NIU stock analysis: can the Chinese electric two-wheeler manufacturer still accelerate?


NIU stock analysis: can the Chinese electric two-wheeler manufacturer still accelerate?

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Matthias Krey

NIU Technologies, based in China is a main player in the global electric two-wheeler market. The company grew around 35% annually over the last years. NIU just reported that for the first time the company has sold more than 1 million vehicles per year. The manufacturer and analysts are bullish on the future sales outlook and NIU is going to double its production capacity soon.

But the supply chain disruptions impacted international shipments and increased material prices put pressure on the net margin. The geopolitical situation does not help NIU. Over fears of China following Russia’s example and playing its military muscles, investors have put additional pressure on the stock price. The stock is now down almost 80% from its all-time high in 2021. NIU is currently valued at 1.5x its sales, which is extraordinarily low for a company growing at this pace.

NIU has a flawless balance sheet and it can be expected that NIU can weather the storm from a financial perspective. There is reason to believe the niu stock analysis could also rise again.

So let’s find out whether an investment could currently be worthwhile. Is the NIU share too expensive? Or should one buy NIU shares right now? I try to approach these questions.

You will find out how the business model works and how good it is, what the current strategy looks like, what the opportunities are and where the risks lie. Have fun!

Table of Contents

Table of Contents

Business Overview

Let’s first get an overview of the company and understand why NIU Technologies is a Pure Climate Stock.


NIU Technologies (NASDAQ:NIU), founded in 2014, is a Chinese and globally leading manufacturer of electric two-wheeled vehicles powered by lithium-ion batteries. Its CEO is cofounder Yan Li, operating since 2017.

The company has maintained solid growth since its IPO in 2018 and has sold over 2 million electric scooters, motorcycles, and bikes. It has expanded into 38 countries with retail stores across cities in Asia, Europe, and Latin America.

NIU’s shares have lost more than half of their value during the last 12 months, with a kick in global sales but slowing growth in the Chinese home market.

Business model

NIU does not only manufacture its products but also designs them in-house. The company has eight product series including e-scooters, kick-scooters, electric motorcycles, and a performance bicycle, as well as additional accessories.

NIU claims its patented NIU Energy Power Tech, a lithium battery and battery management system technology, is lightweight and has a long-lasting life and range.

The company sells its products through an omnichannel retail model with franchised stores, distributors, and their online store. They also have an app with more than 450,000 users as of 2018.

Size and valuation

By market share, NIU is one of the biggest players in e-mobility, with a market capitalization of $1.03 billion that places it at position 3 in China and in the top 20 electric vehicle (EV) manufacturers worldwide.

Why is NIU Technologies a Pure Climate Stock – NIU Stock Analysis?

NIU makes 100% of its revenues by selling electric two-wheelers, which are essential to transition away from fossil fuel use and related carbon emissions for individual transportation. NIU has a patented power technology, including a lithium-ion battery and a battery management system. Even if the batteries cannot be charged with fossil-fuel-free electricity yet, on average EVs already emit fewer carbon emissions than fossil-fuel-propelled EVs. Therefore, NIU is a Pure Climate Stock.


Share price development

NIU went public in 2018 with an initial share price of around $8. In the first years, the price remained stable, but from mid-2020 it started growing steadily to reach an all-time high of almost $49 in February 2021. But afterward, the stock crumbled with company growth not meeting investors’ expectations and is now trading just above $10.

NIU stock analysis

Key figures

Unless otherwise stated, all figures are USD and trailing twelve months (TTM). Addition ‘(e)’ = expected in the current year.

Key data:

  • Market Capitalization: $796 million
  • Revenue: $536 million
  • EVs sold: 2.4 million scooters sold globally
  • Profit: $37.37 million
  • Free cash flow: $49.65 million (annual)
  • Country: China


  • P/S ratio: 1.5
  • P/E ratio (excluding extra items, annual): 25.36
  • P/CF ratio: 17.17
  • PEG ratio: 0.40

Growth & debt

  • D/E ratio: 18.12 (annual)
  • Gross margin: 22.4%
  • Revenue growth (from 2019-2021): 35%

5 Facts:

-NIU is a TOP-20 provider of electric two-wheelers globally and in 3rd place in China.

-The company has sold over 2.4 million e-scooters worldwide.

-Revenues have grown by ~35% over the last 3 years.

-The company has strong financials and further growth potential.

-Stock price is down 65% year-on-year and could show a turnaround.

Business breakdown: business model & strategy analyzed

Let’s look at NIU’s business model and strategy in more detail:

How strong is the sales growth?

NIU has experienced impressive sales growth recently, mostly driven by the design and release of new models, increasing brand recognition, and expansion of their retail network both in China and overseas. This is how revenue developed in the last couple of years.

2018: $234 million.(+92%)

2019: $328 million (+40%)

2020: $387 million (+18%)

2021 (ttm): $537 million (+38%)

NIU’s home market is China and still accounts for the biggest share of the company’s sales. However, Chinese sales have been slowing down despite aggressive growth strategies, due to new competitors and low barriers to market In terms of their overseas sales, 2021 led to a kick in their revenue after expected sales weren’t reached during the However, the company has set up a wide distribution network in Europe and saw an important growth in European sales that should continue to increase with demand acceleration, lower distribution costs, and a ready-to-deliver network. The Latin American market also grew, with sales booming in Mexico and Colombia. In North America, NIU started to ship the first bulk of kick-scooter.

In 2018, the company generated 87.1% of its revenues from China, and the rest from Europe and other overseas markets. Unfortunately, NIU does not provide more recent information on sales per region.

Throughout 2021 NIU’s sales increased 58.3% year-over-year (with a 49.2% growth in China and a 155.8% in international markets).

For the future, NIU has ambitious sales targets and the company is doubling the production facility to increase capacity to 2 million units per year. Additionally, NIU has announced the release of a new e-bike, as well as an expansion to bigger vehicles under their new brand “Niutron”.

niu business growth

What is the business model and strategy?

The company makes money through the design, manufacturing, and sale of electric motorcycles, mopeds, bicycles, and kick-scooters.  NIU has a product portfolio consisting of eight series, four e-scooter series, including NQi, MQi, and UQi with smart functions, and Gova, two urban commuter electric motorcycles series RQi and TQi, a performance bicycle series, NIU Aero, and a kick-scooter series, KQi. The company has adopted an omnichannel retail model, integrating the offline and online channels, to offer the products and services.

The biggest percentage of NIU’s revenues comes from the sales of the smart e-scooters to offline distributors in China and overseas at a discount retail price and incentivizing them with sales volume rebates. The company also sells directly to individual consumers through third-party e-commerce platforms and its own online store.

NIU also generates a small percentage of its income from its proprietary accessories and spare parts. It also obtains service revenues with the NIU app and NIU cover (sale of insurance policies).

niu products and services

Areas of application/relevance of the product/service

NIU’s two-wheeled vehicles are meant for individual transportation.  Their size makes them specifically ideal for Asian megacities, but their popularity is expanding worldwide.

In the last years, NIU has also started NIU fleet services to provide multiple vehicles to companies, particularly for deliveries with clients such as Domino’s Pizza and Takeaway. NIU sharing allows sharing e-scooters through an app.

Deep dive mechanisms of the business model

NIU’s main growth strategy is based on product portfolio and retail network expansion. In terms of products, NIU is planning a launch of  5 new products .

Furthermore, the company is also seeking to create stable growth in their home market and overseas sales, with expansion to the medium-range market in China with more retail stores, developing new product categories in Europe and the US, and introducing high and mid-end models in Indonesia.

The gross margin is relatively stable but slightly decreased to 20% compared to up to 22% in previous years. This might be due to the increase in sales of lower-end models vs premium vehicles.

niu gross margin

When NIU went public, operating margins were negative. Since 2019, the operating margin is positive with a bandwidth between 7.5% and 8.5%. The net margin was usually 1% below the operating margin. Analysts expect the net margin for 2021 to be just below 7% due to rising material prices as part of the Post-Covid recovery.

Evaluation of the business model

  • Network effects
    NIU can generate network effects by increasing its services offering when more people buy e-scooters. But since NIU doesn’t create their own charging stations, for example, I consider network effects to be negligible.
  • Sales with lock-in
    Since NIU also sells spare parts, insurance, and an app subscription paired to its vehicle, some lock-in effect could be expected but only for additional and accessory products, not for scooters, bikes, or motorcycles. I therefore cannot see a strong lock-in effect.
  • Economies of scale
    I see strong economies of scale in NIU due to its size. NIU sources components from domestic and international suppliers. With NIU’s growth in scale, the company will obtain more bargaining power. Additionally, their platform-based engineering system helps control product costs to a certain extent since new models can be easily adaptable to existing production lines.
  • Proprietary technology (moat)
    NIU has invested in protecting its intellectual property by patenting its models’ design and components. The company claims that its smart e-scooters are the first in the industry to provide regular over-the-air updates to fine-tune the performance. But I do not see any proprietary technology that provides unique value to customers that the competition could not develop.
  • Branding

    With a solid user base for its app (450,000 users as of 2018, no recent data) and a community built around its products, (e.g. 900,000 users riding every day), I consider NIUs branding as strong.

Summary: NIU has shown stable revenue growth over the last few years. The same cannot be said about its operating margin that has not reached the all-time-high of 2019 again. Nevertheless, the company has strong products, technology, and branding and it is doubling its production capacity while expanding to new markets. The outlook on further sales growth looks positive to me, but margin development is a concern.

Market analysis : can NIU outcompete the market?

Market size and competitors

The global electric two-wheeler market reached a value of $31.5 billion in 2021. Looking forward, it is expected that the market will be worth $ 66.1 billion by 2027, with a growth rate of 13.5%.

Europe is expected to witness the highest growth in the forecast period, 2022-2026. In terms of national markets, the United States market is forecast to grow at the fastest rate and is expected to reach around $680.8 million by 2026.

Up until this point, the Asia-Pacific region accounts for the highest share of the market. China is the largest market and India is the fastest-growing one within the region.

global electric two wheeler market

Source: MRFR Analysis (2018)

The top players operating in the global electric two-wheeler market are Niu Technologies, Yadea Technology Group Co., Ltd., Jiangsu Xinri E-Vehicle Co., Ltd, and a couple of smaller companies. All of them are based in Asia.

In China, Yadea, Aima, NIU, and Xinri dominate more than 50% share in the Chinese electric two-wheeler market. NIU is in 3rd place in China in terms of market cap.

chinese e-scooter market cap

Source: Flowbank (2021)

How does NIU compare to its competitors?

The top company in China, and one of NIU’s biggest competitors, Yadea is also a high-end electric two-wheeled vehicle manufacturing enterprise. Yadea sells several types of e-scooters and various e-bikes, as well as having a batteries and chargers segment.

NIU compare to its competitors

Although operating on a different scale, NIU and Yadea relatively to their size show similar results for the key financial figures. What is noticeable is that NIU achieves a slightly higher operating margin.

Drivers and outlook for electric two-wheeler market

The COVID-19 pandemic has negatively impacted the sales of electric two-wheelers. In 2020, sales declined in comparison to 2019. The pandemic also impacted production and the supply chain network.

However, sales seem to be recovering during 2021 with several positive drivers for the market.


The low total cost of ownership of electric two-wheelers is one of their biggest selling points. The major reason behind this is the increasing oil prices that make operating costs of electric two-wheelers favorable.


Additionally, many government initiatives to reach climate targets and counteract air pollution are contributing to increased acceptance of electric vehicles, including two-wheelers.

These initiatives usually come in the form of purchase subsidies. There are some other benefits instated by governments for electric two-wheelers such as preferential parking, free entry in congested zones, and concessional toll charges.



Electric two-wheeler fleets are increasingly used by courier and e-commerce delivery companies, for providing postal and delivery services. This leads to a further uptake in this market segment.

The improvement and growing affordability of electric two-wheeler components can also positively contribute to market growth. Market players are continuously investing in research and development activities to increase battery life, performance, and design, to boost sales.


Regarding vehicle types, considering also motorcycles and e-bikes, the e-scooter is the dominant one. In terms of batteries, lead-acid still has a larger share than lithium-ion, but experts expect this to change in the future. Manufacturers are increasingly attempting to develop electric scooters and motorcycles equipped with advanced lithium-ion batteries, because of their limited lifecycle and usable capacity. Lithium-ion batteries are also lightweight and can store more energy per kilogram of weight compared to lead-acid. Lithium-ion batteries’ cost is still higher, but it has come down significantly in the last few years and is expected to reduce.

global e-scooters market share

Urbanization and expanding charging infrastructure networks are also market drivers. Charging stations are increasingly installed across main cities in China and worldwide. For example, China just announced plans to build enough charging stations for 20 million electric vehicles by 2025. But, if the plans do not work out and stations aren’t developed fast enough to match the market growth, they could become a limiting factor.

All top competitors of NIU in China are now focused on lithium-ion batteries. Yadea is also introducing graphene into its batteries. This material shows a lot of promise since it offers higher electrical conductivity and capacity, allows for faster charging, can be lighter, safer, and even more environmentally friendly. However, graphene batteries are still under research and the ones available in the market today are hybrids with lithium. The production cost is also too high to be able to replace lithium batteries.

As a main player with best- technology, Niu Technologies is generally well-positioned to benefit from the market drivers and future growth.


Asset 4

SWOT analysis: strengths, weaknesses, opportunities, and threats analyzed

Let’s explore the strengths, weaknesses, opportunities, and threats of NIU’s current business model.


  • Strong sales growth: NIU is certainly on a growth path and the doubling of the production capacity is a manifestation of the companies’ growth strategy.Based on what I know about NIU now I think this is an achievable strategy.
  • Brand: NIU has a robust branding strategy with strong brand awareness in China and international markets. As the company grows, I expect the brand to get even stronger.
  • Product & design: As far as I can see NIU seems to offer high-quality products with an attractive design and useful extra-service (app pairing and insurance).
  • CEO ownership: The CEO has a 5% stock in the business and therefore a strong additional incentive to keep the company on a successful path.
  • Healthy balance sheet: NIU has a strong balance sheet. Debt is low and the company has a very strong cash position. This means that company has been growing in a financially sound way.

niu technologies stocks graph nasdaq

Source: Nasdaq (2022)


  • Low-profit margins: NIUs’ profit margin is 7%, within the middle single-digit range; So, NIU does not have a large buffer for profits. Since NIU is planning to increase sales with its lower-end products, its margins will likely shrink which will reduce profitability in the future.
  • Growing competition: NIU does not have a strong moat. Customers can easily change from NIU products to those of the competition, as several other manufacturers are offering similar products. This is already evidenced by a decline in the sales growth in the home market.


  • Environmental benefits: With bad air quality in big cities around the world, particularly in Asia and Latin America, governments are providing monetary and non-monetary incentives for electric vehicles. And also the individual customers have a growing environmental concern and are shifting towards less polluting transportation alternatives. Both trends provide a large opportunity for long-term growth for electric two-wheelers.
  • Economies of scale: The sales growth and particularly the doubling of the production capacity will bring down the manufacturing costs per two-wheeler produced by NIU. This will be an important factor for counteracting the margin pressure.


  • Pressure on margins: As soon as a segment promises a lot of growth, many companies also want to enter this market due to its promising future. That increases the cost of materials, qualified employees’ salaries and lowers the profit margin. The declining margins since the IPO illustrate that there is already significant pressure on the profitability of NIU. If material prices remain high, I do see a risk of margins decreasing into the middle single-digit range.
  • Lack of charging facilities: The charging infrastructure for electric vehicles has to be ahead of the number of vehicles in the market. Otherwise, NIU’s sales potential cannot materialize because clients are not convinced that they can charge their two-wheeler easily. If the investment in charging capabilities isn’t boosted sufficiently in China and NIU’s target countries abroad, the current infrastructure might not be sufficient to support growing sales.

  • Technological development: NIU has not yet integrated the more efficient graphene battery technology in its products, while the main competitor Yadea has. NIU needs to make sure that it keeps in step with its R&D efforts and is not left behind in terms of new technology developments.

  • Political risks: Chinese stocks traditionally trade with a risk premium. The Chinese government has over the past year intervened in financial markets on a scale that was not seen in the last decade; showing its socialist side. There is another risk element involved in investing in China that the war in Ukraine has put in the foreground. The sanctions on Russia have shown that military conflict can have severe negative consequences on the economy of the aggressor. In case China should impose war on Taiwan (which China occasionally indirectly is threatening to do), there will be serious repercussions for the Chinese stock market.

Scenario analysis: Is NIU trading at its fair value?

Calculating the fair value of any business is always a challenge and several assumptions about the future need to be made. However, we now have a comprehensive overview of NIU stock analysis. So, let’s take a look at the stock, compare quality and valuation and then draw a conclusion.

The fair value of the share

For the determination of the fair value I made the following assumptions over 10 years:

# 1 sales growth

My valuation model works with growth estimates for 2022-2026 (short-term) and 2027-2031 (long-term). This is how I determined growth for the two periods:

  • Revenue development has been positive, although affected by the pandemic. Sales increased 40% from 2018 to 2019 and then 18% from 2019 to 2020 due to Covid. However, recovery is already noticeable with revenues increasing 38% during 2021 (TTM) with analysts even expecting growth as high as 47% for the full-year results.
  • Current analyst expectations: +59% for 2022 compared to the 2021 estimate. Market experts expect a growth rate for the electric two-wheeler market of 13.5% for the next 5 years, with higher growth percentages in some regions.
  • My short-term assumption for NIU: I am assuming that NIU can grow faster than the average market growth as it is well-positioned. But, I am more conservative than analysts’ expectations and assume a more modest 17.5% growth due to slowing home market sales and progressive growth recovery in the international market.
  • My long-term assumption for NIU: 12.5% sales growth per year since consumers are shifting more towards electric vehicles. A higher growth might be possible, but a lot has to play in NIU’s favor for it to work out.

# 2 net margin

The net margin has fallen from the all-time high in 2019 of 9.16% to 6.9% in 2020 and even further to an estimated 6.8% during 2021. However, analysts estimate net margin to rise above 7% and reach 2019 levels in the next 2 years. Due to rising material prices, I am more cautious and assume a 6% average in the long term.

# 3 evaluation level

Today the stock is valued with a P/E of 25. This ratio is expected to diminish in the next years. I assume that the share, based on the other assumptions, will be valued at an average P/E ratio of 18. This is relatively high for a manufacturing business, but I think it is justified due to the continued strong growth of NIU.

My return expectation

According to the yield calculator, the stock looks currently undervalued. Since the company has shown strong results and has good prospects of growth, I see the potential of the stock price significantly rising in the next years.

Conclusion: Buy NIU shares? Pro Contra


  • NIU has shown really strong results since the IPO with consistent growth leveraging its brand. I expect this will continue towards the future.
  • The general environment is very favorable towards electric vehicles, with a lot of governmental support.
  • The NIU stock analysis seems to be undervalued and with chances to rise it can be a good time to buy.


  • NIU’s margins are a concerning factor since the company hasn’t managed to recover to 2019 levels. There are a lot of competitors and the barriers to entry are low. This can put further pressure on the margin.
  • NIU might not be up to speed with regards to the latest battery technology as Yadea is.
  • Geopolitical power is shifting. Few people expected Russia to impose war on Ukraine. In case China is feeling encouraged to invade Taiwan, there will be serious negative consequences for the Chinese stock market and the NIU stock.


My opinion

Despite the good news on NIU’s sales growth throughout 2021, the share has lost 65% of its value over the last 365 days. My valuation has shown that this cannot be justified by fundamentals. The company can be expected to continue growing fast and the balance sheet is flawless. What is more, in my personal rating NIU reaches a score of 61 out of 100 points, which is a very good result. Considering the key metrics, NIU looks undervalued to me. I am of the impression that the slump in NIU’s stock price is an expression of investors’ concerns over the political risk in Chinese stocks and over the continued rise in material prices and how they would impact NIU’s margin. I hold a position in NIU since mid-2021 and I will certainly hold on to it.

IMG 20220309 WA0003

In this content I am presenting my personal opinion as an active private investor. This content is not intended to provide investment, financial, accounting, legal, tax or other professional advice and should not be relied upon or regarded as a substitute for such advice.