Q4 2019 Earnings Call

[music].

Ladies and gentlemen, thank you for standing by welcome to use shins fourth quarter and full year 2019 earnings conference call.

This time all participants are in listen only mode. After managements prepared remarks, there will be a question answer session to these conference calls being recorded if you have any objections you may disconnect at this time.

Through the coal over to Nancy song Investor Relations director of fusion.

Please go ahead.

Thank you operator, Hello, everyone welcome UK fourth quarter and weird nice earlier.

On the call today, I became founder and CEO I'm getting to know our Seattle became will reveal business operations and the company highlights followed by Dan who will discuss our name on the guidance. They were both be available to answer your question during the second vessel.

Before we start I would like to remain you got this call may contain forward looking statements made under the safe Harbor provision of U.S. Private Securities Litigation Reform Act of 1995. These statements made based on managements current knowledge and assumptions about filtering done nothing we've all known or unknown.

One risks and uncertainties, which could cause actual results could differ materially from those in the forward looking statement looking does not undertake any obligation to update any forward looking statements, except as required under applicable law for more information about the potential risks and uncertainties. Please refer to.

Through the Companys side is that we've actually seen we've not I will now turn the call over two hours the old became goal happy.

Thank you know.

Hello, everyone. Thank you for drilling over fourth quarter in full year 2019 earnings conference.

We are pleased to to finish off the year on surgical defaulted in them.

Please refer to see revenue increased by 65% to RMB 380 meeting.

Quarter, not only do we record over 28300 only use countries actions during the quarter, but are we also increased the opportunity to see to create the to 11.7% Ritchie <unk> prevalent per unit revenue of over RMB. So 2700.

2019.

Marketing and important the milestone for use as a way shape or other securities focus to to see online transactions.

Alter the year, we continue to improve our platforms by optimizing production and say this offering.

Thank you service quality and extending our fulfillment capabilities and infrastructure.

What I encourage all of the most is that we helped over 97000 consumers by their car off choose online without the need to read it a dealership in person.

It is truly differentiated and the innovation car buying experience for the every consumer.

In China, when compared with the traditional wave of spending weeks or even moms visiting several dealerships to Fender the idea.

We as a national wide online selection of use package and 35 used car, we help customers conveniently buying a car that you might not be April.

Available in their local market and enable them to send a better deals across the country by simplifying.

Comparing each car surprise to performance.

Coupled with the professional service than the convenience, we deliver our business model offers consumer a unique value proposition that to reinforce our competitive position in the market and an increase barriers to entry.

This will help.

Generate to long term sustainable growth going forward.

We are now currently focused on our toothy online transaction business.

I received from the loan facility occasion surveys car and the to be business will allow us to devote all our attention and a resource toward developing and getting hot our to see online business.

Additional the diversity of our loan facilitation business enables us to drive for the girls resolved to incurring additional currency obligations on credit risk starting from November 2019. This will please.

A much stronger routine for the next to stage of our development.

As we move further into 2020.

We are keenly aware of the challenger created by both the softening macro environment and.

Volatility created by the Corona virus outbreak.

Trying to us new car industry has been severally impacted either by the.

Tend to make raisin disruption taken place across the industry is infrastructure and the for pension.

During the first quarter, we saw considerable batteries to the used car patronise process, and though fulfillment due to an fulfillment to.

For bring them to do to people reinforce from offline activities.

Temporarily closed to local used car market and the dealerships.

And the charting the new car logistic and the title transfer.

As a result to other business operations during the fourth quarter. We also severly disrupted well the used car industry has been recovering steadily in recent weeks and the overall operations gradually returning to normal it's a real take sometime before the market a completely.

That is to the overall impact.

We live in mining, we expect to the outbreak who will continue to weighed on our results for the second quarter.

That said, we believe the outbreak present just to add many opportunities as they took the challenging and the remaining competency our ability to say is the long term growth opportunities in China used car market.

Are you use come online continues to turn to upward in China sense were launch over to see only used car transaction services in earlier 2018.

We have been dedicated to transforming the entire buying process and their transaction online each step in the sales process.

The Ulta break it actually.

Accelerating our online initiated as offline activities, we many significantly.

Constituted the constrained.

He responds to the situation, we immediately impediment to stage two adult other business service model upgrade the end or cost of structure optimization.

On the service model front, we upgrade our products standardized space and.

Transform the way consumer serve the end of procedures a goes through to complete our per tries to facilitate the the customers self-help online buying experiments.

With that all assigning.

Sales consultants to assist the in an offline in prisons moatize once a customer.

Thomas Teekay to their intention to cutters online.

We have no offerings online sales consulting and assistant and services going forward customers.

We will be empowered to two compared to the Petronas entirely online all by themself, including many about and selecting the car leasing opinions and they're bidding opportunities related to document [noise].

During the entire buying process our online consultant there are always available to address.

Any leases out to consumer me have in order to facilitate a things online transaction.

As a result, the service model for online consulting and assistance.

We will simplify the protests of serving.

Clearly the customers.

The increase stylist productivity and.

Even truly enable us to significantly.

Reduces fell for headcount.

On the comp the structure front.

Responds to outbreak of Corona wireless we immediately in time into the temporary workload to base.

They did nothing program companywide too for up to fortify our cash flow and.

Financial position by bringing bye.

Three new cough and the expenses under carefully controlled.

More important we've optimized our cost structure. According to our current to service model on top of the reducing south expense by simplifying the buying and selling process. We are also streamlined the corresponding cooperate to management infrastructure end the process.

All this adjustment to not only enable us to reduce cost and expense for better unit economics, but also a loss to improve overall appreciate deficiency.

As the impact to all our debris could be two feet. We believe the used car market will gradually.

Both the back into the in coming quarters.

10 days, there by People's growing prefer is.

For owning their own car and pent up demand for used car, though even.

The cars the outbreak has accrete created.

We upgrade data service model and optimize cost structure already in place, we will benefit from order growth opportunities once the market to rebalance.

With our focus squarely on becoming a one stop online presentation.

For buying used car, we are confident until we will be able to further.

Solid defy our market leading position as a national wide online used car dealer and.

Creating long term value for our shareholder.

Before I turn to turn the call to build for our financial details.

I want to extend our deepest.

Synthesis to all those who face to end the continue to face extremely difficult as a result to all of the current virus outbreak.

Loan to also Experis Express our.

I agree.

Rob could you choose those clean.

Fall to end the continuing to five to on the front line to.

Completes the.

DCC. Thank you.

We've not I'd like to turn the call over to our CFO to walk you through the financial result functions.

Okay. Thanks, Okay, Hello, everyone. Thanks for joining us today.

Our house decommission have already however, we are pleased to see our continuing business generally with solid and consistent top line grows and the gross margin improvements throughout 2910.

If I felt we are account loss from the a guarantee level of these and the provision for credit losses, which are primarily associated with our historical financial assets.

Over other adjusted loss from continuing operations continue to narrow for the fourth consecutive quarter of RMB.

135 million in the fourth quarter off 29.

As we continue developing over to see online used car transaction business with the off incurring additional credit risk going forward. As a result also divestiture of our loan with an Asian business. We have also keeping axes measures to assess and the manager the impact.

From the guarantee that obligations associated with our historical loan data, we are knowledge transfer to the Golden Pizza.

[noise] in the fourth quarter off the last year, a serious offered regulations in relation to lending in the.

Data collection, including the productivity Sharon Rx trained staff collection practices.

We're joined late you should allow the relevant authorities.

This adversely affected the delinquency rate as well as the collection in the repossession rates in the connection with our historical loans.

Absolutely evaluating the loan performance, we made a significant the provision for credit losses, and the incurred additional loss from a guaranteed our bookings with fourth quarter.

Moving into the first quarter of 2020 in response to the new accounting standard for credit losses effect on general refers to 2020 and the ought to break off a core and of course, we have fully review the quality of our historical financial assets again and their carefully assess otherwise.

Elements impacts.

As a result, a significant provision for credit losses in the loss from guarantees are below these.

We'll be provided for first quarter of 2020.

What do we believe the impact of from the fluctuation on asset quality on our further cash flow will be eliminated with careful control and a proper solution already in place to manage the guarantee obligations associated.

With this portion of loans.

End of the current arrangement with our financing partners. We believe the cash flow for buying back further defaulted loans as a result out of our historical guarantee obligation will be carefully controlled outer limits in level going forward.

Looking ahead.

SDK just mentioned.

The transformation of our service model will help us effectively reduce corresponding cost and expenses and improve operational efficiency.

Addition to reducing sales headcount by providing online consulting and assistance services. We're also able to reduce the inspection relate to the cost of by focusing on selecting and inspecting higher priced to performance used car based on Oliver accumulated to the experience and knowledge.

In the inventory.

Benefiting from the streamlined cooperation management structure and the process, we are able to bring our headquarter relatively expensive and optimize the in an efficient level.

In addition, our cash position will be strengthened in the coming holders as our result off our recent the divestiture and sufficient to support our business development in next the 12 month.

This will provide us a greater flexibility to investing all the further January long term sustainable growth.

Now, let me walk you through our financial details with for fourth quarter and a full year from uniting. Please note that the results I will discuss related to continuing operations only on numbers Arrium RMB unless otherwise stated also please note that some numbers I refer to our long.

GAAP numbers, you can find that reconsolidation of this numbers at the bottom off of our earnings release.

In the fourth quarter total revenue increased by 61% to RMB 456 million from RMB 289 million in the same period last year. The increase was primarily due to the infosys into see transaction volume GMB Commission rates and of the take rate.

Our total too few revenue was RMB 388 million up to 65% year over year from RMB 236 million in the same period last year.

Oh, I, just heard transactional volume increased by 26% year over year to.

28302 units.

And it is corresponding GMB increased by 32% year over year to RMB 3000 380 million.

Looking at two revenue streams of our to see business.

Commission revenue was RMB 207 units all six 9% from RMB 123 million in the same period last year.

Primarily due to the increase in the transaction volumes Dnbi and commission rates.

The unique value proposition, we are now able to offer consumer along with the improved user experience and the higher pricing. However.

Resulted in the commission rate expanding to 6.3% from 4.9% in the same period last year.

Value added service revenue.

Was RMB 180 million up to 60% from RMB 113 million in the same period last year.

Primarily due to the increases in the transaction volume GMB and the we have take rate.

We have take rate increased to 5.5% in the fourth quarter of 2019 from 4.5% in the same period last year, primarily due to our higher pricing power as a result out of our increasingly option might be and diversify the services.

Looking at other businesses.

Other revenue was RMB 79 million in the fourth quarter of 29.

Our 46% from RMB 54 million in this impairment loss here.

Cost of revenues increased by 21% a year over year to RMB 190 million.

The increase was primary due to increases in salaries and benefits of four employees engaged in car inspection quality control customer solace in after sales services as low as increasing the fulfillment cost of driven by increasing the transaction volume.

Gross profit increased by 490% RMB 276 million from RMB 132 million in the same period last year.

Gross margin increased to 59% in the quarter from 46% units into your last year.

Driven by the growing.

Our growing economics of skill and optimize the cost structure.

[music].

Total operating expenses was RMB.

862 million non-GAAP operating expenses, excluding the impact of share based compensation were RMB 800, this with distributors.

Susan and marketing expenses decreased by 31% year over year to RMB 255 million. The decrease this was driven by other continuous efforts to enhance operating efficiency.

Share based compensation expenses associated with the sales and marketing expenses were nearly a quarter to quarter.

As a percentage of total revenues sales and marketing expenses, excluding share based compensation expenses equates to 55% on 127% in the same period last year.

And GMH expenses increased by 20% to RMB 125, Niamh the increase was mainly due to an increase in a salaries and benefits as well as the professional fees.

General expenses, excluding share based compensation expenses were RMB eight millennial were RMB 116 million as a percentage of total revenue piano expenses, including share based on compensation expenses.

Were 25% compared with 12% in the same period last year.

R&D expenses increased by 26%.

To RMB 41 million the increase was from a due to the increase in infrastructure services related expenses.

R&D expenses, excluding share based compensation expense as was our of RMB. There were paid <unk> point Sixmillion were RMB 40 million.

As a percentage of total revenues R&D expenses.

Excluding share based compensation expenses were 9% a decrease from 11% in the same period last year.

Loss from the guarantee liabilities were RMB 117 million, we incurred guarantee liabilities associated with the remaining guarantee obligations from be a portion of the historical for filleted loans, which were not transfer to go in Pacer edition due to the impact of.

From a serious offer regulation and relating to the lending and the data collection in the fourth quarter of 29 cents.

Performance of the aforementioned portion of the longwall adversely affected.

Which leads to significant loss from the guarantee liabilities in the recorded a quarter.

Provision for credit losses was RMB 271 million compared with more in the center in last year due to the impact to our aforementioned new regulation.

In relation to London that the collection and impairment was incurred as a result of adversely affected fulfillment is off the companys financial assets, which mainly includes loans a recognized as a result of payment and or guarantee in the financial lease receivables.

Loss from continuing operations was RMB 586 million compared with RMB.

868 million in the same period last year, if not taking into account guarantee liabilities and the provision for credit losses loss from continuing operation would it be RMB 144 million.

Non-GAAP loss from continuing operations, which exclude the impact of share based compensation Wars, RMB 577 million compared with the R&D 300 million in the prior year period, if not taking into account Glen Keeler diligent and provision for credit losses non cat loss.

Loss from continuing operation will be RMB 135 community.

Now loss from continuing operation was RMB 589 million compared with RMB 392 million in the same period last year, if not taking into account guarantee our billings and the provision for credit losses.

Now loss from continuing operation would it be RMB 148 million.

Non-GAAP net loss from continuing operations, which is clearly the impact of share based compensation was RMB 518, new in the quarter.

Compared with the RMB 323 million the same period last year, if not taking into account turnkey liabilities and provision for credit losses, non-GAAP net loss from continuing operation would it be RMB 139 million.

Turning to our cash position as of March 31st with December 2019, we had cash cash equivalents of RMB 478 million.

That's our fourth quarter results now let me briefly go through some highlights of our full year results.

For full year Communitising total revenues increased by 141% to RMB 1500, 88 million from RMB 689 million in that period.

Yes, the unit prior year.

Total subsea revenue was RMB 1000, 347 million apt to 265 year over year.

From RMB.

870 million in the prior year.

All I used car transaction volume increased by 154% year over year to 97100 units and the its corresponding TMB increased by 155% year over year to RMB 11200 68 million.

Looking out to revenue stream of our to see business.

Tunisia revenue was RMB 711 million up to 250% from RMB 200, swimming in the prior year Commission rate increased to 6.3% from 4.6% in the prior year.

Value added service revenue was RMB 636 million App to 282% from RMB 166 million in the prior year.

Yes take rates increased to 5.6% from 3.8 percentage in the prior year.

Gross profit increased by 274% to RMB 899 million from RMB 240 million in the prior year.

Gross margin increased to 57% in 29 cents from 36 prior year.

Loss from continuing operation was RMB 1200, 92 million a decrease from RMB 2480 8 million in the prior year.

Non-GAAP loss from continuing operation, which exclude the impact of a share based compensation was RMB 1000, 200 million a decrease from RMB 1480 6 million in the prior year.

Now loss from continuing operation was RMB 1000, 328 million compared with RMB 1200, 52 million in the prior year.

Non-GAAP net loss from continuing operations, which included the impact of share based compensation was RMB 1200 43 million in the 2019, a decrease from RMB 1500 35 million in the prior year.

Moving onto our guidance for the three month end of 30 Onest of March 2020, taking into account of the factors mentioned earlier regarding the corner of hours and the business divestiture, we expect our total revenue from continuing operation.

To begin a range of RMB 80 million to RMB 85 million.

This forecast so with Lyft reflect our current and the promoting view on the market and operational condition and that is based on the pound the occurring the situation now uncertainty associated with their core norovirus outbreak, which are subject to change.

That concludes our prepared remarks.

Thank you Ms. Theres no appeared at wed like to open the call for questions now thank you.

Ladies and gentlemen, we will now begin the question and answer session.

I wish to ask a question. Please press star one on your top down anyway pertaining to be announced key Michigan sorry go ahead.

Please press the ashes.

Once again you wish to ask question. Please press star one on your telephone and wait for getting to be announced.

Your first question comes from the lineup fraud, Kim from Goldman Sachs. Please ask your question.

Hi, Thank you.

Hey, Michael.

Nancy so well down but you won't see good sources. They may again, you visited G.

Through the boss and Wanda Bud light languages. So.

Shutdown diabetes upon as usual so that's on tease out women CDN do assignment that you.

Leaching and sometimes on he's element to it it was saying a highest which we would have to go give attention will look a whole MASCC similar so I know.

Normalized.

Level.

Retail not the outages on each element to go.

Good idea was in the through your Asia, and agile meals mill at dialogue with them.

Now let me, it's all Asia provision applebee's, yet nothing to dial tone cinda attention, but its home you all case during two girls senior notes is your highest somewhat Queensland elements and you know as true when I did those feasible I'd foundries, yet you sell centene element.

The senior highs in Indonesia Silva Alzheimer's.

Thank you Dk, Michael Nancy and team. So two questions. Firstly is just given the current virus situation and your first quarter guidance of revenue down 70% to 79%, which is the 80 to 85 million just want to hear how are we seeing them much trends and the recovery path recently in April and when do you see.

Oil expects the levels students to return to more normalized level.

Through the year and my second question will be on.

Your loan business, which has been.

Divested.

And that there's still some that that haven't moved onto a golden pacer. So at the current.

Situation current level, what look what should we expect to see on the impact on a cash flow perspective.

From from now on or would it be more on noncash PML well. So when you hear is there anything anything from a cash flows.

Cash that we should be aware thank you.

She is here are noteworthy UK will allow for what our rental of Eagle antiviral looking up at our doubtful.

We're enjoying offered Idaho 90, both Asia.

Earnings.

To ensure we issued our each community medium term growth areas. Some of the Joe you keep us on to that you might become.

Turning to do to automate leadership.

So you can finally whole Aleutian Altra, Joe Eustace home I should mention going forward as we go to wonderful.

Thanks, Dave let those should dollar thing.

Towards end of dilution allocation issue for them.

Now, let me say Greenlighting news on just a human food in the news where you can go to will that easy to the goal to Ensinger holding doescher mailed on security is already answered freedoms injunction mining from threeq to either truly arbitrarily unbolt every year the Magellan.

Oh.

So because of outbreak of that's how I know merit.

Capex for the last thing and implement its rapid mainly because the close in yields car market.

Our vehicle dealer on locally they those oh.

So back to fully operation and the second thing is that the parts out some of the highly has been closed.

We cannot deliver the car onto the network, so that fulfillment acting pocket screens.

Thank god that period.

So basically all of that and that modeling what happens in.

Yes, good flow that 8 million sell volume in Q.

During the March.

They are basically there is no connection while I'm happy that tumor.

So that you will see are you hope to aren't the yields in cash yield for beautiful since you're making my comments on a meal teva overseeing the phenomenon.

Women.

On a 100 Glenn to goods Oems, we didn't have issues.

Meanwhile, Please ensure continues on inpatient honor QR logistical from which and people to use on she's your drugs angle evolutionary changes that we will gain DJ.

Secondly, beneficiary to you Jay girls.

Finally look towards should do.

Hi should be on utilization number.

Im going to be living you shouldn't you dial energy the GDP and the majority to assume that Nicholson, we should essentially there should not have the dilution.

Well, yes still entering into April Oh wait given the significance of picop involve volatile so based on our current knowledge with Inc.

It will be the second half of the year, we'll see significant recovery.

So I will show to basically that transaction model will be constrained by our three factors the first last topic.

Although the operate has largely contained.

Thoughts have they're off to.

A local governments have adopted quick merit choose to again at south with outbreak.

Also because of that crossing backdrop, I think Garland, Oxford humorous ability to approval by the car will be will be the situation now.

During inertia woman see condoning push out of Copel cultural memo coming the she told US it didn't support on the digital coupons in the availability in June and July and I'll comment on intangibles was down by both Kishore doses.

She albeit on price with Michigan.

Come the residual ecommerce into it as you know when the new Timbar and we'll go through them dining vegetarians opportunities on cash available through digital incorporate that.

Today, you see as usual mission in your model, we'll know more signaled on intermodal.

Well those consumers want very eager to buy apart as our enrollment in not only allows the hopper car within a couple of.

Our current fulfillment services I don't normally.

For a route lake.

Owning a lot it may help as far as I was out there for ratemaking et cetera, So were not able to meet these type of demand.

Articulate why not willing to wait.

If you suddenly usual, making key comment on are you share Joe equals four years, which was actually do should youngsters deductible.

Well known handle new change outage will go through to two days here comes you onto familiarity with important machine control.

Thanks for your typical increase warm and you should the SPP cannot women's boat shoe, though to the buyback at their Charlotte and maybe how much is a duty William beat you to legal or the should I am convinced we're down about even outside of the new one.

Okay.

Take a pretty low Josh.

Who truly I'm sure we'll into good Joe you, but.

On the material girl promote actually enjoyed a truly honestly showed on GDP rundown, having recently was the only partial yield weve of course with homeownership.

So the overall are just talking about the markets now basically.

Hard to with price range as low end or to lead.

But it looks had our average selling price our capital basically 128000 to iron So our with our relaxing approximate instead of a me too high.

So are they.

Hi, Paul slot heart.

Okay, our cannot remodel and will they cover I love this lower than the low low price.

Our.

Some of the whole two real one central I believe who will need spindle sunburn should use up another treasury present visible pacer. One conclusion, we won't mean change in if we didn't read between Humphrey T. Mobile media wondering if we got all our union easier for me and assuming no material Hydrotreater Eugene engine.

As you say several years should images financial.

Our full recovery will depend on that development up about outbreak. So based on our based on current situation Ali faxes see significant recovery starting from the second half of this year. If they use last December as the number like a level.

Way back to the weekend, we turned back from that level on that yet in Darfur top neck and even more.

Thank you.

All right I'm, just Mike O'hare far address your second question. So therefore, they are cash flow and other provision of guarantee and our credit risk.

Is that given the regulatory changes in the lots of fourth quarter and the corner of ours are breaking the first quarter. We have fully reviewed our historical financial assets and assess other relevant impact, though on the asset quality in the Q4 last year, we made a provision.

Further losses that have about RMB 270 million and incurred a loss from the cancel our abilities of RMB 170 million in this Q1, taking into account of the new accounting standards for credit losses.

Which kind of 10 times taste consideration of the corner various operates well provide a significant provision for credit losses, seven loss from guarantee leverages as well.

This sufficient that reflects the impact.

This item a will hit our piano, but wouldn't affect the cash flow too much.

Overall speaking so.

As we have talked about of alone facilitation business sayings lost in November.

Starting from this point with no need to take any guarantee obligations for the new loans with further through our platform. So we now can drive our business grows without incurring any guaranteed credit risk or cash outflow enter guarantee obligations.

Regarding our historical owns more than high has been transfer to a golden pace or rate answer the rest are still with us, but we already have a proper solution in place to manage that guarantee obligations and of course responding cash flow.

C band relative alone are the portion that has being transferred to Golden Pacer. So for this part the Golden Pacer well take a full leave guarantee obligations for this historical portion and the be held responsible for buying back further defaulted loans. So there was.

The any cash outflow from US is said, we can't have additional cash inflow going forward from this portion of loan when Sue on bank relate to the restricted cash can fully covered the actual loss from the guarantee liabilities, meaning is there eventually will be a non cash inflow.

After the maturity of this portion of loan we will be entitled for 85% of such amounts of net cash.

Regarding the loan is how do we not transfer over 90% are loans for we back and the remaining a small portion is the sitting on our own balance sheet. So 40, a leap enforcement.

Under the current arrangement.

We've based our financing partner the further offer cash outflow as a result of corresponding guaranteed will be controlled ACA limited level and the warrant impacts our cash position March.

For the remaining small portion of our own balance sheet. This represents.

Alone we have.

Historically, all bought back enter guarantee so going forward, we will only be cash inflows from this.

Depending on how much weekend collect back.

So overall, our we believe the impact of the off the vast alone facilitation of our operating cash flow will be limited. It also will ease out a long list of maturity of all this loans.

Additionally, our cash position can be strength as we will receive additional cash as a result offer business divestiture.

And the sufficient to support our business development in the next 12 months.

Okay. Thank you very myself.

Thank you Dk Michael.

Thanks Aaron.

Your next question comes from the line up and you want from Morgan Stanley. Please ask your question.

Hey, Michael NFC behalf, but what davinci kinda drillship and just empty seats.

Oh, Remoxy that you thought to take a sensational hard to try yield one.

So on into Dodger shortage.

In the injunction is just a little woman site Jacobs, especially OHA try needed to ship to ship full jolt Tobey I should just a full blown.

That's a bunch of your thoughts on board as for sure.

I wish I wish I, just saw containerboard and into just sheer just try and judicious with how about service.

Well my Youll meal, she's a Hong you the foam Angel hook for the quarter should show.

Can you take a should hold attrition.

Yes, well just hung yielding drove home, yet jumpy, Jake, especially a harder to get more sure.

You know this all time into more sure.

Just real quick where lift behind.

I'll just tell me if I'm in answer to your digital Oh, we like.

Good Township inaugural Joe how are you sure, especially on a more should the Yoshida San it yet or are well kind I see you find yourself.

Please let me just like myself, so I say mentioned at the cover Nigel outbreaks has a accelerates youre transformation of the entire.

You are buying process and a chance a transaction online.

Step.

Sales process.

Just want a order please elaborate more about or have you witness ending no long term.

And in the industry and used car industry. So you believe.

Such online transformation will benefit and how do you compare with your.

Unlike transformation of the model versus your major competitors. Thank you.

To add it all.

All I will definitely not everyone. How should I don't think okay. Now below women are in our opinion that John did have continued to should trend in Johnson treating ours retrocessional bunch OE between.

Yeah.

Yes. He wants me to 90 into accelerates our program, because we apply enabling falling apart from that.

Well machines, you know our hotel rotation and Joe you clearly shortage without approval the Josh.

The matussi accretive use in Atlanta from the on quarter front ingredient.

So we believe.

Our next car production tempering from Caroline.

Customer value either they have great great opportunity for ourselves as well.

Our hotel rotating equipment the more sure putting creek is helping to keep going from the quarter humans are in the arps growth.

Yeah, we copel terms all attendant home in the form of course not solution individual your accretion tradeoff for guys each member shovel orders.

With our.

Hi, I'm Bakken mono through our online.

Next is alive.

Black happiest are concerned with it what kind of provides consumers with high prices of homelessness heart as I think if I add parent I have I heard test prep as lastly, well around the pockets that lives within that.

Our hotel you that they can watch we didn't do a goal you wish initially Israel too many really begun resulted in us. This year you ever done Hughes, reducing time, which will run way I'm guessing online for higher Oh.

Our operations will become more efficient basic well bring our cost and that led to a much lower level. So I want him to consumer opinions why are better prices on the other has also continued to improve our financial performance.

So again Lincoln ceilings reduction should jocularity equal or because I think on coal usage.

Dumping the news on the women even in criminal shortage of fashion Gomez deteriorating occupancy goal.

Domestic luxury under your shortage of the reduced grievances and head, but I think format is account holder decision.

Operator, actually accelerate that I mentioned, a light parts and that's it.

That being very cautious about Chris no offline.

A mess or they operate as a consumer slowing preference for all I purchases.

[laughter] for five years, Oh, my actually Oh, yes, increasingly higher as well.

The engine behind your whole will enjoy reading hydrogen and home about taking solutions you talked a little not too. We all know should have gotten based out of some of them in.

Do you know pool will be turnkey portfolio to look at auction salvage occur Aegion venture did have Andrew dice informed our when she said rational arena you do either payback.

Right following the operator, well hopefully devoted to our south upgrading our allies and that can model. So we'll have been working our freight habitat, let's first why and what kind of fallback upgraded our part I under service.

A consumer well be able to complete.

Perhaps even more simplified and straightforward way well without the need to be at this stage I our offline.

Yarnell portion whopper issues. So the drugs would you know more than doubled in Cushing.

Not much inclusion let me put on their own salvage opening price will come contributors to the middle Tennessee, and the pollution do you want magento from them Youre.

Welcome data.

Yeah. So go ahead.

Our analysis in our transaction late we have accumulated.

Excessive accidently and know how you.

Hi performance used car inventory so it will not only how consumer buying a car of their twice a multi play and accurately integrate hurt. It can also help us to reduce our you factor related costs.

If I'm not sure if we'll neutral on a bulk call Tonight increase with Ascension industrial the home and John Bencich entered LNG Baltic engines are Ninja LNG Baltic solution from the dollar partial dose of Fob and achieve will have actual cohabitation going out for you.

Lastly, upgraded our service type.

Now consumer.

You might have operated right past life also extended our 30 day holiday lease rates in policy right here and then as our R&D coverage as well. So all of these will eliminate consumer concerns to buy a used car outlined.

Ggq total as a whole using bitumen generally pharmaceuticals in okay.

Good idea inertia in Q1, cohu patients with momentum or should we bundled solution to the balancing hedges.

From a coherent receivers initial go full intelligent, which will commence on hugely using as usual, we must reduce agenda on to enable to your hardware.

With all these matter in place our cost structure will be significantly case under their small optimized.

With more accurate. So that's how you arguments rate and the consumer now how all incurred we are able to review.

And I said accordingly.

Yes, as sales conversion and I think that's either service perfect well also how hot in two of our outpatient locations.

Although we will eventually be reflected optimized hotspot.

Non human the generation.

Earlier this year.

From not having either you for decades.

The terminable about fuel has become even accretion.

I know you don't usually what happens either Deutsche unknowns out I don't believe him home no money issue when we lined up even we are developing novel single for NUCYNTA ER.

I'll hop our upgraded strategy leasing it impacts of long term, Connecticut.

Optimize our optimized cost structure that will enable us to narrow our losses and take out to the breakeven point I tell lower volume level, although that's not our ability to our profitability as well.

Some of the use of solution.

Implemented go to be a lot more medium go Duncan due to lead who'd I'll conclude the call dr. from of industry Dziedzic, Ivy and button jump up fusion diabetes on using machine to meet you really really well for the project. She goes can you tell me Mistras group.

I listened time, Oh wait now has developed more resources.

Sure Great customer that is all our consumer so all these changes will not only make sure our business ingenuity hearing dot Cardinal Eric upright, but also creates more solid foundations molecules have well once the market.

Although physics and thank you.

Budgets to ship.

Once again, ladies and gentlemen, if you wish to ask the question. Please press star one on your telephone and wait for him to be announced.

Once again, if you wish to ask a question.

Please press Star one I guess also need to wait for anything else.

[noise] there no further questions at this time I would like to have this conference back to assess your thoughts Pete's tenure.

Thank you again, what's on our call today and for your continued support when you look forward to submit into Houston limitation. Thank you.

[noise] competition, please send Sheldon.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may all disconnect.

[noise] and.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by welcome to your Shins fourth quarter and full year 2019 earnings conference call. At this time, all participants are in and listen only mode. After managements prepared remarks, there will be a question.

Answer session. Today's conference call is being recorded if you have any objections you may disconnect at this time.

Let's turn call over to not just saw Investor Relations director operation.

Yes go ahead.

Thank you operator, Hello, everyone welcome to the UK fourth quarter, and if we are taking a nightmare.

On the call today, I became founder and CEO and you can sell our CFO. He can't will reveal business operations and the company highlights followed by getting who will discuss financial guidance. There will be available to answer your question. During the second vessel before we start I would like to.

In May of this call may contain forward looking statements made under the safe Harbor provision of U.S. Private Securities Litigation Reform Act of 19 that despite these statements made based on management's current knowledge and assumptions about they'll tell you that that that we lost no annual investor and thirdly.

Which could cause actual results could differ materially from though in the forward looking statement.

That's not undertake any obligation to update any forward looking statements, except as required under applicable law for more information about the potential risks and uncertainties. Please refer to the company, it's valuable to wait I think.

With that I will now it's very little over two hours, we allocate all happy.

Thank you noted Hello, everyone. Thank you for joining our fourth quarter and full year 2019 earnings conference call.

We are pleased to to finish off the year on such a solid and nodes.

He is our to see revenue increased by 65% to RMB 380 meeting in the quarter.

Not only do we record over 28300 only use come transactions during the quarter, but are we also increased our total to see to create the to 11.7% reaches the prevalent two per unit revenue of over RMB 13700.

2019.

Marketed and important the milestone for usually as Weve shaved other securities focus to to see online transactions.

Through all to the year, we continue to improve our platform by optimizing product and service offerings.

Enhancing service quality and extending our fulfillment capability and the infrastructure.

What encourage us the most is that we help to over 97000 consumers.

Why they're far off choose online without the need to visit a dealership in person.

This is a truly differentiated and innovative car buying experience for the l. each consumer.

In China, when compared with the traditional way of spending weeks or even moms visiting several dealerships to Fender the idea.

We as a national wide online selection of use package and the 35 used car, we help customers conveniently by the car production might not be April.

Available in their local market and the enabled them to send a better deals across the country by simplifying.

Comparing each car surprise to performance.

Coupled with the professional service and the convenience will deliver our business model offers consumer a unique value proposition that to reinforce our competitive position in the market and increase barriers to entry.

This will help generate a long term sustainable growth going forward.

We are now currently focused on hardware to see online transaction business.

The lifting from the loan facility occasion service car and the to be business will allow us to devote all of our attention and resources toward developing and getting hot our to see online disease.

Additional the diversity of our loan facilitation business enables us to drive for the girls resolved to incurring additional currency organic issues all credit risk starting from November 2019.

This will please.

On a much stronger boutique for the next stage of our development.

As we move further into 2020.

We are keenly aware of the challenge you created the by both the softening.

Macro environment and.

Volatility created by the Corona virus outbreak.

China is used car industry has been severally impacted by the.

Tend to make raisin disruption taking place across the industry is infrastructure and the supply chain.

During the first quarter, we saw considerable barriers to the used car patronise protests and fulfillment due to an fulfilling to.

Very limited due to people resource from offline activities.

Temporarily closed the local used car market and the dealerships.

And the Charlie you used car logistic and the title transfer.

As a result to other business operations during the fourth quarter. We also severly disrupted well the used car industry has been recovering steadily in recent weeks and the overall operations gradually returning to normal it's a real take sometime before the market a completely.

That is through the overall impact.

We live in mind, we expect to the upgrade so we'll continue to lead on our results for the second quarter.

That said I would believe the outbreak present just to as many opportunities as it's about challenging and the remaining competency our ability to say is the long term growth opportunities in China used car market.

Are you use come online continues to turn the upward in China sensory launch over to see only these countries actually services in earlier 2018.

We have been dedicated to transforming the entire buying process and their transaction online each step in the sales process.

The ought to break it actually.

Accelerating our online initiated as offline activities, we many significantly.

Constituted constrained.

He responds to the situation, we immediately impediment to stage to adopt other business service model upgrades and the cost of structure optimization.

On the service model front, we upgrade our products standardized space and.

Transform the way consumer serve the end procedure. They go through to complete upper tries to facilitate the the customers self-help online might experiments.

Canada all assigning.

Sales consultants to assist in and offline in prison for type one a customer.

Tom is tricky to their intention to Petrobras alone.

We have no offering all myself consulting and assisting the services, but we board customers will be empowered to two compared to the patronise entirely online. All by himself include let me about and selecting the car leasing opinions and.

Bidding opportunities related to document [noise].

During the entire buying process, our online consultants are always available to address.

Any issues out to consumer me have in order to facilitate seems unlikely that you.

As a result, your service model for online consultant and assistance.

We will simplify the process of serving.

Clearly the customers.

Increased sales productivity and.

Even truly enable us to significantly.

Reduce itself the headcount.

On the cost structure function.

Response to outbreak of Corona wireless where immediately in time into the temporary workload to base.

They did nothing program compute wide to for up to 45, our cash flow and.

Financial position by bringing fiber.

We need costs and the expenses and are carefully controlled.

More importantly, we've optimized our cost structure. According to our CRO into service model on top of the reducing south expense by simplifying the buying an affinity process. We are also.

Streamlining the corresponding cooperate to management structure and the process. All this but it just depends not only enable us to reduce cost and expense for better unit economics, but also lost to improve overall appreciate efficiency.

As the impact to all all debris could be two feet. We believe the used car market will gradually.

Boise back into in coming quarters.

Catalina, thereby people's growing prefer is.

For owning their own car and pent up demand for use the card the.

Use of cars.

Lets break has accrete created.

We've upgraded their service model and optimize cost structure already in place.

We will benefit from the for the growth opportunities once the market rebounds.

I will focus primarily on becoming a one stop online destination.

For buying used car, we are confident until we will be able to order.

Qualify our market leading position as a national wide online used car dealer and.

Creating long term value for our shareholder.

Before I turn to turn the call to go for our financial details.

Want to extend our deep is to sympathies to all of those who face to end the continue to face extremely difficult as a result to all the current alaris ought to break I want to also experis.

Express our.

I agree.

Rob could you choose those schools.

Fall to end the continue to find Chango from July to.

Hum Beach the.

Do you see thank you.

Now I'd like to turn the call over to our CFO to walk you through the financial result from keys.

Okay. Thanks, Okay, Hello, everyone. Thanks for joining us today.

As you can imagine have already however, we are pleased to see our continuing business generally solid and consistent top line grows and the gross margin improvement throughout 2019.

If I felt the accounts lost from the against volatility in the provision for credit losses, which are primarily associated with our historical financial assets.

Our adjusted loss from continuing operations continue to narrow for the fourth consecutive quarter of RMB, a 135 young in the fourth quarter off 2019.

As we continue developing other to see only used car transaction business with off incurring additional credit risk going forward. As a result also divestiture of our loan with an Asian business. We have also keeping axes measures to assess in a manager the impact from the guarantee.

Obligations associated with our historical loan data, we are knowledge transfer to the Golden Pizza.

[noise] in the fourth quarter off the last year Osiris offered regulations in the relation to lending in the.

Data collection, including the proposition on exchange data collection practices.

We are jointly issued about the relevant authorities.

This adversely affected the delinquency rate as well as the collection in the repossession rates in the connection with our historical loans.

After we evaluating the loan performance, we made a significant the provision for credit losses in the incurred additional loss on the guarantee liabilities with fourth quarter.

Moving into the first quarter of 2020, New response to the new accounting standard for credit losses effect on generally the first the twentytwenty and the ought to break off a core and of course, we have really review the quality of our historical financial assets again and are carefully assess otherwise.

Elements impacts.

As a result, a significant provision for credit losses in the logs from guarantee liability.

It will be provided for first quarter of 2020.

What do we believe the impact of from the fluctuation on asset quality on our further cash flow will be eliminated with careful control and a proper solution already in place to manage the guarantee obligations associated.

With this portion of loans.

End of the current arrangement with our financing partners. We believe the cash flow for buying back further defaulted loans as a result out of our historical guarantee obligation will be carefully controlled outer limits in level going forward.

Looking ahead.

SDK just mentioned.

The transformation of our service model will help us effectively reduce corresponding cost and expenses and improve operational efficiency.

In addition to reducing sales headcount by providing online consulting and assistance services. We're also able to reduce the inspection relate to the cost of by focusing on selecting and expecting higher price to performance use card base, Oliver accumulatively experience and knowledge.

In the inventory.

Benefiting from the streamlined the cooperation management structure in the process, we are able to bring our headquarter relatively expensive and optimize the in an efficient level.

In addition, overcast position will be strengthened in the coming holders as our result off our recent the divestiture and are sufficient to support our business development Inox to 12 month.

This will provide us a greater flexibility to investing all the Fogo January long term animal group.

Now, let me walk you through our financial health with for fourth quarter and the full year Communitising. Please note that the result, I will discuss related to continuing operations only on numbers are young RMB unless otherwise stated also please note that some numbers I refer to our long.

GAAP numbers, you can find that reconsolidation of this numbers at the bottom off of our earnings release.

In the fourth quarter total revenue increased by 61% to RMB 456 million from RMB 289 million in the same period last year. The increase was primarily due to the ecosystem into FY transaction body, Jim Leap Commission rates in the us take rate.

Our total too few revenue was RMB 388 million up to 65% year over year from RMB 236 million in the same period last year.

All I just heard transaction volume increased by 26% year over year to.

28300 into two units.

And it is corresponding GMB increased by 32% year over year to RMB 3380 Union.

Looking at two revenue streams of our to see business.

Commission revenue was RMB 207 unit.

Six 9% from RMB 120 swing only in the same period last year.

Primarily due to the increase in the transaction volume Dnbi and commission rate.

The unique value proposition, we are now able to overcome humor along.

With the improved user experience and the higher pricing cover.

Resulted in the commission rate expanding to 6.3% from 4.9 person in the same period last year.

Value added service revenue.

Was RMB 180 million up to 60% from RMB 113 million units, if you're at a loss here.

Primarily due to the increases in the transaction volume GMB and they'll be has take rate.

We have take rate increased to 5.5% in the fourth quarter of 29 thing from 4.5 person in the same period last year, primarily due to our higher pricing power as a result out of our of our increasingly option might be and diversify the services.

Looking at other businesses.

Other revenue was RMB 79 million in the fourth quarter of 29.

Our 46% from RMB 54 million within pure last year.

Cost of revenues increased by 21% of year over year to RMB 190 million.

The increase was primarily due to increases in salaries and benefits for employees engaged in car inspection quality control customer service in episodes services as low as increasing the fulfillment cost were driven by increasing their transaction volume.

Gross profit increased by 190% RMB 276 million from RMB 130 accumulated in the same period last year.

Gross margin increased to 59% in the quarter from 46% units into your last year.

Driven by the growing.

Our goal economics of skill and optimize the cost structure.

Total operating expenses was RMB.

852 million non-GAAP operating expenses, excluding the impact of share based compensation were RMB 850 stadiums.

Susan and marketing expenses decreased by 31% year over year to RMB 255 beyond.

The decrease this was driven by how their continuous efforts to enhance operating efficiency.

Service as an invasion senses associate with our sales and marketing expenses, where new during the quarter.

As a percentage of total revenues sales and marketing expenses, excluding share based compensation expenses equal to 55% on 127% unison period last year.

And GMH expenses increased by 20% to RMB 125 million. The increase was mainly due to an increase in a salaries and benefits as well as the professional fees.

General expenses, excluding share based compensation expenses were RMB 8 million were RMB 115 million, that's what percentage of total revenue piano expenses, including share based compensation expenses.

Were 25% compared with 12% in the same period last year.

R&D expenses increased by 26%.

To RMB 41 million the increase was primarily due to the increase in IP infrastructure services related expenses.

R&D expenses.

Leading show, there's some compensation expenses.

Of RMB there were paid <unk> point Sixmillion were RMB 40 million.

As a percentage of total revenues R&D expenses.

Excluding share based compensation expenses were 9% a decreased from 11% units impurity last year.

Last from me guarantee liabilities were RMB 170 million, we incurred guarantee liabilities associated with the remaining guarantee obligation from the a portion of the historical for Phillips is loans, which were not transfer to go in pacer.

In addition, due to the impact of from a serious offer regulation of relating to the lending and that's a collection in the fourth quarter all 29 cents.

The performance of the aforementioned portion off along will adversely affect it.

Which leads to significant loss from a guarantee liabilities in the recorded a quota.

Provision for credit losses, It was RMB 271 million compared with me on the center in last year.

Due to the impact to our aforementioned new regulation in relation to lung means that the collection and impairment was incurred as a result off adversely affected with them is off the companys financial assets, which mainly includes loans are recognized as a result of payment and or guarantee and furniture leaves recent.

Goals.

Loss from continuing operations was RMB 586 million compared with RMB 368 million units in period last year, if not taking into account guarantee liabilities and the provision for credit losses loss from continuing operation would it.

The RMB 140 formula.

Non-GAAP loss from continuing operations, which include the impact on share based compensation was RMB 577 million compared with RMB 300 million in the prior year period, if not thinking into town gung killer villages and provision for credit losses non cat loss.

Loss from continuing operation will be RMB 135 million.

Now loss from continuing operation was RMB 589 unit compared with RMB 392 million in the same period last year, if not taking into account guarantee our deliveries and the provision for credit losses now loss from continuing operation would it be RMB 148 million.

Non-GAAP net loss from continuing operations, which exclude the impact of share based compensation was RMB 580, new unit holder.

Compared with the RMB 323 million. This emcare last year, if not taking into account down to our belief and provision for credit losses non-GAAP net loss from continuing operation would it be RMB 139 unions.

Turning to our cash position as of March 31st with December 29 thing, we had cash cash equivalent of RMB 478 million.

That's our fourth quarter result, now let me briefly go through some highlights of our full year results.

For full year funding I think total revenues increased by 141% to RMB 1500, an eight A.O. Smith from RMB 659 million in the period.

Yes, the unit prior year.

Total to see revenue was RMB 1000, 347 million apt to 265 year over year.

From RMB.

870, new only in the prior year.

Oh I used car transaction volume increased by 154% year over year to 97100 units and its corresponding TMB increased by 155% year over year to RMB 11200 68 million.

Looking out to revenue stream of our to ski business.

Leisure revenue was RMB 711 million up to 250% from RMB 200, and it's really in the prior year Commission rate increased to 6.3% from 4.6% in the prior year.

Value added service revenue was RMB 636 million up to 282% from RMB 166 million in the prior year.

We have to take rates increased to 5.6% from 3.8 percentage in the prior year.

Gross profit increased by 274% to on the 899, the from RMB 240 million in the prior year.

Gross margin increased to 57% in 29 cents from 36 prior year.

Loss from continuing operation was RMB 1200, 92 million a decrease from RMB 2480 8 million in the prior year.

Non-GAAP loss from continuing operation, which exclude the impact of a share based compensation was RMB 1200, 30 million a decrease from RMB 1480 6 million in the prior year.

Now loss from continuing operation was RMB 1000, 328 million compared with RMB 1200, 52 million in the prior year.

Non-GAAP net loss from continuing operations, which is due to the impact of share based compensation was RMB 1200 43 million in the 29 to a decrease from RMB 1500 35 million in the prior year.

Moving onto our guidance for the three month end.

31st in March 2020 taken into account of the factors mentioned earlier regarding the corner of hours and the business divestiture weeks that Oliver total revenue from continuing operation to being a range of RMB 80 million to RMB 85 million.

This forecast the with Lyft reflect our current and the promoting view on the market and operational condition and it's based on a pound via phone the situation now uncertainty associated with their corn of ours outbreak, which are subject to change.

That concludes our prepared remarks.

Thank you Ms. Theres no apparent at wed like to open the call for questions now thank you.

Ladies and gentlemen, we will now begin the question and answer session.

If you wish to ask the question. Please press star one on your top down anyway pertaining to be announced.

They stick SL request, please press the pound ashes.

Once again and if they wish to ask questions. Please press star one on your telephone and wait for him to be announced.

Your first question comes from the lineup fraud, Kim from Goldman Sachs. Please ask your question.

Hi, Thank you.

Hey, Michael Nancy, so well well down but when he good sources, they may get either positive or do you not to the boss and wind up but nobody wanted to go so no shutdowns out of I mean, she is about as usual.

On T. Salomon CGM do assignment that you.

Leaching you sometimes on he's element to it it was saying it was here, which we would have to go through that has changed.

A whole Matt you see some us so I know, we've already but we don't normalize Steve you've got level.

Yeah, not the outages on each element to go through the year was in the two yours.

And I do meals.

Let's talk with them easily but not yet it's all Asia.

Provision applebee's, yet not going to not considered pressure, but its home you. How acacia is doing to go a senior notes is your highest somewhat whitney's on elements and you know I should do when I do see Ciber craggy foundries, yet you. So that's one element.

The senior housing, Indonesia Silva, not all fees and like you Dk, Michael Nancy and team. So two questions. Firstly, it's just given the current burris situation and you'll first quarter guidance of revenue down 70% to 79%, which is the 80 to 85 million swimming here how are we seeing the much trends.

And the recovery path recently in April and when do we see oil expects the levels students to return to more normalized level.

The year and my second question will be on.

Your loan business, which has been divested.

But there's still some that that haven't moved onto a golden pacer. So at the current situation current level, what we what should we expect to see on the impact more on a cash flow perspective.

Oh.

From now on or would it be more on noncash piano well. So when they hear is anything anything from the cash flow.

On a cash that we should we should be aware. Thank you.

Sure, Yes, or no STK will elaborate on rental Eagle antiviral looking up at our doubtful.

We're doing up at Idaho and ethanol. Thanks.

Are you.

He intuity initial about continuing to medium term grow our you're saying that Joe you keeping some tweaks that you might become.

There's lot of your leadership.

James you finally whole allusion altra, Joe issues home highs share Gencos reward as we go to wonderful limit those should dollar thing.

Within the solution allocation issue for them.

I want to go do my views on just a human food in the U.S, where you can go to will that you do goal to intangible and Doescher mailed on it.

Thank you to go down turn Sweden's injunction mining from Threeq to either to deleverage OEM Belied review of the Magellan.

Oh.

So because of the outbreak of stuff I know merit a deal you will have factoring.

In significantly disrupted.

Ladies.

Oh, well in your car market and Ah Ah vehicle dealer on local we are they those oh.

Go back to fully operation and the second thing is that he talked about some of the highly has been close.

We cannot deliver the car odd to electrochem. It. So that's the film is acting OXXO screens.

Thank god that that period of time, so basically all of that and that's.

So what happens in.

Danielle it before that he will yet so volume.

On February and March.

They're basically there is no transaction model happened.

Huh.

So that you fear you hope to aren't the using cash yield for little bit finish their mission like some upon a meal Teva both seem to have an item.

Well then.

Some of them going to go Joey on Canadian crashes.

We have always ensure continues on page on our Q art Ajay grow from we continue to use on she's your drug fungal evolutionary changes that we will gain DJ.

They couldn't feel very sure do you take a.

Function look towards should you know you wish each year I should be on utilization number.

Lending limit you shouldn't you dial attitude, it's easy to use and the majority to assume that go who we should essentially there should not to be done.

Oh, yes, so entering into April O., Wayne Didnt see significant the picop involve volatile so based on our current knowledge we think.

It will be the second half of the year, we'll see significant recovery, although model. So I will show to basically the time that model will be in Spain, <unk> three factors the first last topic.

Although the operate has largely contained.

But there are few.

Our local governments have adopted merit choose to again without without right.

Oh, no because that's costing backdrop, I think Ireland I consumers' ability to approval by the car will be will be the situation now.

Fairly inertia woman see condoning pushout of Copel cultural memo coming to she told US it didn't support on the digital coupons in the availability in June and July.

Hum into intangibles was down five of C. Autoship.

Shelby unpleasant Michigan.

Come to resist show ecommerce into it as you know womanly timbar hungry to work with them that leverage comes off of those she's not actually on Google. So do you do that incorporate that.

Today, you see as usual, we'll mission yield, but all we'll know more should not on intermodal them.

Well those consumers, while they were eager to buy a car add to that enrollment in nominally a wealth of how we think.

They bought a our current fulfillment center as high normally loss for allowed us to Lake.

Putting a lot they hadnt as far as I was out there for renovation et cetera, So were not able to meet these high profile demand or.

I'm not willing to wait.

The determination will meeting cucumber, rather you share Joey agree with those attributes fiduciary Nashville.

They will handle mutational visual build to suit today here comes you onto some news whether you've been putting this yoshimi control.

Is your typical includes warm and easily SPP Kindle women's boat shoe, though trading down into their Charlotte. Indeed, ltwos, it's easy on B, you treat or the she computers I'm about to even out at a new one.

Okay.

She was pretty low Josh creep into our who truly I'm sure we'll reach of good Joe you, but.

On the material slowdown as we've enjoyed a truly don't we showed on ggq on that and recently deal. So you'll be bejeweled units Weve of course, who was the management.

So the or just talking about margins now it's basically a hobby.

Hard to with pricing as low and ARX uneven, but if it looks had our average selling price our capital. It basically 128, oh than ours. So our used cars collapsing price range, it's definitely a me too high.

So on a high profile art, if I look at our time, that's a lot of and will recover I love this lower than the low low price and Uh huh.

Some of the whole two real one stringent equal one image and you know sunglass should we just haven't put pressure on.

Sure one conclusion, we don't need Sheehan equally between Humphrey PV number one you wonder if we all are easier for me and assuming no material Hydrotreater Eugene engine leasing.

So you don't should imaging financial.

Our full recovery will depend on the development of about outbreak so based on all our based on current situation.

Back to see a significant recovery starting from the second half of this year. If they use last December the normalized level way back to the weekend. They serve back from that level on that yet in Darfur top that have you guys.

Thanks.

All right on just Mike O'hare try to address your second question.

So therefore, they are cash flow and other provision of guarantee and our credit risk. So is that given the regulatory changes in the lots of fourth quarter and the corner of ours, our breakeven. The first quarter, we have fully reviewed our historical financial assets and assessing other relevant impact.

On the asset quality.

In the Q4 last year, we made a provision for credit losses, it about RMB 270 million and incurred a lot from again until our deliveries of RMB 170 million in this Q1, taking into account of the new account with vendors for credit losses.

Which have been time, taking consideration off the corner of hours operate well provide a significant provision for credit losses said in a lot from guarantee liabilities as well our two sufficient that reflects the impact.

This item a will hit our piano, but wouldn't affect the cash flow too much.

Overall speaking so as we have talked about of a low facilitation business sayings lost on November are starting from this point, we still needs to take any guarantee obligations for the new loans differ through our platform. So we now can drive our business grows.

I thought incurring any guaranteed credit risk or cash outflow and are guaranteed obligations.

Regarding our our historical lows more than high has been transfer to a golden pace already answer the rest are still with us, but we already have a proper solution in place to manage that guarantee obligations and of course responding cash flow.

She was done relative to loans are the portion that has being transferred to Golden Pacer. So for this part the Golden Pacer well take a fully guarantee obligations for this historical portion and the be held responsible for buying back further defaulted loans. So there was.

Be any cash outflow from us is that we can't have additional cash inflow going forward from this portion of loan when Sue on bank relate to the with good cash can fully cover the actual loss from the guarantee liabilities, meaning is there eventually will be a map cash inflow.

After the maturity of this portion of loan we will be entitled for 85% of such amounts off net cash.

Regarding the loan is how do we not transfer over 90% are loans for reback and the remaining small portion is the sitting on our own balance sheet. So 40, a rebound portion.

Under the current arrangement.

We are at least our financing partner the further on the cash outflow as a result of corresponding guaranteed will be controlled echo limited level and the ones the impact our cash position much.

For the remaining small portion of our own balance sheet, it's represent.

Alone we have.

Historically, all bought back into the currency so going forward, we will only be cash inflow from this.

Depending on how much weekend collect back.

So overall, we believe the impact the off the last a little facilitation of our operating cash flow will be eliminated. It also will east out along with the maturity of all this loans.

Additionally, our cash position can be strength as we will receive additional cash. So result, all the business divestiture.

And the sufficient to support of our business development in the next 12 months.

Okay. Thank you very much.

Thank you Dk Michael.

Thanks Aaron.

Your next question comes from the line up and you want from Morgan Stanley. Please ask your question.

Hi.

Colin assay, Oh, but what davinci kinda drillship and just empty seats.

Oh, Remoxy that you thought to take a since I shall hard to try and whatnot.

Thank you Dodger shortage.

And the injunction is just a little woman site Jake.

Right.

Just a full jolt Tobey I should just for Glenn has actually been censorship thoughtful that's for sure.

I wish I wish I, just saw a continuing broadening budget should just try and judiciously how about service.

Oh sure to Hong you the foam Angel hook for the quarter should show should opinion judiciously, Although just finished product yes.

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Foam, yet jumpy, Jake, especially a harder to get more sure.

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And Tom sheet.

So how are you sure, especially on a more should the Yoshida San it yet.

Okay and I see you find yourself you. Please let me just like myself, so as I mentioned that the Ur cobot notch outbreak us up accelerates your chest formation.

Entire a buyer or buying process and a chance a transaction online of each step.

In the sales process.

Just want a order please elaborate more about or have you witness innings and or long term trend in the industry and used car industry. So you believe.

Such as much as formation real benefits and how do you compare with your.

Unlike transformation.

Model versus.

A major competitors. Thank you.

Heavy.

All I will definitely not everyone here, how should not be ball thing okay. No Dino will maintain our in our union that John did cause you to assure trend in Johnson treatment arms, which was as you will find so even if we do so.

Jack was recently.

Right.

And if we apply enabling Ali apart from that.

Well issues, you know, our who treat fashion or Joe you could you be salvage without these are the jockey.

The matussi accretive or using the findings from the one quarter front ingredient.

So we believe our allies and action when compare like.

Customer value.

Great great opportunity for ourselves as well.

Our hotel, surpassing Coleman to more sure putting creek ability to keep going for you for them.

In the architectural.

Yeah, we could build homes all agenda, including the Pulmicort none of solution is helping to increase until it off for guys East membership.

With our.

Our Bakken model, so our online.

Second alive.

Like how can you talk on services, what kind of provides consumers with high prices all at the heart as I think if I am I haven't I have I circuit.

As flat the well around the pockets that required.

Our hotel, Joe you that doesn't want to recall using the shoulder used vehicle to many really they're going to resulted in a position.

We don't usually using the temperature bill one way of getting online for higher.

Oh operation will become more efficient wakes up well bring our on that thanks to a much lower level, so I want him to consumer hanging right.

I said on the other health what's the also continued to improve our off I never before I was feeling.

So again, you can see latency lead them to shoot Jocularity equal, which was I think on usage.

No I don't really knows on a woman, even the criminal shortage of Therapeutical managerial.

For the people not just luxury under your shortage of the there is usually the season had kobe surgical masks the killed infusion.

Oh, great actually accelerate but ambitions Elias parts and that's it.

Also being very cautious about Chris no offline.

A mess or they operate.

Yes, going preference so all I purchases.

[laughter] well buy online actually Oh, yes, recently hired as well.

Okay, and jumbo Hot your whole will enjoy reading hydrogen in home about taking solutions either time.

Not too we all know shouldn't got 10 days out of some of them in.

No no pool was 800 equal affordable to look at how should we be Shelby to occur Aegion venture did a London based on our when she says rational arena you do either payback.

Right.

All right well, how palladium, along with our south upgrading our allies and that's a model. So we're hoping working all three I haven't yet, but first why and what kind of fall upgraded our card and the service.

Consumer well be able to complete.

I think has even more simplified I'm afraid Walmart way well without the need to be at this stage <unk> our offline.

Yarnell portion was received further do junk food you then all of examples include Ocean.

Now lets inclusion let me put on their own shortage of grew twice weekly contributors for the middle switching on the pollution do you want Magento Truman Youre Nielsen data.

So based on our analysis.

Our transaction.

We have accumulated.

<unk> expenses.

I know how.

Yeah, Hi performance Ah, Yes argument.

So it will not only how consumer you'll find that are out there quite a multi play and that correctly, which hurt. It can also help us where he was already Bachelor related costs.

He's done uncertainty will enable the bulk call Tonight increase with us on him industrial the home and John essentially entered LNG voltage and handle Ninja LNG Baltic solution from the dollar partial to forgot funny and achieve will actual copel taken on hours coding.

Fit Elias upgraded our service type now consumer consumer has operated freight past life awfully Bender, our 30 day holiday East wake him all at the right here.

No R&D coverage as well so all of these will eliminate consumer pennsaid two by yes car hour.

Do you get your total we'll show you assume bitumen generally pharmaceuticals in okay.

I'm not going down due to machines, you hook with base in physical matter most years, we bundle solution to the dollar nothing hedges.

On the call Hydroponics easy this initial school food and how does the while keeping the jumps usually use as usual introduce gendarmes wouldn't be able to your hardware.

With all these matters.

Our cost structure will be significantly changed and therefore optimize oh wait more accurate. So that helps you arguments rate and the consumer now how all that occurred.

Well I believe you Oh and.

Accordingly.

That's a sales conversion and the seamless I guess there if that were also how hot in two of our operation located Ah automatically eventually even exactly yeah optimized hotspot.

My team and the termination eat what your issue do you do not having either you for decades and I'm, assuming it will adopt fuel hostage on you and accretion.

I know you've done issue that we need a joint you don't have I don't believe him home numbing issue when we lined up even we are developing novel Segal from nothing good.

Our upgraded that even yet it's actually a lot from Connecticut.

Optimize our optimized cost structure will enable us.

Narrow our losses and pick up to the breakeven point I have lower bottom level, although that's not our ability to our profitability as well.

Some of the use of solution.

You too many people to bail Hot will immediately go Duncan will lead Hollywood I'll conclude the call Dr. commitment to take Ivy and put on some contribution diabetes on using machines and we you reveal our yield we put a finer she goes from the materials.

I listen time, a wait now has more resources.

Great customer that is all our consumer so all these changes will not only make sure our business anyway.

Oh I know era.

Also creates more solid foundation Barbara here for a rough once the market really about.

Although physics and thank you.

[noise] digits.

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Oh.

What is again, ladies and gentlemen, if you wish to ask the question. Please press parwan on your telephone and wait for him to be announced.

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[noise] there no further questions at this time I would like to handle the conference back to its now she saw Stephens teen yeah.

Thank you again, what's on our call today I know for your continued support when you feel well look forward to introducing limitation. Thank you.

[noise] competition latest said Sheldon.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may all disconnect.