Uxin Ltd (UXIN) 2025 Q2 法說會逐字稿

Good day, and welcome to the Uxin third-quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded.

大家好，歡迎參加優信 2024 年第三季財報電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to turn the conference over to Jack Wang. Please go ahead.

現在我想將會議交給傑克王。請繼續。

Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the third quarter ended September 30, 2024. On the call today with me, we have DK, our Founder and CEO, and John Lin, our CFO. DK will review business operations and company highlights, followed by John, who will discuss financials and guidance. They will both be available to answer your questions during the Q&A session that follows.

謝謝您，接線生。大家好。歡迎參加優信截至 2024 年 9 月 30 日的第三季財報電話會議。今天與我一起參加電話會議的還有我們的創辦人兼執行長 DK 和我們的財務長 John Lin。DK 將回顧業務營運和公司亮點，隨後 John 將討論財務和指導。他們將會在接下來的問答環節中回答您的問題。

Before we proceed, I would like to remind you that this call may contain forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC.

在我們繼續之前，我想提醒您，本次電話會議可能包含前瞻性陳述，這些陳述本質上受風險和不確定性的影響，可能導致實際結果與我們當前的預期不同。有關風險和不確定性的詳細討論，請參閱我們向美國證券交易委員會提交的文件。

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

現在，我將把電話轉給我們的執行長 DK。先生，請繼續。

(interpreted) Hello, everyone. Thank you for joining us today. I'm pleased to reconnect with you all on this call. Before we start, I'll be sharing our -- as before, we will be sharing our company's latest progress in both English and Chinese to accommodate our domestic and international investors.

（譯）大家好。感謝您今天加入我們。我很高興透過這通通話與大家重新取得聯繫。在我們開始之前，我將與大家分享——和以前一樣，我們將用英文和中文分享我們公司的最新進展，以滿足國內外投資者的需求。

We're excited to report another quarter of high-quality growth. From July to September 2024, our quarterly retail transaction volume reached 6,005 units, representing a sequential increase of 47% and a year-over-year growth of 163%. Our vehicle sales efficiency remains robust, with inventory turnover days maintained below 30 days, much lower than the Chinese industry average of 55 to 60 days. Our gross profit margin also expanded to 7%, marking a new high since we transitioned to our self-operated business. We anticipate that retail transaction volume in the next quarter will be 7,800 units to 8,100 units, representing a year-over-year increase of over 150%.

我們很高興地報告又一個季度的高品質成長。2024年7月至9月，我們的季度零售交易量達到6,005套，較上季成長47%，較去年同期成長163%。我們的汽車銷售效率保持強勁，庫存週轉天數維持在30天以下，遠低於中國產業55至60天的平均水準。毛利率亦擴大至7%，創下自營轉型以來的新高。我們預計下一季零售交易量將達到7,800套至8,100套，年增150%以上。

Customer satisfaction with purchasing vehicles from Uxin has remained at the highest level in the industry for 11 consecutive quarters with our Net Promoter Score rising to 66% this quarter. By leveraging advanced intelligent reconditioning factories to produce high-quality used cars, a comprehensive and reliable sales service system, and the application of full stack digital technology, our superstore model offers significant advantages over traditional car dealerships. The sales conversion rate of customers visiting our stores exceeds 40%. As our base of transacting customers continues to grow, our positive reputation is reaching potential customers more rapidly, further consolidating our competitive advantage in regional markets.

客戶對優信購車滿意度連續11季維持業界最高水平，本季淨推薦值上升至66%。透過利用先進的智慧修復工廠來生產高品質的二手車、完善可靠的銷售服務體係以及全端數位技術的應用，我們的超市模式與傳統汽車經銷商相比具有顯著優勢。到店顧客的銷售轉換率超過40%。隨著我們的交易客戶群不斷成長，我們的良好聲譽正在更快地傳達給潛在客戶，進一步鞏固我們在區域市場的競爭優勢。

Importantly, used cars transactions have traditionally been considered nonstandard processes. However, our efforts and achievements in standardizing the entire transaction process from inspection and reconditioning to sales, delivery, and after-sale services has been increasingly recognized by the industry. Earlier this month, we had -- we were honored to be named a corporate standard leader in China's used car industry by eight government ministries, including the State Administration for Market Regulation, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, and the People's Bank of China. We will continue to elevate our product and service centers, leading the high-quality development of China's used car industry.

重要的是，二手車交易傳統上被認為是非標準流程。然而，我們在標準化從檢驗、修復到銷售、交付和售後服務的整個交易流程方面所做的努力和取得的成果已越來越得到業界的認可。本月初，我們很榮幸被國家市場監督管理總局、國家發展和改革委員會、科技部、工業和資訊化部、財政部和中國人民銀行等八部委評為中國二手車行業企業標準領導者。我們將持續提升產品和服務中心，引領中國二手車產業高品質發展。

We are also actively executing various business initiatives. First, we are steadily increasing our inventory levels to meet the strong consumer demand for car purchases. At the same time, by leveraging the one-stop transaction service environment of our off-line spit stores, we are enhancing the penetration of value-added services to contribute more to our gross profit. Second, we're gradually supplementing and optimizing our superstore staffing to accommodate the demands of our expanding business scale. Additionally, as our existing customer base growth, we're further improving our service network by deploying additional maintenance service outlets in other areas of the cities where our superstores are located. This allows us to be physically closer to our customers, meeting their daily vehicle maintenance and servicing needs.

我們也正在積極執行各項業務計劃。首先，我們正在穩定增加庫存水平，以滿足消費者強勁的購車需求。同時，藉由線下便利商店的一站式交易服務環境，我們不斷提升加值服務的滲透率，為我們的毛利貢獻更多力量。第二，我們正在逐步補充和優化超市的人員配置，以適應我們不斷擴大的業務規模的需求。此外，隨著我們現有客戶群的成長，我們正在進一步完善我們的服務網絡，在我們超市所在城市的其他地區部署更多的維護服務網點。這使得我們在物理上更接近客戶，滿足他們的日常車輛維護和保養需求。

Driven by continuous sales growth, ongoing improvements in gross profit margin, and consistent expense optimization, we have achieved adjusted EBITDA profitability at the superstore level this quarter. We remain on track to achieve our goal of company-wide adjusted EBITDA profitability in the upcoming December quarter.

在銷售額持續成長、毛利率持續改善和費用持續優化的推動下，我們本季在超市層級實現了調整後 EBITDA 獲利。我們仍有望在即將到來的 12 月季度實現全公司調整後 EBITDA 盈利的目標。

Building on our proven superstore model, the expansion of our new superstores is progressing smoothly. Following our corporation agreement with the Zhengzhou Airport Economic Zone, we are pleased to announce that we have entered into another corporation agreement with the city of Wuhan. Wuhan is a major city in Central China with a population of 14 million and vehicle ownership of 4 million. Additionally, Wuhan has a well-developed automotive industry value chain that is known as China's Auto Valley, offering massive potential for business development. Our superstores in Zhengzhou and Wuhan are expected to commence operations next year. Furthermore, we are in discussions with several other cities. The expansion of new superstores will significantly enhance Uxin's market presence in new regions, driving future sales growth and financial performance.

基於我們成熟的超市模式，我們新超市的擴張正在順利進行中。繼與鄭州航空港經濟區簽署合作協議後，我們很高興地宣布，我們已與武漢市簽署另一項合作協議。武漢是中國中部的一個主要城市，人口1400萬，汽車保有量400萬。此外，武漢擁有完善的汽車產業價值鏈，被譽為“中國汽車谷”，具有巨大的商業發展潛力。我們位於鄭州和武漢的超市預計將於明年開始營業。此外，我們正在與其他幾個城市進行討論。新超市的擴張將顯著提升優信在新地區的市場佔有率，推動未來的銷售成長和財務表現。

And that concludes my remarks for today. And now I will let our CFO, John, to provide a closer look at our financials. John, please go ahead.

我今天的發言就到此結束。現在我將讓我們的財務長約翰仔細審查我們的財務狀況。約翰，請說。

(interpreted) Thank you, DK. Hello, everyone. We will deliver our remarks in both Chinese and English to communicate better with you. And first, I would like to note that to better align with the common practice in the investment community, we have adjusted our fiscal year this quarter. Our fiscal year now runs from January 1 to December 31 each year, instead of the previous period from April 1 to March 21.

（翻譯）謝謝你，DK。大家好。為了更好地與大家溝通，我們將以中英文發表演說。首先我想指出的是，為了更好地符合投資界的慣例，我們本季調整了財務年度。我們的財政年度現在從每年的 1 月 1 日至 12 月 31 日，而不是之前的 4 月 1 日至 3 月 21 日。

For the period from July to September 2024, which is now the third quarter of fiscal year 2024, we once again delivered very strong growth. Transaction volume increased significantly on top of last quarter's record high. Quarterly retail transaction volume reached 6,005 units, representing a sequential growth of 47% and a substantial year-over-year growth of 163%.

2024 年 7 月至 9 月期間，也就是 2024 財年第三季度，我們再次實現了強勁成長。交易量在上季度創下歷史新高的基礎上大幅增加。本季零售交易量達6,005套，較上季成長47%，較去年同期大幅成長163%。

This quarter, total retail vehicle sales revenue was RMB440 million, representing a sequential increase of 37% and a year-over-year increase of 79%. The average selling price of retail vehicles decreased from RMB109,000 in the same period last year to RMB74,000 this quarter. The strong increase in transaction volume had offset the impact of lower vehicle prices on overall revenue.

本季，零售汽車總銷售收入為人民幣4.40億元，較上季成長37%，較去年同期成長79%。零售汽車平均售價從去年同期的10.9萬元下降至本季的7.4萬元。交易量的強勁成長抵消了汽車價格下跌對整體收入的影響。

As for the wholesale segment, our third quarter wholesale transaction volume was 1,041 units, a sequential decrease of 31% and a year-over-year decrease of 3%, with total wholesale vehicle sales revenue of RMB37.8 million. Combining retail and wholesale, total revenues for the third quarter were RMB497 million, representing a sequential increase of 24% and a year-over-year increase of 40%.

批發業務方面，第三季批發交易量為1,041輛，較上季下降31%，較去年同期下降3%，汽車批發總收入為人民幣3,780萬元。第三季零售與批發總營收為人民幣4.97億元，較上一季成長24%，較去年同期成長40%。

And this quarter, our profit margin -- gross profit margin was 7%, an improvement from the previous quarter. Importantly, our gross margin is on an upward trend. And with the market recovering and higher penetration of value-added services, we anticipate significant room for further improvement.

本季度，我們的利潤率—毛利率為 7%，比上一季有所提高。重要的是，我們的毛利率呈上升趨勢。隨著市場復甦和加值服務滲透率的提高，我們預計還有很大的提升空間。

And while our performance and operational efficiency has improved substantially, we continue to enforce strict cost and expense control. This quarter, our adjusted EBITDA loss was RMB9.2 million, a reduction of 73% quarter-over-quarter and 80% reduction year-over-year.

雖然我們的業績和營運效率已大幅提高，但我們仍繼續實施嚴格的成本和費用控制。本季度，我們的調整後EBITDA虧損為人民幣920萬元，季減73％，年減80％。

Now, looking ahead to the fourth quarter of 2024, our retail transaction volume is expected to continue its growth trend, reaching 7,800 units to 8,100 units with total revenues projected to be between RMB560 million and RMB580 million. We also plan to achieve positive adjusted EBITDA for the company in the fourth quarter.

現在，展望 2024 年第四季度，我們的零售交易量預計將延續成長趨勢，達到 7,800 台至 8,100 台，總收入預計在人民幣 5.6 億元至 5.8 億元之間。我們也計劃在第四季為公司實現正的調整後EBITDA。

And that concludes our prepared remarks for today. Thank you, everyone. Operator, we are now ready to begin the Q&A session.

今天的準備好的發言到此結束。謝謝大家。接線員，我們現在可以開始問答環節。

(Operator Instructions) [Gary Vorsheck], Water Tower Research.

(操作員指示)[Gary Vorsheck]，水塔研究。

Hi, everyone. So we've seen that in previous years, China's used car transaction volumes grew by double digits annually. But now in recent months, the growth rate has significantly slowed, think the year-over-year growth is like around 5% from January to September. So could you share whether the development of China's used car market is slowing down or not, the reasons behind the trend and your outlook for the market's future?

大家好。所以我們看到前幾年中國二手車交易量每年都以兩位數的速度成長。但最近幾個月，成長明顯放緩，預計1-9月年增率約5%。那麼，您能否分享一下中國二手車市場的發展是否正在放緩，趨勢背後的原因以及您對市場未來的展望？

All right. Thanks, Gary. Let me translate that question first. (spoken in foreign language)

好的。謝謝，加里。讓我先翻譯一下這個問題。（用外語說）

(interpreted) Okay. Thanks for the question. Yes. Thanks for the questions. This is DK. And this year, we have observed a moderation in the growth rate for both the new and used car transactions in China. And specifically, the production and sales of new cars has increased by approximately 2% year-over-year, while used car transactions have grown by about 5%. The primary factors contributing to the slowdown included fluctuations in the economic environment, which has somewhat suppressed consumer demand for cars. And additionally, the used car market faced headwinds due to price reductions in new cars during the first half of the year, which impacted consumer sentiment towards purchasing used vehicles.

（翻譯）好的。謝謝你的提問。是的。感謝您的提問。這是DK。今年我們觀察到中國新車和二手車交易的成長率都有所放緩。其中，新車產銷年增2%左右，二手車交易成長5%左右。導致經濟放緩的主要因素包括經濟環境的波動，這在一定程度上抑制了消費者對汽車的需求。此外，上半年新車降價也對二手車市場帶來不利影響，影響了消費者購買二手車的情緒。

However, despite these short-term challenges, we remain highly confident in the long-term prospect of China's used car market. First, China's per capita car ownership is still less than one-third that of the United States and the overall car ownership in the country continues to rise. And second, the Chinese used car market is still in a very early stage of development. We expect it will maintain double-digit transaction volume growth in the coming years. In fact, since the second half of this year, we've already begun to see a rebound in used car transaction volumes.

不過，儘管有這些短期挑戰，我們仍然對中國二手車市場的長期前景充滿信心。第一，中國人均汽車保有量還不到美國的三分之一，全國汽車整體保有量還在持續上升。其次，中國二手車市場仍處於發展初期。我們預計未來幾年其交易量將維持兩位數的成長。事實上，從今年下半年以來，我們已經開始看到二手車交易量的反彈。

So for us, we've achieved around 150% year-over-year growth in retail transaction volume over the past few quarters. While our market share in the two cities where our current superstores are located has exceeded 15%, our nationwide market share remains relatively low because we are currently focusing on deepening our presence through our off-line superstore model in these cities. And this indicates a significant headroom for growth. In the coming years, we plan to open several new superstores every year, which will drive sustained growth in our sales volume. And we believe that our sales growth rate will significantly outpace that of the overall market.

因此對我們來說，過去幾季我們的零售交易量年增了約 150％。雖然我們在目前超市所在的兩個城市的市場份額已經超過15%，但我們在全國範圍內的市場份額仍然相對較低，因為我們目前專注於透過線下超市模式在這些城市深化業務。這顯示還有很大的成長空間。未來幾年，我們計劃每年開設幾家新的超市，這將推動我們的銷售額持續成長。我們相信我們的銷售成長率將大大超過整體市場。

And that's our answer to the question. Operator, we can move on to the next.

這就是我們對這個問題的回答。接線員，我們可以進行下一步了。

Okay. Thank you.

好的。謝謝。

Fei Dai, TF Securities.

戴飛，天風證券。

Hello, DK. (spoken in foreign language) It's encouraging to see the company expanding with new stores. Could you provide the timeline for the two new stores planned in Zhengzhou and Wuhan from construction to operating to achieving individual stores profitability? Also, what impact will this have on the company's financial performance in 2025? Thank you.

你好，DK。（外語）看到公司不斷開設新店，真是令人鼓舞。能否介紹一下鄭州和武漢規劃的兩家新店從興建到營運、再到單店獲利的時間表？另外，這會對公司2025年的財務表現產生什麼影響？謝謝。

(interpreted) Hi. This is John, and I will address your questions. Both of our new stores are progressing as planned. The Wuhan store is expected to open in the first half of 2025. Well, the Zhengzhou store is anticipated to open in the second half of 2025. And now, building on the experience of -- experience and refinements from our superstore models in Xi'an and Hefei, we are fully -- we've already fully validated this concept and accumulated valuable operational know-how. So as a result, we expect these new stores to reach breakeven within 6 to 12 months after opening.

（翻譯）嗨。我是約翰，我將回答您的問題。我們的兩家新店正在按計劃進行。武漢店預計於2025年上半年開幕。鄭州店預計2025年下半年開幕。現在，基於我們在西安和合肥的超市模式的經驗和改進，我們已經充分驗證了這個概念並累積了寶貴的營運知識。因此，我們預計這些新店開業後 6 到 12 個月內將達到收支平衡。

Regarding the impact on our financial performance, this will largely depend on the rollout schedule of the new locations. Prior to opening, we will need to invest operating capital primarily for purchasing equipment for reconditioning facilities and acquiring vehicles. This investment will be phased in gradually as our inventory levels grow. So the initial capital requirements for each new store won't be substantial.

至於對我們財務表現的影響，這在很大程度上取決於新地點的推出時間表。開業前，我們需要投入營運資金，主要用於購買修復設施的設備和車輛。隨著我們的庫存水準的成長，這項投資將逐步實施。因此，每家新店的初始資本要求不會很高。

We also anticipate a normal level of operating losses during the first six months after a store opens. But starting around the six months we expect the impact on our income statement to begin turning positive. So that's our answer to your first question.

我們也預計商店開業後的前六個月的營運虧損將處於正常水平。但我們預計從六個月左右開始對我們的損益表的影響將開始轉為正面。這是我們對您的第一個問題的回答。

(spoken in foreign language) Translate in English -- over the past few quarters, the company has consistently mentioned increasing inventory, with inventory assets growing by about 13% each quarter. I have two questions. The first is, from a market demand perspective, how do you plan for upper limit of inventory levels in different cities? The second is, will the 30-day turnover rate decrease as inventory increased? And how does the company plan to balance inventory levels and turnover decisions? Thank you.

（外語）翻譯成英文－過去幾個季度，公司不斷提到增加庫存，庫存資產每季成長約13%。我有兩個問題。第一從市場需求的角度，不同城市的庫存上限又是怎麼規劃的？第二，庫存增加，30天週轉率是否會下降？公司規劃如何平衡庫存水準和周轉決策？謝謝。

(interpreted) This is DK, and I will address that question. Our approach to planning inventory levels in different cities is closely tied to the local car ownership levels and our targeted market share in those regions. For example, in the city with approximately 500,000 registered vehicles and considering that new cars typically enter the used car market after about seven years, the annual used car transaction volume in the city will be around 70,000 units and this translates to approximately 4,000 units per month.

(翻譯) 這是 DK，我將回答這個問題。我們在不同城市規劃庫存水準的方法與當地的汽車擁有量和我們在這些地區的目標市場份額密切相關。以一個擁有約50萬輛註冊車輛的城市為例，考慮到新車一般在7年左右進入二手車市場，該市每年的二手車交易量將在7萬輛左右，相當於每月4000輛左右。

In our existing markets like Xi'an and Hefei, we have achieved a market share exceeding 15% with an ultimate goal of surprising 20%. To put this into perspective and also to highlight our competitive advantage and effective business model, the leading used car companies in the US generally attain around a 3% market share only. So based on these metrics, in cities with 500,000 vehicles capturing 20% of the monthly used car transaction, which will be around 1,200 units, supports the operation of a superstore with an inventory capacity of approximately 1,000 cars.

在現有的西安、合肥等市場，我們的市佔率已經超過15%，最終的目標是達到驚人的20%。為了更清楚地說明這一點，也為了突顯我們的競爭優勢和有效的商業模式，美國領先的二手車公司通常只獲得約 3% 的市場份額。因此基於這些指標，在擁有 50 萬輛汽車的城市，每月二手車交易量的 20%（約 1,200 輛）可支援庫存容量約為 1,000 輛的超市的營運。

In larger cities, such as Zhengzhou and Wuhan, where car ownership is around 5 million, our superstores can effectively manage inventory capacities of around 10,000 cars. So when entering a new city, we first established an inventory plan that aligns with the city's car ownership levels and our market share objectives. We then progressively scale our inventory in line with sales growth which helps us enhance market penetration while efficiently managing resources.

在鄭州和武漢等較大的城市，汽車保有量約為500萬輛，我們的超市可以有效管理約10,000輛汽車的庫存容量。因此，當進入新城市時，我們首先制定與該城市汽車擁有量水準和我們的市場份額目標相符的庫存計劃。然後，我們根據銷售成長逐步擴大庫存，這有助於我們提高市場滲透率，同時有效管理資源。

Since March of this year, we have been steadily increasing our inventory levels. By the end of September, our inventory was approximately double that of March end levels. Notably, our monthly sales have more than doubled during the same period, meaning sales growth has outpaced inventory growth. So we've actually achieved an acceleration in inventory turnover rather than a decrease.

自今年三月以來，我們一直在穩步增加庫存水準。截至九月底，我們的庫存大約是三月底水準的兩倍。值得注意的是，我們的月銷售額在同一時期增加了一倍多，這意味著銷售額的成長速度超過了庫存的成長速度。因此我們實際上實現了庫存週轉率的加速而不是下降。

This is due to several factors. First, the market has been recovering with strong demand driving higher growth -- higher sales volumes. And second, we -- as we expand our scale, consumers benefit from a wider selection of vehicles available in our superstores. The increase of variety enhances our brand attractiveness, effectively making our stores the preferred destination for used car purchases. So as a result, more customers are drawn to our brand, improving sales efficiency.

這是由多種因素造成的。首先，市場正在復甦，強勁的需求推動了更高的成長——更高的銷售量。其次，隨著我們規模的擴大，消費者可以從我們超市中更廣泛的車輛選擇中受益。品種的增加增強了我們的品牌吸引力，有效地使我們的商店成為二手車購買的首選目的地。因此，我們的品牌吸引了更多的客戶，並提高了銷售效率。

Currently, the inventory levels at our two existing superstores have not yet reached their planned limits. So we aim to maintain an inventory turnover rate for around 30 days, even as we continue to increase inventory. And that's how we answer to your second.

目前，我們現有的兩家超市的庫存水準尚未達到計劃的極限。因此，即使我們繼續增加庫存，我們仍旨在將庫存週轉率維持在30天左右。這就是我們對您的第二個問題的回答。

Xie xie.

謝謝。

This concludes our question-and-answer session. I would like to turn the conference back over to the company for any closing remarks.

我們的問答環節到此結束。我希望將會議交還給公司，以便大家做最後總結。

All right. Thank you again for joining today's call and for your continued support in Uxin. We look forward to speaking with you next quarter. Thank you.

好的。再次感謝您參加今天的電話會議並感謝您對優信的持續支持。我們期待下個季度與您交談。謝謝。

Xie xie. Thank you.

謝謝。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助此活動的公司提供。