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Niu Technologies (NASDAQ:NIU)
Q3 2019 Earnings Call
Nov 25, 2019, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Niu Technologies Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

Now, I will turn the call over to Mr. Jason Yang, Investor Relations Manager of Niu Technologies. Mr. Yang, please go ahead, sir.

Jason Yang -- Investor Relations Manager

Thank you, operator. Hello, everyone. Welcome to today's conference call to discuss Niu Technologies results for the third quarter 2019. The call is being webcasted from Company's IR website. A investor presentation and replay of the call will be available soon at ir@niu.com.

Please note today's discussion will contain forward-looking statements made under the Safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks, uncertainties, assumptions and other factors. The Company's actual results may be materially differ from those expressed today. Further information regarding the risk factors is included in the Company's public filings with the Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements, except as required by law.

Our earnings press release and this call include discussions of certain non-GAAP financial measures. Press release contains a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results.

On the call with me today are our CEO, Dr. Yan Li; and our CFO, Mr. Hardy Zhang. Now, let me turn the call over to Yan.

Yan Li -- Chief Executive Officer

Thanks, Jason and thanks everyone for joining us on the call today. We have observed a gradual market recovery in Q3 be in the traditionally a peak season of the year. Our sales volume has increased by 24% and revenue by 33% in Q3. We have also enhanced our gross margin to 22.2% and net profit margin at 10.1%, both were beyond our expectations. We continue to build our leadership in urban mobility via products and technology development, marketing events and user-based activities and retail expansions.

First, we'll launch our global product line with three products G1, G3 and G5 in late September. The GOVA product line is beautifully designed, but there was a different design style to expand our style diversity. With product specs bias toward functionality, the GOVA product line is positioned as a value for money products with retail price started at RMB2,999, perfect for entry-level users under the new China regulations. G1 was shipped in late September and the G3 and G5 were shipped in late October. Despite the market already headed to a low season in October, we have seen quite a bit demand on this new product line.

Second, we have launched our first power-assisted bicycle products, NIU Aero EB-01 in Web Summit in Lisbon in November this year. The NIU Aero EB-01 is the hybrid model of the electric scooter and the bicycle, combining best features from both sides such as high battery capacity and the pedal assistance for longer range, scooter Level 2 suspension with sports bike wheels for better riding experience and the intelligent lighting system for safety. The EB-01 is classified as electric bicycle in Europe and in the United States. And this is our first product to target any more than 4 million units electric bicycle market in the Europe and in the US. The EB-01 will be manufactured in Europe and then, we plan to ship this product first half 2020.

Third, we have also launched our full GT series, led by our newly designed N-GT scooter, together with upgrade N-GT and the U-GT. Inheritance of design style of our award-winning N-series and combined with the GT powertrain technology, N-GT is a two battery electric motor with top speed up to 70-kilometer per hour, and the range of 110 kilometers. We target to ship this product in first half 2020 as well.

Lastly, we'll also attend the 2020 CES in Las Vegas, with quite a few revolutionary products to be launched at the CES, make sure you do visit our booth then. Besides our products, we have also enhanced our fleet management solution. It is the hardware and the software SaaS solution with our connected vehicles, the fleet management software and the adaptively APIs. It's a one-step solution for order sharing operators and the fleet management businesses. We have supported 16 sharing operators across 14 countries year-to-date.

Now as NIU is the leading lifestyle brand in urban mobility, we continue to enhance our brand awareness through both brand marketing and targeted marketing. We understood that the most efficient approach to enhance the brand awareness is through brand marketing or some amount of our existing customers. Hence, the continuous improvement of customer experience and engagement is essential.

In July, we have rolled out our NIU points system on our app, users can obtain NIU points via various activities and the milestones. Our redeem points for Niu lifestyle accessories such as T-shirt, mugs, key chains. Till date, we have more than 86,000 users participating in the program with over 5 million points distributed.

In September, we also rolled out our new WASH program, each user can obtain a free WASH coupon via our app and redeem at any of the 1,000 stores in China. The program has been online for about 60 days, and we have more than 240,000 coupons claimed. In September, we also launched a one-month new user referral promotion sales where existing users can receive new points by referring a new customer. More than 30,000 users have participated in this promotion.

So all those programs enable us to engage our users more frequently online and offline. And all those programs rely on our direct into action with our users on the new app, enabled by our smart scooters. With the largest connected user fleet globally with more than 960,000 units, we have a mass competitive advantage over any competitors in this market and then, we'll continue to add more user interaction features to increase user engagements.

Second, being a lifestyle brand and with the fashionable designs scooters, we're very unique to position to go viral on any social media channels. Besides the surprising celebrities spot-on we mentioned last quarter, we continue to put the content either internally or through our users to go viral on the main social media platforms such as Weibo, Douyin and WeChat in China, and the Instagram, Facebook and YouTube globally.

Our quarterly Douyin views across multiple accounts has increased from 3 million to 10 million. For example, our long distance riding event of user riding to Tibet also received more than 8 million views. Lastly, our 30-plus KOLs across Europe has also created more than 3,000 pieces of content and received more than 1 million views.

We continue to participate in major exhibitions globally to build our brand awareness. We have attended the IFA in Germany in September, Autonomy in France in October; Tokyo Auto Show in Japan in the October; and the Web Summit in Lisbon, Portugal; and EICMA in Milan, Italy in November. Collectively, we have received more than 100 media coverage. Niu is well positioned as the new variability through urban mobility in auto shows.

Now supported by the new products, the enhanced customer engagement and brand awareness, we continue to expand our footprint. By end of Q3, the number of franchise stores in China has reached to 1,020 covering 182 cities. Our flagship and premium stores overseas have also reached to 20 by Q3. We're also very happy that we had our first flagship store open in London, UK and the Milan, Italy in November, a great milestone for the future growth in those two countries. We're also funding our dealer showrooms across the United States, expecting to have more than 12 dealer showrooms from East Coast to West Coast by end of this year.

Now on the operations side, we have finished the buildup our Phase 1 of our new factory. The factory will be fully in operation in December, and this will add additional 700,000 units capacity, totaling our overall capacity to 1.08 million units a year.

Lastly, let me give you a brief update on the China market. As mentioned last time, the overall retail market has been uncharacteristically soft since the implementation of new regulation. We have observed a significant market contraction in May and June in the market where the regulations were strictly enforced. We have also observed some bounce back in Q3, partially due to Q3 was traditionally high season and partially due to the spillover of the Q2's demand. The regional market quickly declined in Q4, as Q4 was traditionally a low season and the true market demand has not really bounced back yet. The sluggishness will likely to extend to the Chinese New Year in 2020, and we do expect the market will start to bounce back post the Chinese New Year as consumers begin to get used to the new regulations and the many administrative processes such as getting license plates are smoothed out.

Currently, we have four models, the U+, U1, US and the G1, combined with the new regulation for the electric bicycle category in China, where our N and M series are classified as the electric motorcycles. We are accelerating our product development effort and expecting to launch several new product lines for the electric bicycle categories in first half 2020. We believe those new products will put us in right position, where the markets start to recover next year.

Now, I will turn the call over to Hardy to discuss our financial results. Hardy?

Hardy Zhang -- Chief Financial Officer

Thank you, Yan and hello everyone. Our press release contains all the figures and the comparison units. We have also uploaded Excel format figures to our IR website for the reference. As I review our financial performance, keep in mind that we are referring to the third quarter figures, unless I say otherwise and that all monetary figures are RMB, unless otherwise noted.

As Yan mentioned, the China e-scooter market recovered quite a way during the third quarter, even though at low pace. Our Q3 sales volume reached 149,000 units, increased by 23.5% year-over-year, compared with the 13.8% in the second quarter. The new national standard continues to affect the China's retail sales market and the competition become more serious, with competitors lowering sales price to maintain their market share.

We are pleased to be able to deliver double-digit growth with improved margins. Our gross margin reached 22.2% at net margin 10.1%. Total revenues rose 33% to RMB654 million, in line with the guidance we provided earlier. The revenue growth was mainly driven by volume growth of 23.5% as a result of the recovery in China market and continued its strong performance in the international market.

I want to highlight that our revenue growth in this quarter at high quality. First, our accounts receivables reduced from RMB120 million in the second quarter to RMB62 million in the third quarter. And the customer received in advance or in the other words, the prepayment from our distributors was RMB44 million.

Second, we maintained a high gross margin at 22.2%, which is 9.8% higher than Q3 last year. We managed to grow our top line with higher probability. All of this translated to our strong cash flow and increase the cash balance. By the end of Q3, we had cash term deposit and short-term investments of RMB919 million in the aggregate, compared with the RMB667 million in the second quarter, an increase of RMB252 million to our cash balance, all above demonstrated to high quality of our revenue growth.

Revenue per scooter was RMB4,380, up 7.4% year-over-year. That growth was driven by both higher average sales price per scooter and a strong sales of our accessories, spare parts and the services. The average scooter sales price grew 1.5%, driven by three key factors. First, and the more important, the higher proportion of scooter sales from international markets where our sales price are much higher than China sales price. In the third quarter, our international scooter sales accounted for 7.6% of the total scooter revenue compared with the 5.1% in the same period of last year. Secondly, in April this year, we increased the China retail sales price by 1% to 5% for selective models.

Third, the unfavorable change of product mix in China market and this partially offsets the two positive factors mentioned above. The proportion of sales volume from N and M series was around 35% in the third quarter, compared with the 65% in the same period last year. N and M series in general has higher sales price and therefore, the lower proportion of sales from those two series actively affected our average sales price per scooter.

Our sales for accessories, spare parts and services continues to be very strong in this quarter. On average for each scooter sold, we also sold RMB524 of accessories, spare parts and services, increased significantly from RMB278 per scooter last year. The increase was mainly driven by strong accessories and the spare part sales in both China and international markets and also by the R&D service revenues from the development collaboration agreement we signed with the BW [Phonetic] Group earlier this year.

Gross margin was 22.2%, 9.8 percentage points better than this time last year and 1.5% lower sequentially, mainly due to the seasonality. Over the longer term, we expect our gross margin to be in the range of 20% to 25%. So we are happy to be moving close to our long-term goal. Margin expansion was helped by three key factors.

First, the favorable revenue mix. Ancillary revenue from sales of accessories, spare parts and services was 12% of total revenue, compared with 6.8% last year. International scooter sales was 7.6% of total scooter revenue compared with 5.1% last year. Both ancillary revenue and the international scooter sales have higher gross margin and hence, helped our margin expansion. And however, I want to caution you that our sales have seasonality as above mentioned revenue mix will fluctuate from quarter-to-quarter.

Second, the margin expansion was helped by the price increase. As mentioned earlier, we increased retail sales price in April this year and adjusted the wholesale price to our distributors accordingly. That price increase contributed to the improved gross margin.

Third, our continued efforts to optimize costs helped the margin expansion. The cost of revenues on comparable basis further declined. We secured a cost savings on raw materials and benefited from the economy of scale in our production. We were able to negotiate lower procurement price because of our larger scale and in-depth knowledge of the supply chain. We believe such cost reductions are sustainable and we will continue to benefit our gross margins for the coming quarters.

In summary, out of the total 9.8% margin expansion in the third quarter, we estimate roughly 2 percentage points came from revenue mix, another 2% came from price increase and the remaining 6 percentage points came from cost reduction.

Operating expenses on comparable basis increased in line with the growth of our business. Our total operating expense, excluding share-based compensation, was RMB86 million, increased by 46% year-over-year. Operating expense as percentage of revenue was 13.1%, 1.2 percentage points higher than the same period last year. The increase was mainly due to our marketing and the promotion activities in the third quarter and also higher depreciation and amortization expense as a result of expanding retail sales network. As you may recall that during our second quarter earnings release, we advised you that we intentionally postponed some of our sales and the marketing expenditures from the second quarter to the third quarter, due to the implementation of the new national standard. Therefore, the 1.2 percentage points higher sales in the marketing this quarter was mainly driven by the timing of the spending.

When look at the first of three quarter numbers, our sales and the marketing expenses, excluding share-based compensation, was 8.5% of total revenue, reduced by 1.7% compared with the 10.2% in the third quarter last year. We continue to see the leverage of operating expense. In the third quarter, we have RMB12.6 million government grant, out of which RMB5 million is a one-off reward and remaining as related to our new factory expansion in Changzhou.

Our GAAP net income was RMB66.4 million, with net income margin of 10.1%. We are pleased to operate profitably, even as we invest heavily in growth, which demonstrates the strength of our business model.

Turning to our balance sheet. We ended the quarter with RMB919 million cash, term deposit and short-term investments, RMB252 million higher than last quarter. Operating cash flow was positive RMB276 million. Capital expenditure was RMB39 million, mainly for building the new factory in Changzhou and for expanding our retail sales network.

Now let's turn to guidance. We expect fourth quarter revenue to be in the range of RMB450 million to RMB515 million. This represents year-over-year growth of 5% to 20%. We recognize the challenging market environment, and we are working hard to accelerate the growth next year with enriched product portfolio in both China and international market. Please keep in mind that this forecast reflects our current expectations and could change.

With that, let's now open the call for any questions that you may have for us. Operator, please go ahead.

Questions and Answers:

Operator

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Alex Potter. Please ask your question.

Alex Potter -- Piper Jaffray -- Analyst

Hi guys, thanks for taking my question. Very nice quarter. I wanted to ask, first of all, about the competitive environment, given the new regulations. You mentioned a lot at the lower-end competitors are cutting price in order to try to maintain market share. Yet you are increasing price or you did in April, and it seems like your market share is increasing. So it sounds like the pressure on the low-end competitors must be rising pretty substantially. If you could comment on your ability to continue consolidating the market, that would be helpful. Thanks.

Yan Li -- Chief Executive Officer

Thanks, Alex. I think that's a good question. So what we have observed basically when the new regulation was in place in the China market, they -- actually due to the sluggish of the retail market, we do see traditional players really slashing prices, try to maintain the volume. We have seen fierce competition on products which used to sell at a RMB2000-ish, now being sold at almost RMB1,500 or RMB1,200. Most of those products are still acid-based because at this point, there is still one version of acid-based electric scooter that meet the new regulation requirement. It's basically the 60 -- sorry, it's a 48-volt and 12 M-powered lead acid battery-based scooters, very much look like a bicycle type. And most of the pricing competition is that -- on that particular product line, where people competing really RMB1,500, less than RMB1,500. So if you look at that particular product and then market segment in that product is addressing to is actually very different with our product lines.

The most of [Indecipherable] with the exception of GOVA before -- with Niu, even our cheapest one, US, is a RMB3,500 and GOVA is at RMB3,000. So we are actually addressing sort of at least the mid-to-high end of the entire market. We are in that market to our extent really -- there hasn't really been any sort of a price competition there. And we're sort of enjoying a more or less a unique leadership there.

Alex Potter -- Piper Jaffray -- Analyst

Okay. Very good. Also you mentioned obviously the gross margin holding up very nicely. You mentioned that the raw material pricing, obviously you're getting some procurement benefits as your scale rises. Is this specifically related to battery procurement or is it across the board. What raw materials in particular are you benefited from?

Hardy Zhang -- Chief Financial Officer

Yeah, this is Hardy. I think across the border, we do see the cost decline and normally, we see the body parts of the scooter has declined anywhere between 3% to 5% depending on different components and for the entire battery sale, also the battery pack, we see close to 10% decline. This is compared to the cost base last year. And in the third quarter, we see slightly decline compared with the second quarter. And so far, based on the current trend of this market over the supply in the market, we do believe there is a potential for us to further negotiate for this cost, so that we can benefit further in the future. Hope, this answers to your question.

Alex Potter -- Piper Jaffray -- Analyst

Okay, that's great. And then last question. Obviously, you're generating cash. What are your plans for deploying this cash that you're raising? I mean, is that primarily into more sales and marketing, new product development breaking into overseas markets? What are your priorities, because obviously having a positive cash position and positive operating cash flow is a nice position to be in. Just wondering how you're going to spend it. Thank you.

Yan Li -- Chief Executive Officer

I think that's a great question. So we're looking and actually any sort of cash we are generating eventually, it has to translate it or transform to -- translate to profit, right. So we're looking and the profit are coming really through three parts. One is actually continue to really accelerate the growth from this revenue from the sales volume perspective. That means some part of cash will be in that -- in building out the retail expansions. When you look at this year, we actually have significantly accelerated our effort in the first half of this year to build up stores. We also start to build up retail stores globally and that -- each of the store requires a minimum anywhere between -- in China, it will be somewhere around 100 -- sorry, $10,000 versus globally, it's about EUR20,000-ish of CapEx investment per store.

But having the retail footprint is actually essential for us to build up the brand and also support the sales growth. So I think that's one part of cash that we are investing. I think second, yes, we do have put in cash into building up the capacity to support the growth. This year, you see, we actually building up the new factory actually this year to add another 700,000 units of annual capacity and really to support the future growth. And the third part is actually I think there --- obviously there will be sort of the first two mainly talk about the CapEx part of it. I think the last part is actually, it's a cash or you can think of a portion of profit will be reinvested into the R&D, such that we can continue to come up as new product lines, as well as the marketing and branding expenses.

I'll turn to Hardy to additional add.

Hardy Zhang -- Chief Financial Officer

No. I think it is perfect.

Yan Li -- Chief Executive Officer

Okay.

Alex Potter -- Piper Jaffray -- Analyst

Okay, very good. Thanks a lot guys. Nice quarter.

Hardy Zhang -- Chief Financial Officer

[Indecipherable] other questions.

Operator

We have the next question from the line of Bin Wang. Please ask your question.

Bin Wang -- Credit Suisse -- Analyst

Hi. I'm Bin Wang. Actually, I have few questions. Number one about the competition, because we see the news flow, our list mentions Yadea like the Number 1 producer has been announced 1.5 million plant in Chongqing actually, maybe first on the high end. So -- and actually providing a new target will be around 6 million [Phonetic]. So implying that ASPs around RMB4,000. So if they can deliver actually head-to-head competitor, 1.5 million. So I just want to get your view about this high-end production base from Yadea, the competitors. That's number one question.

And number two is about the dealer expansion, actually because in this quarter only 15 dealers established compared to a few hundred in the past several quarters. So I just wanted to know the reason why the expansion has been slowing down, because this will be the key driver for our future growth. And you had just mentioned there's so many cash also to able to support the dealer expansion. But why is that -- just 15 and what's the guidance for the year-end? That's the second question about the dealer expansion.

And third one is about new products. You just mentioned in the CES you have some new products. At the same time, you also mentioned that the revised version for M series also to be debuted. I just want to check whether this is the same product, I mean new M will be in the CES or two different to -- two different products. These are pretty much my questions. Thank you.

Yan Li -- Chief Executive Officer

I think Bin, great questions. So let me try to address one by one and hopefully I don't miss any. I think first of all, on the -- I think the market is there. So there is nothing we can prevent other players to enter the market and they try to sell or try to attack or address our market there. But if you look at the Yadea or any other competitors in this market, I think they -- obviously, we have seen those competitors actually announced or actually announced or actually commercialized high-end product. And I don't think actually by simply building up a 1.5 million high-end capacity will allow them to actually obtain their market share. I think it's a combination of branding, having the right product and also having the right retail to actually to address the high-end market.

I mean, so far, we are still very confident. I don't have exact data. But if you look at around city-by-city basis, if you look at some of the cities, basically, if you look at the price range anywhere between RMB4,000 and up in some of the key cities, we are almost holding more than 50% of market share. So that's really a demonstration that de facto we are the dominant force in the sort of the mid to high-end market. So -- and with the competition coming, obviously, we're going to continue to also to ramp up our games [Phonetic] as well with the new products rolling out.

So let me address on the new product part and I'll talk about retail expansion. So if you look at, observe how we build up this business and build up this team in 2015, '16, '17, that three years, each year, we only announced one new product line. 2018, we did about three. And so far this year, we already announced -- actually, I'm counting myself right, for almost five to six or seven, right. So it's a -- we had a U+, US, S2 and we had the GOVA, G1, G3, G5. So those are commercialized and also the bicycle. Now, we also have the product that's ready to be commercialized next year, which is the new Aero EB as well as NG-T and the U-GT, right.

So we're really upped our games internal getting new product development. Now for the CES, the two revolutionary -- the couple of revolutionary products to be announced at CES are very different with the new M series. We will have a new M series announced in the first half next year, but the product that we're going to show in the CES are actually different. So -- and actually next year, we're not just talking about three products. I think if you look at, we have -- what we have -- look at how -- I guess, the number of products we developed in 2019, I think we're going to try to roll out. Basically, I don't have the exact number in count, but we're going to try to roll out as many products as possible as well in 2020 with the -- basically with the ramp-up of R&D team.

And then lastly, on the retail expansion, that -- yes, we have slowed our retail expansion in Q3. Even if you look at our historically if you look at 2018 and 2017, Q3 has always been a very low season to open retail stores because the Q3 has been traditionally a very hot season for selling scooters. So it's actually very difficult to turn over the stores. So typically, the hot season to open stores are Q1 and the Q4. So we actually try to accelerate our store opening in Q4, as well as the Q1 2020.

Bin Wang -- Credit Suisse -- Analyst

Thank you. Actually, I have last question about the outlook -- not guidance, it's outlook, for next year, what's the operating [Phonetic] volume number, which we are expecting. If you possibly can break down about overseas and China or especially in the China break down about NIU brand and the GOVA brand.

Yan Li -- Chief Executive Officer

This is...

Hardy Zhang -- Chief Financial Officer

You are asking for the outlook for next year.

Bin Wang -- Credit Suisse -- Analyst

Yes.

Hardy Zhang -- Chief Financial Officer

Or our outlook for fourth quarter.

Bin Wang -- Credit Suisse -- Analyst

Next year for sure. Next year, 2020.

Hardy Zhang -- Chief Financial Officer

I will address to you one by one. Hopefully, I don't miss. I think we would probably provide an update coming to the release in the next quarter.

Bin Wang -- Credit Suisse -- Analyst

Okay. Thank you.

Operator

We have the next question from the line of Tan Ho. Please ask your question.

Tan Ho -- Guideline -- Analyst

Yeah, good evening management. Couple of a detailed questions. One is for the bike you sold 149,000. And so, could you please give us the breakdown and -- for the N, M, U series. And also how much did you sell for GOVA, this series. That is number one. Number two, the ASP in 3Q was down to RMB3,856 and compared with 2Q at RMB4,543. So I wonder what are the reasons behind that? That's number two. Number three, Q4, what's the plan for the store openings in Q4? Thank you. That's all my questions.

Hardy Zhang -- Chief Financial Officer

Sure. It's Hardy. Let me first answer your first two questions. So the mix between our product lines, as I mentioned, N and M, the top-end two series, they constitute around 35 of the total sales volume in the third quarter, and the GOVA accounted to around 5% of the total volume remaining 4% to 6% came from our U series. So this is a mix of the products in the second -- in the third quarter.

in terms of ASP, normally we encourage you to look at the year-over-year comparison instead of quarter-to-quarter comparison mainly because of the seasonality. If you look at ASP from last year, you'll see the similar trend, normally the third quarter has the lowest average ASP throughout the year. And the reason behind is, because the third quarter is the peak season for China sales, but the slowest season for overseas sales. Normally, the sales price of overseas products is more than double of the China sales price. So because of this mix of products, you'll see there is change in the ASP. So this is first reason, part of the seasonality. Second it's linked to your first question because of the change of the product mix. In last year, our top models N and M, they accounted for around 65% of the total sales volume in that quarter, but this year, that percentage has reduced to around 35%; that also has an impact on our average sales price. So that's the two key contributors for the lower ASP compared with the second quarter.

For the last question on the retail expansion for the fourth quarter, I would like Yan to comment on that.

Yan Li -- Chief Executive Officer

So obviously, the Q4 hasn't really ended yet. So we still have a number of stores actually in construction. And so, I don't -- I wouldn't be able to give the exact number by end of Q4, what number of stores we're going to have open. And I think there will be a combination of either some of the stores will get to open in December or some of the stores will get opened actually January next year. So basically, we're always looking at the Q4 this year and the Q1 next year are sort of the season we need to open stores. So obviously, some stores are shifted in Q4, some store may got shifted in Q1.

Tan Ho -- Guideline -- Analyst

Okay. Thank you.

Operator

[Operator Instructions] At this time, there are no further questions. I'd like to hand the call back to your speakers for any closing remarks.

Yan Li -- Chief Executive Officer

Thank you, operator. And thank you all for participating in today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

Jason Yang -- Investor Relations Manager

Yan Li -- Chief Executive Officer

Hardy Zhang -- Chief Financial Officer

Alex Potter -- Piper Jaffray -- Analyst

Bin Wang -- Credit Suisse -- Analyst

Tan Ho -- Guideline -- Analyst

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