While numbers can tell you a lot about things, it’s important to remember that great sales numbers don’t always equal great revenue. Now, not every story is as extreme as the creative triumph/total business failure of the original vinyl release of New Order’s “Blue Monday.” However, it’s still a cautionary tale that bears repeating—and it doesn’t matter if you’re selling music or motorbikes. 

Chinese electric scooter maker NIU just released its Q3 earnings report. While it’s doing quite well for itself, the numbers were still somewhat disappointing for investors. For the past few weeks, shares in NIU had been zooming ever upward, on the strength of the expected and impending good news. NIU’s sales figures in Q2 and moving into Q3 had so far recovered impressively in the wake of COVID-19 global disruptions. Things looked very rosy indeed ahead of the Q3 report’s release. 

On November 23, 2020, NIU released that report—and indeed, it showed a 67.9 percent increase in its total volume of e-scooter sales as compared to 2019. Revenues, likewise, are up 36.7 percent from 2019, according to the company. So what’s the problem? It may just be gross margin—which was only 20.9 percent in 2020, as compared with 22.2 percent in 2019. In other words, NIU might be selling greater numbers, but it isn’t making as much money per unit sold as it was in 2019. 

Following the Q3 earnings report’s release, NIU stock prices dropped by 12.5 percent, according to Investor’s Business Daily. Given the fact that October alone saw a boost in stock prices of 37 percent for the company, that number seems neither huge nor alarming—maybe more like an adjustment to fit the facts as investors now have them. In any case, as things currently stand, NIU says it expects Q4 2020 revenues to increase between 5 and 15 percent over the same period in 2019. 

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