Uxin Limited (UXIN) 30 Dec 222023 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to Uxin's Conference Call for the Quarter Ended September 30th 2022. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded.

objections, disconnect any this have you you at may time. If

ahead, call like Mr. your go to now over Jack turn Please call, I'd conference the to today's host Wang. Jack. for

everyone. Welcome thank for quarter September ended operator. Hi, XXXX. to the you, XX, earnings conference Uxin's call Hello,

and Founder followed discuss D.K. On business will with our operations we They by John will and guidance. and have today, call CEO; be financials the Lin, answer highlights, John, both review our who questions the your D.K., follows. Q&A company available me and will our CFO. that session to during

actual I proceed, to current our are we call subject differ may remind forward-looking expectations. would Before cause you inherently that uncertainties this results like to and to from which statements risks contain may that

SEC. discussions refer and of with risks our filings the detailed uncertainties, to For please the

that, Now D.K. sir. go ahead, I the our to turn CEO, with call Please will over

[Foreign Language]

our pleasure [Interpreted] call a Hello, everyone. today. It's you to earnings conference join have

of business progress For the English our will both both I investors, convenience Chinese. and in review international and domestic

on our prospects. today, this business review business thoughts highlights and past During recent will quarter and our our I the of then call share progress major long-term

market. quarter Our a rather of difficult ended X,XXX, retail representing year-over-year. has been volume almost XXX% XXXX car of in an XX% XX, year XXXX fiscal second China's transaction year which increase September XXXX, the on reached quarter-over-quarter used and for

disrupted business students and constantly and the Specifically, spending. economic college activities decelerated activities customer

the Despite those model challenges, to This we year-over-year, business China's resilience business car in deliver a demonstrates industry-wide transactions channel car quarter September, years. we vitality fell the our X% facing in was seen significant used result, of which IRC-based built. used and and have continued growth. between omni and July the macro rarely As past

in end of of Hefei reputation we growth. last its customer the top launched superstore success the levels less Since market resounding our we than in brand transaction our in have and a achieved rapid volume, also at our growth year. regional On satisfaction continued year, Hefei’s

share in as brand most cities. has and to as XX% car in Hefei, expected its further, market the Our close monitored surrounding to Hefei from while buyers increase well is used our occupied is

net NPS the top from came by at than of was or customers. promoter quarter Our quarter, the XX% existing score maintaining in industry. transactions past XX the in the of More referrals

results. At time, the ongoing same efficiency efforts improving yield continued in our operation to

quality have our sourcing and worked the superstores, and vehicle in we our car IRCs particularly well, On acquisition unrivaled fairly supplies. turnovers. our our sales we where XX% operation September, from to channels them capabilities acquire our front, came established Xi'an used turn Close Hefei, high for to car car sales. continue In and in to accelerated individual further accelerate of we acquisitions customers. listing used refinements between process vehicle These acquisitions

Although severe have our level November, October operating the metric our continue XXXX. we experienced COVID of operations and and returned induced expect September throughout in to we improving disruptions to

achieved. we to another excited I'm Today, milestone have share key

floor ensure to of the offer upgrade in and and vehicles scale largest As location and we square upgrade at we market large supply new for XXX area IRC superstore expanded to previously better the its The an completed Xi'an IRC as Northwest car the selection vehicles showroom XX,XXX to we used extensive factory, techniques, a XXX,XXX reconditioning is warehouse superstore cars. The used city that superstore. cars units marketplace of upgraded opened style annual the December reconditioning as the super by superstore used Uxin fulfill leading an meters last well a surrounding capacity used China. warehouse to The and for car expanded now areas. industry of to self-owned from Powered relocation of business (ph) [ROC] the as have in XXXX, week in a has power reconditioning announced fully our total used IRC's has equipment and and of the in quality of comprised advanced to cars factory high capacity customers. X,XXX demand

In addition, integrated the a in service houses the of center and IRC brought on-site. vehicle branch administration office customer office

comprehensive As base warranty, and one-stop car the used auto and as to buying experience. they such, for title customers expanded purchase from upgrade, as transfer can their insurance, same services have financing, access registration accessories vehicles well a efficient

benchmarked empowerment. retail of philosophy new industry Uxin’s business car of through and driving used new The advanced that Xi’an digital IRCs experience China's manufacturing, representation of the transformation

advanced As and we high cars cars create used process a chain for opportunities more can solid product. ensure we our capabilities, as reconditioning of supply used value quality with empower equipment, and technology supply

production reduce factory, the the mass reconditioning in our we over process own can significantly the have we With driven and control conducted IRC manufacturing by economy scale. refined of costs

cars, and superstore used brand made comprehensive top environment, for our mass and shopping store consumers cars. superior fee a Our used services a selection of for massive

Our high traditional quality advantages are and used key the buying car competitive our market. used car experience offerings car used over one-stop

When digitized processes, intelligent system been significantly we to standardized improved standardize a we processes and leveraged we inspection, to business. entered the car digitized used operating long data systems from technologies, and sales business management such processes which this over categories, traditional and our exhibition efficiency our and XX-years had build our reconditioning industry with in spent systems non-standard digital and to

in constitute to businesses apart the unique us at used larger manage a used car advantages scale from car highly technology fragmented small super our capability China, setting Our dealers.

in used as industry. the business the of complete car model the have developed, We confidence as we well prospects future in

used the has a China's forward restrictions. begun measures look control XXXX, stringent October revolutionary November. opportunity and in as COVID in are We market. COVID in in invoicing China easing a car economy We to rebound We massive experienced Chinese

stage. and IRC regulators next will network, brand enable nation, original used China's continue we industry of well product our our for development the equity, policies service into driving business will As to capabilities footprint further boosting carry to efforts implement us transformation strong as more industry through continue the across as leading car our expanding out the

the with the like And call to results. to to turn CFO, John I'd please. you our financial that, John, Please through turn. walk over

[Foreign Language]

you, everyone, [Interpreted] hello, our call. both since attending and D.K., have investors we and domestic foreign Thank

Chinese be remarks and for convenience. everyone's in delivered will Our both English

Now I of XXXX. will provide three a closer second year XX, is which quarter our fiscal the September look at results the from XXXX, months ended financial

maintained car major robust industry in we While retail faced momentum China's growth the used business. quarter, our in still challenges

average transaction ASP in decreased the this we structure, quarter, as RMBXXX,XXX the a quarter same by to Our price from year-over-year quarter. and grew RMBXXX At X,XXX impressive further selling XXX% previous this or retail RMBXXX,XXX quarter-over-quarter time our inventory volume our reach an to quarter. XX% this optimize

year-over-year. and sequentially Retail vehicle RMBXXX totaled revenue up million, sales X% XX%

We completed ASP expect and our major RMBXXX,XXX and have retail stabilize will restructuring that RMBXXX,XXX. inventory between

reconditioning as the In retail a inspection contribution to capacity wholesale we showrooms, the sales for as retail vehicles retail had portion addition, for channels. sold quarters with the higher sell well six through in Vehicles first used continuous higher expect our were of and improvements and we capabilities, car through we in exceeded quarters. in our able coming past acquired our time

quarter. was volume quarter to this essentially Wholesale previous RMBX,XXX the compared transaction flat,

the standards. our quarter, vehicles to we retail increasing of meet During number reconditioned acquired an

quarter were million, previous sales quarter. quarter revenue XX%, ASP RMBXXX second Wholesale previous through also to retail, the the compared vehicles As vehicle more in the vehicles RMBXX,XXX the for was declined to quarter. of RMBXXX,XXX this wholesale down sold from

XX% growth contributed Our wholesale Retail to retail as percentage relatively vehicle total in compared revenues and quarter quarter revenue year-over-year. stable, this both the XX% for revenues sales RMBXXX continuous total the and this including of ahead. expect up remained quarters previous to we and our

margin from in the for was up X.X%, Gross X.X% quarter the quarter. previous slightly

September. inventories. we and we some accelerated high also optimized our of our gross percentage -- During various impairment proactive gross These hindered our pricing expansion actions turnover priced our strategies recorded vehicles the at the Meanwhile, and margin a level. structure our price market July margin slowdown, between capped through of low on a inventory and

various the regions are market. the peak. infection stringent relaxed in the changes and during sweeping domestic on their the impacts rates of measures used November, approaching Chinese had in December COVID Following substantial control and the have China many control These October car

our with starting year improving continue to pleased various after to metrics passes December a previous seen. Moreover, to COVID to sales that the market to gross return calendar level rapidly we in has the return XXXX. peak rebounded However, operating of infection reasonable ahead have highs we margin performance our in the see initial we're expect to

to previous the were expenses for quarter. the operating flat, basically Total compared quarter

business a cost and reduction we improvement stage operations to committed initiatives our daily optimal currently growth, implementing expansion in are of remain at we business into While efficiency ROI. for rapid

upgrade IRC milestone the of major earlier, completion Xi’an mentioned for D.K. As was us. a our

or enable operating on superstore Xi’an and in cost the expect operated combined enable will accelerated our Xi’an XX-months. our will profit single surrounding We growth within to continued positive generate optimization with sales basis that its store areas us a to

Our published I were here. earnings not quarter loss numbers by in RMBX.X online, operations our this financial the statements RMBXX.X continuing non-GAAP the will adjusted last approximately to from from The million quarter. increased detailed release so million repeat

U.S. share transaction. However, signed This to changes our the financing due non-cash resulted is fair end change XXXX. related quarter fair last based the to and and our operations. price on in the RMBXX.X a million, reflect between not financial quarter end same in as related GAAP does our treatment financing loss value the of the a loss before, I to warrants this we of agreement The of in of value explain impact business will

outbreaks momentum. and Xi'an lockdowns, in other started peak and measures levels. the December, on in and growth COVID Xi’an, estimated infections our to control guidance largely After our next impacted which located and October moving for are cities both reaching our citywide Hefei, in China intense COVID sales are in lifting quarter, Now Hefei November where during many restrictions resulted IRCs

through been consumption market transaction has has September December our level. recover, volume retail rebounded Although slow to

is slightly December on XXXX. expect of our which to total month the fiscal impacts, quarter three we transaction volume year XXXX, ending decline Based these in XX, the third

to around the ASP be a expected for growth, volume is to Our retail expected retail transaction year-over-year is RMBXXX,XXX. units, representing be around X,XXX while vehicles XX%

We value-added to around vehicle vehicle our our units estimate this sales business also million with revenue, the retail and total RMBXXX high X,XXX including of its wholesale to trajectory expect in Year. million. will recover, we to and RMBXX,XXX. cycle be Once in We believe that be peak volume return revenues, that revenue to economy transaction wholesale revenue service New of begins sales the RMBXXX expected be to around infection quality range growth coming COVID the passes, the to ASP our

now remarks Operator, our And ready for questions. are that concludes prepared we today.

you. Thank

[Operator English. now please in first on in everyone question Chinese Research. begin of from question-and-answer Zacks Instructions] the benefit Kerr then question today's call, Please at will for Instructions] And first today's Tom ahead. And comes your the repeat We Investment and session. [Operator ask it go

it the Can more words the other in purchasing, you it details part Thank purchasing provide Hello. online of And on the affected you. disruptions? how business? did consumer improve COVID

Tom. Thanks, Alright.

translate Let that [Foreign me Language] question first.

Okay. [Foreign Thank Tom Language] you,

consumption. had car [Interpreted] used significant So on COVID a definitely impact

[Foreign Language]

impact has near-term on willingness demand car for COVID's economy [Interpreted] the purchases. consumers’ affected and

During off-line logistics stringent measures, also delivery, and disrupted. constantly were containment operations

complete no consumers to purchases. way So their had

infection Now COVID after many are are with first their at home that we lifted, in-customers so were COVID at staying the infections. the restrictions of dealing the peak cycle

[Foreign Language]

from So where Xi'an July than COVID we growth in controls such challenging sales. ability located. our between tripled perspective, proud our in a Hefei to obviously environment. And impacted of and business our and and more transaction disruption city our retail our impressive that's volume certainly October But are experienced this lockdowns deliver in are where November, [Interpreted] IRCs September, and and we

our of of ahead started sales China performance December, our many has as metrics weeks as control have our of the recovered previous easing recent couple operating exceeded However, measures COVID in market, highs. in

Language] [Foreign

already recovery, a relaxed believe passes, seen about market the XXXX. strong measures, market why are we excited will that's Once Since COVID control China we [Interpreted] have entire peak rebound. see that the we opportunities in strong the car a used

question. next. Tom's on move to that's to Operator, answer the And the let's

Absolutely.

ahead. Our with next Securities. [indiscernible] from comes China go question today Please

cars X,XXX impact in COVID demand following restrictions? used company's transactions? the from speak of units will in superstore storage supply sufficient of used on is I from XXX English. Now our Xi’an capacity will the What for the of customer Language] the current the perspective [Foreign the to the easing of upgrade units and improve increase Is car

Language] [Foreign

[Interpreted] All [indiscernible]. right. you, Thank

to units address few question Xi'an your me about X,XXX XXX showroom our expanding superstore Let from aspects. a units, capacity

First used showroom longer customers of capacity no was the demand Xi'an. all, to car enough our previous for meet XXX in our

[Foreign Language]

in us which decided we of expand So scale [Interpreted] benefits to multiple our the areas. superstore,

Language] [Foreign

used car wider value improvements and largest with store [Interpreted] region, the a our shopping strengthened fuel experience. business vehicle continue superstore in These further our to our larger growth. The will better time selection, which marketplace which our China's in made market market our enhances expansion scale share the and customers also Northwest position to region, propositions in

we for As our created additional future such, headroom sales growth. sustainable

Language] [Foreign

expand didn't superstore. have costs. reconditioning Additionally, the just developed an control car also style combines to our a upgrade our This better our and Xi'an the model scale, enabled us [Interpreted] over offerings further car innovative superstore that warehouse refine factory and used combination advanced quality of used our we

[Foreign Language]

the [Interpreted] well in as demand market Currently, as our adjacent fulfilled Xi'an, Xi’an superstore has cities.

cars believe X,XXX we of our that current is sufficient. used So showroom capacity

different the flexibility regions. our by sales to omnichannel supplies adjust balance in an the to have We network powered demand IRCs, inventory we and our have

[Foreign Language]

growth to market expansion also will we strategic and business and forward, Going conditions inventory plans. our for develop new on IRCs based [Interpreted] continue

current [Foreign competitive comments growth you. dynamics, policy including landscape, size, Language] management's car Can potentials on directions? market used and market Thank the

Language] [Foreign

of down into So I'll [Interpreted] break our aspects well. market two as the view

For need in the vehicle road at terms will through size right point market go market, of on to of auto secondary already is All vehicles circulation. the now the these the ownership. market world's China some largest

As ownership, XX our as year same next a to market of on U.S. few will from China's the at XX right million now per per car about car based expand transaction result, believe the transactions current scale million in in we the years used level year. that

Language] [Foreign

business. dealers the dominate but of branded market. towards small transaction will relatively where and car some front, believe competition some We out operations, transit that the still of the fragmented, of them market On small will is landscape [Interpreted] dealers gradually standardized current the run

that production in an we We advantages quality, improved model current market provide stronger innovative the vehicle higher shopping we we capabilities digital competitive aspects. with as in transformation, our and the and have have all in Through believe developed experience. a customers significant landscape, business more new

Language] [Foreign

[Interpreted] In a share garnered year the within gain improvement, terms have superstore of operation. has market we to have the about we growth potential, market for headroom still and a share about of in proved Hefei further that future. we lot our expect XX% in of already XX% of Hefei in Moreover, Hefei

success believe in counterparts in growth single our and than Importantly, that Uxin in formula enable has higher major will us to in replicate nationwide, potential a U.S. we other market our China the cities the

Language] [Foreign

I briefly some [Interpreted] the summarize of will key policies. also

is government strengthening dealership encouraging while unlawful complying First, oversight over clearly the operations, practices.

year, that new compliant two the So in businesses less and a for than example, regulations trade were require grow. industry restriction a illegitimate each individual can cars healthier the unregulated thus in creating will market the before, to only this largely that policy standardizing and eliminate used for environment operations

[Foreign Language]

registrations At the vehicle enabled further tax expand transaction also reform access [Interpreted] car system and of business Moreover, our online of complexity time, the the the reduced title cars used also to and reduced operations. improve of vehicle our significantly of and transfers efficiencies. also electronic implementation to profiles the used the cost same us

Language] [Foreign

overall, China to of a the has number industry been policies. So The will support definitely has improved regulatory industry large overall [Interpreted] boosting continue improve environment. and implementing

[Foreign Language]

[Interpreted] answer Thank -- you, our answer Alright. our to right. That's to that's China all Securities.

you. Thank

Thank ahead. our And from TF Securities. Fei Dai question comes go you. today Please with next

[Foreign Language]

Fai Hey, Dai.

by grew second by XX% in what's dropped on while Language] you in challenging Thank transaction industry English. Can growth quarter, total the transaction your market? behind in [Foreign saw question volume your a translate my elaborate We I'll the you. X%.

Language] [Foreign

many like The you Fei. used and car July experienced September. Sure, during like industries and other Dai headwinds said, industry, [Interpreted]

volume, achieve retail year-over-year year-over-year a over our of difficult particularly in seeing market recorded volume such for industry the XXX% transaction to decline a it under growth us was conditions. As transaction in rarely

transaction In growth, addition satisfaction to to our continued improve. customer level also

[Foreign Language]

was entire the This of team. made possible the [Interpreted] by execution efforts Uxin

Our the resilience complete model achievements Compared vitality has traditional model the our we advantages. demonstrated and the business also used dealerships, of built. car to the

Language] [Foreign

advanced is to our our reconditioning first The capabilities factory processes ahead develop [Interpreted] dealers. car the used offerings advanced equipment line traditional -- utilized far product management product our car vehicles. reconditioning our and we assembly to recondition We that leverage

supply we on a environment. customers advanced in market a cars factory stable is that reconditioning used used And choose a ensures us high-quality high-quality of Our that have scale. an important cars large challenging reason

[Foreign Language]

second new have The a [Interpreted] innovative very retail we developed purchases. is that for used car experience

Our fully IKEA Club modern superstore used our self-owned the after-sales superstore vehicle or in POSCO more used terms service experience services. longer no process, a buying [SAMS] and market, like selection, is car is a far (ph) traditional superior, going purchase compared car to In farmers’ a or supermarket. going but to to market like of

can starting the choosing from services and sale accessing a experience store. enjoy in the one-stop car, customers a titles after Our transferring the

We local become market consumers or in have east we enter, regional every car whether Xi'an for landmark [mystery] a it's (ph) Hefei.

[Foreign Language]

we have industry, car technologies our enabling industry. process we thirdly, select used dynamically the market better us And better digitize [Interpreted] XX-years in With the we to best operations can can development database on changes. entire customers used our car our adjust better allows the digital based of so market the customers, management we in developed so our and and China's Uxin's us offerings. understand of to of understand the Digitization the needs

market pricing acquisition intelligent user of to such also changes, can system and as channels. us Our inventory structure dynamically optimize through our enables precision better improve prices efforts on we adjust based different our

of super manage our execute operations business, digital systems and a our car to creating unique to at leverage better scale. our also management large used thus We analysis capability

Language] [Foreign

the I'm and a the passes and fully industry -- to COVID China's recover, our how We And doing. more high business and industry in will in growth as we under we stage model, to much challenging the more growth hope to a our to managed a And we deliver through of car confident, quality [Interpreted] drive to development whole starts drive hope upgrade -- what we're XXXX. that's used environment. market as sustain

[Foreign Language]

[Interpreted] And that's we TF how answer Securities questions. to

Ladies session. to back over concludes to Jack I'd you. conference this question-and-answer our remarks. and for like Thank turn the gentlemen, closing Wang

our Alright. We to all look soon continued the Thank Happy your day, and you ahead. support speaking We you, nice you everyone, to in again, forward and today future. a in call wish again for joining Uxin. Year New for

thank today's conference attending Thank this you. concludes for you and We gentlemen, all Ladies call. today's presentation.

may You have day. a lines, your now disconnect wonderful and