type of Awards. The Amended and Restated 2016 plan permits the awards of options, restricted share units, restricted shares, share appreciation rights, dividend equivalents and share payments.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ % of % of ​ ​ Class A ​ Class B ​ total ​ aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ voting ​ ​ shares ​ shares ​ shares ​ power *** Directors and Executive Officers**: Yan Li (1) 767,500 6,615,000 4.8 ​ 13.4 Token Yilin Hu (2) — 8,207,020 5.3 ​ 16.1 Changqing Ye — — — — Mei-Wei Cheng * — * * Julian Juul Wolhardt * — * * John Jinshu Zhang * — * * Fion Wenjuan Zhou * — * * All Directors and Executive Officers as a Group 860,300 14,822,020 10.2 ​ 29.5 Principal Shareholders: Glory Achievement Fund Limited (3) 43,181,935 — 28.0 ​ 21.2 Niu Holding Inc.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ % of % of ​ ​ Class A ​ Class B ​ total ​ aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ voting ​ ​ shares ​ shares ​ shares ​ power *** Directors and Executive Officers**: Yan Li (1) 830,000 6,615,000 4.8 ​ 13.3 Fion Wenjuan Zhou * — * * Changqing Ye — — — — Mei-Wei Cheng * — * * Julian Juul Wolhardt * — * * John Jinshu Zhang * — * * All Directors and Executive Officers as a Group 984,600 6,615,000 4.9 ​ 13.4 Principal Shareholders: Glory Achievement Fund Limited (2) 49,321,935 — 31.8 ​ 24.1 Niu Holding Inc.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. ​ 108 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
As of December 31, 2022, options to purchase 1,801,680 ordinary shares and 3,750 restricted share units had been granted and were outstanding, excluding options or restricted share units that were forfeited or canceled after the relevant grant dates.
As of December 31, 2023, options to purchase 1,330,130 ordinary shares and nil restricted share units had been granted and were outstanding under the Amended and Restated 2016 Plan, excluding options or restricted share units that were forfeited or canceled after the relevant grant dates.
Directors and Executive Officers Age Position/Title Yan Li 44 Chairman of the Board of Directors and Chief Executive Officer Token Yilin Hu 38 Director Changqing Ye 52 Independent Director Mei-Wei Cheng 73 Independent Director Julian Juul Wolhardt 49 Independent Director John Jinshu Zhang 63 Independent Director Fion Wenjuan Zhou 39 Chief Financial Officer ​ 108 Table of Contents Dr.
Directors and Executive Officers Age Position/Title Yan Li 45 Chairman of the Board of Directors and Chief Executive Officer Fion Wenjuan Zhou 40 Director and Chief Financial Officer Changqing Ye 53 Independent Director Mei-Wei Cheng 74 Independent Director Julian Juul Wolhardt 50 Independent Director John Jinshu Zhang 64 Independent Director ​ 103 Table of Contents Dr.
As of December 31, 2022, options to purchase 2,612,928 ordinary shares and 3,886,908 restricted share units had been granted and were outstanding, excluding options or restricted share units that were forfeited or canceled after the relevant grant dates. The following paragraphs describe the principal terms of the Amended and Restated 2016 Plan and 2018 Plan: Type of Awards.
As of December 31, 2023, options to purchase 2,612,928 ordinary shares and 2,003,074 restricted share units had been granted and were outstanding under the 2018 Plan, excluding options or restricted share units that were forfeited or canceled after the relevant grant dates.
The calculations in the table below are based on 154,277,834 ordinary shares, consisting of 137,735,814 Class A ordinary shares and 16,542,020 Class B ordinary shares, as of February 28, 2023. 115 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 155,196,912 ordinary shares, consisting of 138,654,892 Class A ordinary shares and 16,542,020 Class B ordinary shares, as of February 29, 2024. ​ 110 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
(1) Represents 6,615,000 Class B ordinary shares held by ELLY Holdings Limited, a BVI business company. ELLY Holdings Limited is wholly owned by Dr. Yan Li. The registered address of ELLY Holdings Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin Islands VG1110.
The registered address of ELLY Holdings Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin Islands VG1110. (2). Represents 49,321,935 Class A ordinary shares held by Glory Achievement Fund Limited, a Cayman Islands company. Glory Achievement Fund Limited is wholly owned by Bull Group Limited, a Cayman Islands company.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 114 Table of Contents Board Diversity Matrix ​ ​ ​ Board Diversity Matrix (As of February 28, 2023) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not ​ ​ ​ ​ ​ ​ Non- ​ Disclose ​ ​ Female ​ Male ​ Binary ​ Gender Part I: Gender Identity ​ ​ ​ ​ Directors ​ 0 ​ 6 ​ N/A ​ N/A Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 ​ D.
Board Diversity Matrix ​ ​ ​ Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not ​ ​ ​ ​ ​ ​ Non- ​ Disclose ​ ​ Female ​ Male ​ Binary ​ Gender Part I: Gender Identity ​ ​ ​ ​ Directors ​ 1 ​ 5 ​ N/A ​ N/A Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 ​ 109 Table of Contents D.
Li received a bachelor’s degree from the University of California at Berkeley in 2001 and a Ph.D. from Stanford University in 2005, both in electronics and electrical engineering. Mr. Token Yilin Hu has served as our director since our inception. Mr. Hu has served as our vice president of research and development from September 2014 to October 2022. Mr.
Li received a bachelor’s degree from the University of California at Berkeley in 2001 and a Ph.D. from Stanford University in 2005, both in electronics and electrical engineering. Ms. Fion Wenjuan Zhou has served as our director since December 2023 and our chief financial officer since November 2021.
Glory Achievement Fund Limited is ultimately and wholly held by a trust, which has Mr. Yi’nan Li as the beneficiary and is administered by an independent trustee and initially by three individual protectors unrelated to Mr. Yi’nan Li. The registered address of Glory Achievement Fund Limited is P.O. Box 2075, George Town, Grand Cayman KY1-1105, Cayman Islands.
Bull Group Limited is wholly owned by BULL TRUST, which has Mr. Yi’nan Li as the beneficiary and is administered by an independent trustee and initially by three individual protectors unrelated to Mr. Li.
The registered address of Niu Holding Inc. is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin Islands VG1110. 116 Table of Contents (3) Represents 43,181,935 Class A ordinary shares held by Glory Achievement Fund Limited, a Cayman Islands company, and its affiliated parties.
The registered address of Niu Holding Inc. is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin Islands VG1110.
We have also entered into indemnification agreements with each of our directors and executive officers.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Removed
Hu has over 15 years of experience in design spanning a variety of products and industries, such as consumer electronics, fashion, autos and smart hardware. Mr. Hu co-founded UTLAB in November 2011, whose use of high-tech materials in the aerospace and auto sectors to create ultimate wearing experience in America and Europe. Prior to UTLAB, Mr.
Added
Mr. Changqing Ye has served as our director since October 2018.
Removed
Hu was with Frog Design, a globally renowned design firm, from March 2009 to October 2011, where he led a team of designers to help multinational clients create innovative products and experiences. Prior to that, Mr. Hu worked at Microsoft China from March 2008 to January 2009. Mr. Changqing Ye has served as our director since October 2018.
Added
Terms of Directors and Officers Our directors may be appointed by an ordinary resolution of our shareholders.
Removed
(2) Represents 8,207,020 Class B ordinary shares out of the 9,927,020 Class B ordinary shares held by Niu Holding Inc., a BVI business company, which is 82.7% owned by LUCK GENIE HOLDINGS LIMITED, a BVI business company, and 17.3% owned by WEALTH ERUPT HOLDINGS LIMITED, a BVI business company.
Added
Under these agreements, each of our executive officers is employed for a specified time period.
Removed
LUCK GENIE HOLDINGS LIMITED is wholly owned by Legend Champ Investment Limited, a BVI business company. Legend Champ Investment Limited is wholly owned by Token Who Cares Trust. The settlor and beneficiary of Token Who Cares Trust is Mr. Token Yilin Hu, our director. WEALTH ERUPT HOLDINGS LIMITED is beneficially owned by Mr. Carl Chuankai Liu.
Added
Represents (i) 210,000 Class A ordinary shares held in the form of ADSs held by Dr. Yan Li in the brokerage account of the administrator of our employee stock option program, (ii) 620,000 Class A Ordinary Shares issuable to Dr.
Removed
According to the arrangement between two shareholders of Niu Holding Inc., Mr. Token Yilin Hu beneficially owned 8,207,020 Class B ordinary shares out of the 9,927,020 Class B ordinary shares held by Niu Holding Inc., and Mr. Carl Chuankai Liu beneficially owned the remaining Class B ordinary shares out of those held by Niu Holding Inc.
Added
Yan Li upon exercise of share options within 60 days of February 29, 2024, and (iii) 6,615,000 Class B ordinary shares held by ELLY Holdings Limited, a BVI business company. ELLY Holdings Limited is wholly owned by Dr. Yan Li.
Removed
The registered address of Niu Holding Inc. is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, British Virgin Islands VG1110. To our knowledge, as of February 28, 2023, a total of 101,545,278 Class A ordinary shares were held by one record holder in the United States, representing approximately 65.8% of our total outstanding shares on an as-converted basis.
Added
Any decision making with respect to the voting or disposal of the shares held by Glory Achievement Fund Limited in the Issuer or other dealings in the Issuer’s securities is subject to approval by the protectors. Mr.
Added
Yi’nan Li will be able to replace the protectors with persons appointed by himself in August 2028 or when the trust beneficially owns, through Glory Achievement Fund Limited or otherwise, no more than 10% of the outstanding shares of the Issuer on an as-converted basis. The registered address of Glory Achievement Fund Limited is P.O.
Added
Box 2075, George Town, Grand Cayman KY1-1105, Cayman Islands. The following information is based on the Schedule 13D filed by Glory Achievement Fund Limited, among others, on December 7, 2023.
Added
The above information is based on the Schedule 13G jointly filed by (i) Glory Achievement Fund Limited, (ii) Bull Group Limited and (iii) BULL TRUST on December 7, 2023, and assumes that Glory Achievement Fund Limited’s shareholding has not change since December 7, 2023. (3).
Added
The above information is based on the Schedule 13G/A jointly filed by (i) Niu Holding Inc., (ii) LUCK GENIE HOLDINGS LIMITED, (iii) Legend Champ Investment Limited, (iv) Token Who Cares Trust and (v) Token Yilin Hu on February 9, 2023, and assumes that Niu Holding Inc.’s shareholding has not changed since December 31, 2022. 111 Table of Contents To our knowledge, as of February 29, 2024, a total of 101,545,280 Class A ordinary shares were held by three record holders in the United States, representing approximately 65.4% of our total outstanding shares on an as-converted basis.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

2 edited+0 added−11 removed0 unchanged
Biggest changeItem 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees— E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with the VIE and Its Shareholders See “Item 4. Information on the Company—C.
Biggest changeItem 7. Major Shareholders and Related Party Transactions A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees— E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with the VIE and Its Shareholders See “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIE.” Employment Agreements and Indemnification Agreements See “Item 6.
Employment Agreements and Indemnification Agreements See “Item 6—Directors, Senior Management and Employees—B. Compensation.” Share Options and Restricted Shares Grants Please refer to “Item 6. Directors, Senior Management and Employees— B. Compensation.” C. Interests of Experts and Counsel Not applicable. ​
Directors, Senior Management and Employees—B. Compensation.” Share Options and Restricted Shares Grants Please refer to “Item 6. Directors, Senior Management and Employees— B. Compensation.” C. Interests of Experts and Counsel Not applicable.
Removed
Organizational Structure—Contractual Arrangements with the VIE.” Shareholders Agreement We entered into our fourth amended and restated shareholders agreement on August 22, 2018 with our shareholders, which consist of holders of ordinary shares and preferred shares.
Removed
The shareholders agreement provides for certain shareholders’ rights, including right of participation, right of first refusal and co-sale rights, and contains provisions governing the board of directors and other corporate governance matters. The special rights, as well as the corporate governance provisions, have automatically terminated upon the completion of our initial public offering.
Removed
Registration Rights We have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the shareholders agreement. 117 Table of Contents Demand Registration Rights.
Removed
Holders of at least 10% of the registrable securities (including preferred shares and ordinary shares issued upon conversion of preferred shares) then outstanding have the right to demand that we file a registration statement of all registrable securities that the holders request to be registered and included in such registration by written notice.
Removed
Other than required by the underwriter(s) in connection with our initial public offering, at least fifty percent (50)% of the registrable securities requested by the holders to be included in such underwriting and registration shall be so included.
Removed
We have the right to defer filing of a registration statement for a period of not more than 90 days after the receipt of the request of the initiating holders if we furnish to the holders requesting registration a certificate signed by our president or chief executive officer stating that in the good faith judgment of our board of directors, it would be materially detrimental to us and our shareholders for such registration statement to be filed at such time.
Removed
However, we cannot exercise the deferral right more than once in any twelve-month period. We are obligated to effect no more than three demand registrations, other than demand registration to be effected pursuant to registration statement on Form F-3, for which an unlimited number of demand registrations shall be permitted. Piggyback Registration Rights.
Removed
If we propose to file a registration statement for a public offering of our securities, we must offer shareholders an opportunity to include in the registration all or any part of the registrable securities held by such holders.
Removed
If the managing underwriters of any underwritten offering determine in good faith that marketing factors require a limitation of the number of shares to be underwritten, and the number of shares that may be included in the registration and the underwriting shall be allocated (i) first, to us, (ii) second, to each holder requesting inclusion of its registrable securities in such registration statement on a pro rata basis based on the total number of registrable securities then held by each such holder, (iii) third, to holders of other securities of us.
Removed
Form F-3 Registration Rights. Our shareholders may request us in writing to file an unlimited number of registration statements on Form F-3. We shall effect the registration of the securities on Form F-3 as soon as practicable, except in certain circumstances. Expenses of Registration. We will bear all registration expenses, other than underwriting discounts and selling commissions.
Removed
Our shareholders’ registration rights will terminate upon the earlier of (i) the fifth anniversary of the completion of our initial public offering, (ii) as to any shareholder when the shareholder together with its affiliates can sell all of its shares subject to registration rights in reliance on Rule 144 promulgated under the Securities Act without transfer restrictions, and (iii) the consummation of a liquidation event.