Q1 2022 Uxin Ltd Earnings Call
[music].
Ladies and.
Gentlemen, thank you for standing by and welcome to <unk> Earnings Conference call for the quarter ended June 32021 at this time all participants are in a listen only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded.
If you have any objections you may disconnect at this time I would now like to turn the call over to your host for today's conference call. Mr. Shao Zhu. Please go ahead ma'am.
Thank you operator, Hello, everyone will come to you since earnings conference call with the culture and its John.
130 of 2021 on the call today are BK hunger I'm, the CEO and Jon <unk> 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.
Before we start I would like to remind you that this call may contain forward looking statements made and to the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
These statements are based on management's current knowledge and assumptions about future events that can.
Walk known or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward looking statements.
You are seeing does not undertake any obligations to update any forward looking statements, except as required under applicable law for more information about potential.
Those risks and uncertainties.
Please refer to our findings with the SEC with that I will now turn the call over to our CEO Teekay. Please go ahead Sir.
Sure.
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<unk> gone to figure that out now to go to do it or to use your words.
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My boyfriend.
Hello, everyone. Thank you for joining our earnings conference call today to better communicate with both domestic.
Internationally Laughter's my prepared remarks, they will be in both English and Chinese.
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Please go which we were going to be increasing because all the profitability there.
First quarter of fiscal year, 2022 which ended on June 30, with one of the most trusted cultures with experience of the last 10 years, and a huge capital constrained and yet with business growth.
Encouragingly, we managed to deliver solid results. Despite all the challenge.
And achieve sustainable growth in terms of revenue and sales compared with the previous quarter.
Same time, we continue to do efforts on cost and expense control and our operational costs.
Sorry.
Seasonal loss substantially decreased in the quarter.
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101 type ratio, it's awful, but initially a different elite adhesion failure going for diesel I put on Europe, food, Jerome and the IRS, even more share allocation.
In the first quarter of fiscal year 'twenty can be too, although we were only able to maintain our relatively small retail inventory due to cash constraints.
Strength with SKU or seek to enhance our fundamental capabilities and vehicle softening reconditioning bills and delivery all the progress. We achieved this quarter has built a solid foundation for future business expansion and the application of the NRC model.
That's a trigger and $4 million of women tissue, including Europe.
I'm going to income going through two Mou, using <unk>, which we're not going to come out of <unk>.
Globally and have accordingly, Hoboken border going through the arbitration.
For vehicle softening, we continue to extend to opportunity.
The theme of our used car acquisition network.
Inventory only model.
Solid branding and strong supply chain resources with both individual owners and car dealerships have enables us to start more high quality used vehicles at reasonable prices.
Thanks.
CRC, they're trillium to refunds and refund Hershal woman tissue bondholder to recently, which will not begin to Europe on the IRC. The two beta Lutron Northern chart you showed it on page <unk> income they frankly Michelle.
<unk> difference in the lead vaccine or shortly thereafter.
Hope you can be on the deductions.
Although one could even be mature cohort sequel, <unk> gotten through the neutral for now.
In terms of car reconditioning capabilities.
I see.
We continue to refine our whole process by standardizing end to end procedures.
Improving flow efficiency.
Between key staff upgrading equipment and technologies and optimizing staffing in the production line.
Seven months of operation the cocktail hour reconditioned vehicles.
Exam. This has enabled us to offer stable supply of high quality.
And Nevada mining costs for our customers.
For social social hold of engineer women, Jonathan you will hinder three rounds with the.
ZIP code or coker turnaround conjuncture positions.
300, <unk> women, Jimmy <unk> Coppola from quick solutions, you shouldn't see a proton guidance into show a whole bunch of that offshore for Google under Covid.
Yes, nutrition infusion of ultrasound with our approval should earning calls for the <unk> and cash with Petronas in volatile versus.
How many vehicles would either <unk> at all in fact, you can put loans out via Nonrenewals Botswana.
Corporate from Europe.
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This is John Whittington.
In terms of vehicle sales and after sales services, we remain commitment committed and focused on creating long term value for our customers with serious may follow up on customer feedback and continues to improve each step of the customer experience from sales.
<unk> delivery to after sales support during the quarter, our net promoter score or NPS increased to <unk> 40 for the continued improvement of NPS has also enabled us to achieve decent sales conversion, despite relatively small retail inventory, which gave us.
Gives us great confidence to continue to scale our inventory in wholesale.
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For the year with no cash.
<unk> ultra down the financial impact, while Michelle him quote cycle quarter based on normal focus on pizza and the funding of the instrument.
Chris element in total gallons per unit will come to order three including Twilio Copa you look it up and broader solutions for glucocorticoid, yet we believe that I can do the charter profile.
After receiving the first tranche of the news last month in July our business has been recovering as expected and granulate, assuming two high quality.
<unk> growth momentum was still up operationally Q3, FX vehicle stopping the conditioning capacity and offline showroom expansion investments in three key areas helped increase off label for sale inventory is offers our customers more selections.
And to help build a better experience throughout the car purchasing journey and does bring higher sales conversion.
Through the country John IRC, the two big we believe.
<unk> gross profit on Google for doctoral mechanical dwarfs, the analytical Joshua you Didnt vehicles Archrock couldn't.
<unk> revenue guidance on total hole temperatures Union channel, even without <unk>.
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Arthur to increase inspection and reconditioning capacity in the long run using and council country governments of perplexity as.
<unk> recently entered into a strategic partnership to jointly and lessening and we would've used car inspection and reconditioning plants with a total investment of up to $97.0 billion the plant.
Actually to have an annual production capacity of 60000.
100000 vehicles once it is in operation. This production capacity will provide us with a stable and a large supply of high quality of used vehicles in the coming years.
Our monthly tissue Chinese competitor 'twenty, when we go through the triangle.
Do you want to chime in.
<unk> for treating shareholders.
Yes.
Patient tissue a dealership transaction.
Going forward, we will continue to provide high quality products and services to our customers.
Sales conversion and CFO, John supply chain capabilities, and deliver steady sales growth and a higher return.
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<unk> well Miss.
I'm doing all right around me, but was hoping to hardware and then the shop manager TT Knight's mission engine when it comes out with <unk>.
When you find at home.
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Our mission therefore, the hyper goodwill balance.
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I hope that you can continue using essentially year over year on trauma. What are you already seeing seem on the north wall with India.
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And this year Matt.
And in Vectoring, which we just celebrated our September nine.
In the past decade, we have experienced staff exciting and top times using has become stronger.
Because of all of the challenges we have overcome as one team.
<unk> started with the mission to make it easy to average Chinese customer to honor.
Water used vehicles.
The solid foundation that drives our passion to provide customers with high quality and value for money used car.
In the bathroom cost services, we are confident and determined to continue contributing to the long term healthy development of China's used car industry.
Although was uninjured Hilton on luxury digital element is therefore drunk or without the adventures I wish to welcome John Please.
With that I'd like to turn.
Turn call over to our CFO to walk you through the financial results John.
Okay. Thanks, Dk Hello, everyone. Thanks for joining us today.
I think I just mentioned, we had a very challenging quarter on book is this operation and the financial resources for the quarter ended the drilling the <unk> 2021.
As you all know.
We announced our agreement into a binding investment a term sheet on a per the first now we received the first tranche of the financing on July 12. Therefore from April to June we were running <unk> on IRC business with very limited resources. However, we still managed to deliver continuous growth in terms of both.
Also vehicle transaction volume and the revenue.
To achieve the above progress with spend a tremendous efforts to leverage our capital.
Capital efficiently.
Our team has successfully pivoted effective car sourcing channels channels with strong supplies. However, we were only able to maintain our relatively small retail even.
<unk> because of the capital constraints.
Therefore, the balance of the car sourcing supply on our cash capacity, we increased the percentage of vehicles sold through our wholesale channels for the quarter ended its Linda <unk> 2021.
The closing of the first tranche of the financing transactions in July September.
<unk> substantially improved our cash position and the ability to expand the business.
The daily car reconditioning productivity of our he on IRC was more than doubled and we began to build up retail inventory rapidly.
We expect the company's performance to continue improving in the following quarters.
During the quarter ended at June 32021, we continue to streamlining our business processes to build a very lean organization.
<unk>, where it matters. The most has become our management philosophy that we are relentlessly relent.
Relentlessly pursuing ways to put our operational efficiency.
Let me give you one example.
John that you were seeing it in August of 2019 about three years ago.
At that time, we had approximately 8800 employees.
Today, our employee head count is less than 700.
Just to let you and get an idea of how determined we have been to.
Gain operational efficiency.
Our continued efforts paid off the non-GAAP adjusted loss from continuing operations substantially decreased in this quarter.
For details on quarter ended June 30 fund another one are available in our earnings release, So now I will run through some key numbers all.
The numbers are in RMB, unless otherwise stated.
Yeah.
Transaction volume was 3000.
Elaborate units this quarter compared with 1719 units sold last quarter, and 3967 units sold.
The same here with the last year.
Retail volume was 679 units in the wholesale volume was 2332 units.
<unk>, our retail centers were sold through our wholesale channels as I said earlier, we had to we had to increase the proportion of vehicles sold through.
Our wholesale channels in order to boost the cash to Melbourne.
Total revenues were 278 minutes compared with $196 million last quarter and 62 nearly in the same period last year up by 42% quarter over quarter, and a 348% year over year.
Retail vehicle sales revenue was $92 million compared it was nil in the same period last year wholesale vehicle sales revenue was $177 million.
Gross margin was 4% compared with four 6% in the previous quarter and a negative 28, 4%.
Things here over the last year.
Total operating expenses were 83 million, a 41 million drops from that from $124 million in the previous quarter and a $68 million drop from $151 million in the same periods of last year.
Overall labor cost and expenses.
Excluding severance pay ecosystem by over 30% quarter over quarter, and 72% year over year due to the restructuring of organizations following our business model transformation.
Looking ahead, we believe our ongoing efforts at a cost saving will benefit our financials in the long run.
Non-GAAP adjusted allows from continuing operation, which excludes the impact of share based compensation was $45 million for the three months and.
During the third of 2021 compounded was 98 million in the previous quarter and a 133 million in the same period last year.
Net loss from.
Continuing operations was $15.0 million for the three months ended June <unk> 2021, compared with $133 million in the previous quarter and a $152 million in the same period last year.
Then about our cash position as of June 30th plenty of any one we had a cash on.
Cash equivalents of RMB 124 minutes.
Our financing transactions of up to U S dollars $350 million, we received the first tranche of U S dollars 100 million in July and we are well on track to close the remaining trenches.
That has tons of ours.
Our results for the three months ended June 30th 20 number one.
Moving onto our guidance, we expect our total revenues to be in a range of RMB 310 million to RMB $330 million for three months ended September 30th.
2021.
This forecast reflects.
Reflects our current and preliminary views on the market and operational conditions, which are subject to change it.
That concludes our prepared remarks remarks. Thanks.
Thank you John operator wed like to open the call for questions now.
Thank you.
As a reminder, if you wish.
To ask a question. Please press star one on your telephone keypad and wait for your name to be announced.
You wish to cancel their request please press the pound or hash key.
Once again, please press star one if you wish to ask a question.
Yeah. The first question.
Comes from the line of Eddy Wang from Morgan Stanley. Please ask your question.
Hey, John Hall.
Yes.
In total.
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I'll take that one.
Yeah, the ones you're about to Europe.
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Charles.
Yesterday evening <unk> how quickly.
Quickly Youll auto Michelle folder for challenging yourself.
I'll walk you.
Your final shot.
Let.
Let me translate myself I have two questions first is a little above the shops, and we noticed that the shortage of auto chips.
Quite back to your impact of Chinas, New car sales starting from the second quarter of this year.
Just want to know whether or not.
This shortage of the auto shifting the new car will have some positive impact on the used car.
Number one question.
And the second question yet.
As we know that <unk> as a percent.
Total new car sales in China has been increasing in last few years and we have.
We are expecting that to just a proportionate.
Sir in the next couple of years.
Also want to share your view.
The.
Strong.
Strong sales of <unk>.
Impact on.
The used car industry in the longer term. Thank you.
Hi.
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The comment you want for the future clinical trials or <unk> wishing you broker issue the Eagle.
The team has handled Lindsay vonage, which as you know.
I think in the short term charters.
<unk> has pushed back on.
Got it.
It takes longer for a new cost.
We delivered.
It jumps up car prices.
Our supply of venue cost in the market. Thank you.
Some of the new car buyers may decide to purchase a used car that however, we don't think the shortage of chips will be a long term issue and we'll be eventual.
Yourself.
Similar to <unk> chemical you mentioned Richard.
Richard Greenwood yesterday again Linda.
And then <unk> will go down to about <unk> <unk>.
Ctrip has renewal shooting with ours.
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So obviously they are for the <unk>.
You called out.
<unk> for the <unk>.
In China, John Boucher, Ohio, Tampa treat them within the channel audio book with Shelley <unk> T to treat on technology behind the product.
Well, putting aside the ECL chips supplying the market size of the used car side.
After a rapid growing.
In China the level of car ownership is already much higher than before.
Existing vehicles in the market.
<unk> started to gradually enter the used car market.
Other hand consumers have become increasingly receptive to used.
Carl.
In addition, the industry policies that also become more favorable such as.
Lifting restrictions.
Regional sensors.
Reducing value added taxes on used cars and adopting electronic registration.
This all provides positive.
Tailwind for the divestment of the used car industry.
<unk> gross income going sugarman intellectual within there how should we can we are going to hold our telemetry people buy shelf with agile fourth at our shareholders for Nutri Force.
A shortage of <unk> adoption.
I think between the <unk> volume.
We don't have Covid and Homo platform.
So for US and of course, we focus more on is to deliver high quality used cars and provide a full suite of best in class services from sales delivery to after sales support and therefore create good value for our customers.
And the industry has a hall. Meanwhile.
While we also work hard to control costs and expenses boost our operational efficiency in order to create long term value for our shareholders.
<unk> EBITDA in Q2.
Turning to attrition your shoulder in Shanghai, and Hong Kong, Massimo <unk> associated issue related to cobalt on vehicles.
Thats real Wilmington single function using an English entertainment there are truly ultimate Julian Hellstrom Bogo cycle at the end of <unk>.
Ticketing based <unk> gel for virtual wholesale lending.
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Someone that's been for Belden to lead ultra harsh off of work.
Non Muslim Corporately truth, which I'm going to give you won't you sure than <unk> for example.
For your second question, yes, the sales of new vehicle.
Electrical electric vehicles, having these increased variable Jesse thing in recent years, we have three new energy costs will become mainstream in the <unk>.
Due to market.
After a decade of development using has established a proven and coffee systems that cover vehicle softening infection skills delivery and after sales support.
Have already started to work on specs and standards.
The commissioning process and after sale services for.
For your EV cars.
And we will launch related service soon, especially their use EV cars and inventory only model.
Thank you.
Although the additional work or not.
Okay I appreciate it.
Thanks Harry.
Your next question comes from feedback from Tencent Securities. Please ask your question.
Okay.
When they come out.
Yes.
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Michael will Montreal refinery.
<unk> passion acquisition push them up.
My question niche companies.
Obviously it has been in operation for Aaron.
Halfway here and Youre also received the first with <unk>.
Of the new investments in July it seems like everything goes in the right direction regarding your future plan can you give us some color on Europe.
<unk> woke us and cause sectors to drive sales growth in the future. Thank you.
Although there versus here.
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Sure thing John concentration Ngls out of the.
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140, <unk> hundred <unk> Herceptin in Datong.
According to mortgage loans, our corporate transient history shows the answer that I can do the shorter.
With tissue hotel loan documents, using our local team and keep them going broader to long term bookings.
<unk> growth kind of in a cohort of Colgate that put on the <unk> mammography to treat income media that you shouldnt cohort the controlling stake.
I recall, the multidisciplinary don't think enrollment poultry on the social.
<unk> English, meaning most of the financial jewelry kombucha that.
Before Tonight, we were indeed, and the huge capital constrained as a result, we were in.
Enable to procure vehicles on a large scale LNG carrier.
Carryout the conditioning and our inventory after the founding working today.
Our business has recovered immediately now both our car procurement.
Capability and production capacity are picking up rapidly.
Fully in line with our expectations.
Yes.
We continue to improve our product and service capabilities in light of the increasing inventory July customer demand will naturally bring more sales conversions, we will further expand our production capacity and increased inventory so as to provide customers with more selection.
<unk>.
Well with the improved reputation among customers our Iot regional influence. That's also enhanced in addition graduate increasingly customers Zephyr rate will also drive high quality sales growth. Therefore.
The flywheel effect.
Our entire business model those accurately.
Drive our business growth.
Women's ICM, Paul abandoning those rfps and are more should we use on mobile building sounds intriguing truthful Youtube they listen to the digital arena.
The electrical issue, Jonathan I'm using that yield to Chicago, you can relax pneumonia.
Don't you have a crucial fashion attributable to clarity memos review in Europe on four.
$4 million that hopefully the yield.
Hi, Sheila.
After nearly a half a year of operation in <unk>, our operating model has matured and is ready to be replicated.
Going forward.
In addition to continuing to strengthen using influence and competitiveness in existing <unk>.
Within our market.
Also per capital to invest in Rfps and more new agents to promote our business expansion.
And in addition, our business <unk> will also.
Profit soon.
Probably that answers all paid off.
Thank you.
Okay.
Once again, if you wish to ask a question. Please press star one on your telephone keypad.
Yeah.
Yeah.
King.
There are no further questions on the line I would now like to hand, the conference back to Cheyenne Sue Please continue.
Thank you again for joining today's call and for your continued support of <unk>. We look forward to speaking to you again soon in the future.
Oh I see.
Bye bye thank you goodbye.
Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.
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Thanks.
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[music].
Ladies and gentlemen, thank you for standing by and welcome to use change earnings conference call for the quarter ended June 32021.
That's fine all participants are in a listen only.
After managements prepared remarks, there will be a Q&A session. Today's conference call is being recorded if you have any objections you may disconnect. At this time I would now like to turn the call over at their house.
Today's conference call Ms. <unk>. Please go ahead ma'am.
Thank you operator, Hello, everyone will come to you since earnings conference call for the quarter ended June 30th 2021 on the call today are BK, although I'm, the CEO and Jon <unk> CFO DTA 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.
Before we start I would like to be in my view that this call may contain forward looking statements made and to the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.
Does this take months are based on management's current knowledge and assumptions about future events that can walk known or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward. Looking statements. You are seeing does not undertake any obligations to update any forward.
Statements, except as required under appeal.
Oh law for more information about potential geeks and uncertainties.
Please refer to our filings with the SEC with that I will now turn the call over to our Seo Teekay. Please go ahead Sir.
Sure.
We're looking at.
Uh huh.
Think of it how did your guidance if somebody who's gone to figure that out.
Now on the table.
Yes.
One being more meaningful black.
Well, what we're going to initiate additional accretion for you in my book.
Hello, everyone.
Thank you for joining our earnings conference call today.
Better communicate with both domestic and international Laughter's My prepared remarks, they will be in both English and Chinese.
On a more timely and that EBIT do what you just said.
Yeah Yeah.
Maybe.
Sure.
Could you tell me what your dual thanks, Shawn for the two you got to move quickly should hold on Dfc dollar here Shawn Hall.
We did not understand.
With that.
Jonathan.
Christian issue on the painful to Jamba, you'll call yet nothing much else these interactions.
Some of.
PD one that introduced you won't go ahead, and just don't have jobs.
Oh sure.
Please refer you in Charlotte, which we will continue.
The increase was all about stability.
The first quarter of fiscal year 2022 which ended on June 30 was one of the most challenging quarters, we've experienced over the last.
And a huge capital constrained and yet this is gross income.
Can they managed to deliver solid results. Despite all the challenges and achieve sustainable growth in terms of revenue and sales compared with the previous quarter and the same time, we continue.
Team efforts on cost and expense control and our operational costs.
Sorry, our personal loss substantially decreased in the quarter.
No it should all titled Ginger, probably are in the Ukrainian in EBIT due to Brexit.
Jack I'm sure to answer that your production.
To do so unusual.
Thanks, sure we showed again.
<unk> got one more.
Hi, Ashwin, who from private social itself.
Actually achieve from Anita tissue figure it increases the likelihood that Youll go through June the IRS, even more share allocation.
In the first quarter of fiscal year 'twenty can be too.
Although we were only able to maintain our relatively small retail inventory due to cash constraints. We still achieved two he has a fundamental capability.
Consulting you're conditioning dose and delivery Oh, the progress we achieved this quarter has built a solid foundation for our.
The business expansion and the reputation of the NRC model.
That's a true for me and a woman tissue, including Europe, the blended chemical Nintendo increasing Mou easing back or even core so that's.
I'm going to come out of Europe.
Globally in the Bakken, we allow for broken the broader.
Future take out Australia.
Political softening, we continue to extend to offer screen of our used car acquisition network for inventory only model are solid blending and strong supplier changes sources with both individual owners and car dealerships have enabled us to.
Just more high quality used vehicles at reasonable prices.
Thanks, Eric.
Trillium refunds in Louisiana from Shanghai tissue found one or two weeks.
I'll put them to Europe on the IRC, the two beta interim northern Charlie actually delivering on page <unk>.
So we shouldnt.
Yeah.
I'm going to leave that team.
Okay. That's helpful.
<unk> been seeing the Frankel group CECO bulking gotta be bolt into the Eagle Ford.
In terms of car reconditioning capabilities.
We continue to refine the whole process.
Thank you my standardizing entry and procedures.
Improving slowly efficiency between key staff upgrading equipment and technologies and optimizing staffing in the production lines. After several months of operation the cocktail hour recondition vehicles ASP.
Exam does have some enables us to offer a stable supply of high quality and the value for money card for our customers.
Okay, social social for the NGL new zone within the.
Didn't hold all with Congress Johnson nutrition.
Zero.
And Jim should.
Fully Vodafone quick since you shouldn't put on guidance, which I'll talk about Europe.
Got onshore for Google under the Covid yet.
<unk> fusion of ultrasound with our approval Trisha they didn't call and if you could unpack protects will receive all our fishing fleet.
How many vehicles fully electric excuse me at all in fact, if you can put them.
Yes.
Thank you.
Corporate and other costs.
Two women tissue put option agreement adhesion.
Shown on the tissue.
Awesome.
In terms of vehicle sales and after sales services, we remain commitment committed and focused on creating long term value for our customers with serious may follow up on coffee.
The feedback and continuously improve each step of the customer experience from sales delivery to after sales support Europe.
Walter <unk> net promoter score or NPS increased to <unk> 40 for the continued improvement of NPS has also enabled us to achieve.
<unk> mobile conversion, despite relatively small retail inventory.
Give us gives us great confidence to continue to scale our inventory in Brazil.
She is in their needs without really a form of whole foods.
Goodbye year window.
We will go through the financials.
Well I'm sure was in third quarter.
A quarter later than normal corporate computers and coming into Houston for.
Tristan ruminant or download them crazy looking broader including Twilio carefully look at offering broader solutions.
Yet, we believe that our controlling shareholder.
After receiving the first tranche of the news last month in July.
Our business has been recovering as expected and granulate, assuming two high quality growth momentum with scale up our operations in St. S that vehicle softening reconditioning capacity and offline showroom expansion.
And these three key areas helped increase al.
Hi, ratable for sale inventory. This offers our customers more selections and helps build a better experience throughout the car purchasing journey and does bring higher sales conversion.
Concrete on the IRC the two big we believe using.
<unk> I know you usually of course.
I'll leave them for doctoral mechanical will be adequate holds the archer even viewpoint.
All the way back to the.
GAAP income potent hole temperatures Union Tribune without schlemmer architectures.
We do have the ocean in Israel, which people look ultra longer trembling.
And also to increase inspection and reconditioning capacity.
What are you seeing a long run using and council country governments of course basically has recently entered into a strategic partnership to jointly Joaquin and bill would've used car inspection and reconditioning plants with a total investment of up to two.
$7.0 billion.
Capacity is expected to have an annual production capacity of <unk>.
<unk> thousand to 100000 vehicles. Once it is in operation. This production capacity will provide <unk> with a stable and lot supply of high quality of used vehicles.
In the coming years.
Yes.
<unk> tissue transition challenges.
When we go through the triangle.
Do you want to lead you to triple trading shareholders.
Patient tissue Athena assume transaction.
Going forward, we will continue to provide high quality products and services to our customers.
Sales conversion.
I will now strong supply chain capabilities and delivered steady sales growth and a higher return.
Come onboard shoot at your original haul sugar should only a mission here.
Our goal for engineering.
Baidu Nuomi, if English all digital Europe, Australia, and the things you have done Vishal Shah.
<unk> mission engine, when we trimmed our.
Jim.
You'll find that.
Jason Miele, Tien Shan Cooper Judge recommended.
General industry issues Yan chicken Lucia.
I will mention that towards the high single or dual selling essentially fund central African trade.
I'm going to hold that view hasn't changed.
This year over year and to my left for you Richie <unk> with whom we.
With new machines and emotion.
We're trading from the Oklahoma jumping from CGM.
CGM conversion Hydro project.
This year marks using <unk>, 10th anniversary, which we just celebrated our September.
In the past decade, we have experienced both exciting and top times using has become stronger because of all of the challenge we have overcome as one team. It all started with the mission to make it easy to average Chinese customer on Apache used vehicles.
Now this is the solid foundation that drives our passion to provide customers with high quality and value for money used cars and best in class services, we are confident and determined to continue contributing to the long term healthy development of China's used car industry.
Although within India.
So that's really how digital our munis, therefore, Jacques Diouf insurance companies.
<unk> please.
With that I'd like to turn the call over to our CFO to walk you through the financial results John.
Okay. Thanks, Dk Hello, everyone. Thanks for joining us today.
I think I just mentioned we had a very.
June quarter on book is this operation and the financial resources for the quarter ended the joined the <unk> 2021.
As you all know we announced our agreement into a binding investment a term sheet on a per the first now we received the first tranche of the financing on July 12, therefore from the April joined we were.
<unk> on IRC business with very limited resources. However, we still managed to deliver continued growth in terms of both the vehicle transaction volume and the revenue.
To achieve the above progress with spend a tremendous efforts to leverage our capital efficiently.
Our team has successfully.
We're running a effective car sourcing channels channels with strong supplies. However, we were able to maintain our relatively small retail inventory <unk> Iot because of capital constraints.
For the balance of the car sourcing supply on our cash capacity, we increased the percentage of vehicles sold through our wholesale channels.
Pivotal quarter ended during the third late 2021.
The closing of the first tranche of the financing transactions in July 7th substantially improved our cash position and the ability to expand the business.
The daily car reconditioning productivity of our XI on IRC was more than doubled and we've.
For the period up retail inventory rapidly.
We expect the company's performance to continue improving in the following quarters.
During the quarter ended June 2021, we continue to streamlining our business processes to build a very lean organization.
<unk>, where it matters the most has.
We've got our management and the philosophy that we are relentlessly relentless relentlessly pursuing ways to put our operational efficiency let.
Let me give you one example.
Hi, John that you assume it in August of 2019 about two years ago at that time, we had approximately 8800 <unk>.
Become.
Today, our employee head count is less than 700.
Just collection does get an idea of how determined we have been to gain operational efficiency.
Our continued efforts paid off.
Non-GAAP adjusted loss from continuing operations substantially decreased in this quarter.
For details on our quarter ended June 30 funding under one are available in our earnings release. So now I will walk through some key numbers all numbers are in RMB unless otherwise stated.
Transaction volume was 3000.
<unk> units this quarter.
Compare that was 1719 units sold last quarter and 3080.887 units sold in the same period of last year.
Retail volume was 679 units in the wholesale volume was 2332 units.
Vehicles that would be enough.
Our centers were sold through our wholesale channels as I said earlier, we had to we had to increase the proportion of vehicles sold through our wholesale channels in order to boost the cash turnover.
Total revenue was worth to 278 minutes.
Hello, with 196 million last quarter.
Our retail and fixed to nearly in the same period of last year up by 42% quarter over quarter and 348% year over year.
Retail vehicle sales revenue was 92 million compounded was nil in the same period of last year wholesale vehicle sales revenue was $177 million.
Gross margin was 4% compared with four 6% in the previous quarter and a negative 28, 4% in the same period last year.
Total operating expenses were 83 million, a 41 million drop from that from $124 million in the previous quarter.
A.
$68 million dropped from $151 million in the same period last year.
Overall labor cost and expenses, excluding severance paid decreased by over 30% quarter over quarter, and a 72% year over year due to the restructuring of organizations following our business model transformation.
<unk> agents.
Looking ahead, we believe our ongoing efforts and cost savings will benefit our financials in the long run.
Non-GAAP adjusted allows from continuing operation, which excludes the impact of share based compensation was $45 million for the three months and.
During the third of 2000.
Information from Tyler was 98 million in the previous quarter.
133 million in the same period last year.
Net loss from continuing operations was $15.0 million for the three months ended between the <unk> 2021 comparative was $133 million in the previous quarter and a 152.
In the same period last year.
And about our cash position as of June 30th.
200, and the one we had cash cash equivalents of RMB 124 minutes.
Our financing transactions of up to U S dollar $350 million, we received the first tranche.
2 million U S dollars 100 million in July and we are well on track to close the remaining trenches.
That has tons of our results for the three months ended June 32000 number one.
Moving onto our guidance, we expect our total revenues to be in a range of RMB 300.
<unk> 10 million to RMB $330 million for three months ended September 32.
<unk> 2021.
This forecast reflects our current and the preliminary views on the market and operational conditions, which are subject to changes.
That concludes our prepared remarks.
Remarks thanks.
Hundreds of thank you John operator wed like to open the call for questions now.
Thank you.
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Your first question comes from the line of Eddy Wang from Morgan Stanley. Please ask your question.
Hey, John.
So she has come about yet.
Okay.
No.
Got it Alright Association.
I'll take that one.
Yeah, I'm glad you asked about Piedmont.
You don't want to do so.
Since it's a contract machines or social with the Sahara. So kind of all Jim go ahead, you guys show some cash at that time that you would see in Hong Kong and Geophysical boycott.
You too.
Yes sure.
So just <unk>.
These are still kind of chunky Shah <unk> Khan Dolce Vita Jake.
So I'm trying to ask.
Turning toward the results you see.
Sure.
Charles.
One just with Beijing auto.
Old shortage.
Outside of Hong yet, where Youll Andre Michel order push out of yourself.
I'll walk you only you find Asia let.
Let me translate myself I have two questions.
It's a little above the short term, we noticed that the shortage of auto chips.
Uh huh quite back to your impact.
What did you call club to China, So new car sales starting from the second quarter of this year.
So just want to know whether or not this shortage of the auto chips in the new car will have some positive impact on the used car.
Number one question and the second question with that.
As we.
<unk> as a percentage of total new car sales in China has been increasing in last few years and we have we are in.
Spectrum is a proportion of wheel.
Further in the next couple of years, so just want to share your view.
The.
Strong revenue strong sales.
You know that.
Its impact.
The used car industry in the longer term. Thank you.
So that kind of granularity.
Hello.
To give you a clear no luckily data.
<unk> CGM.
And in NPS.
Shall I call it a season doesn't shouldn't be an.
So youre talking about <unk>, six which also with <unk> capital.
<unk> for the gourmet food Ashish, hoping you could touch on control.
Sure enough.
The issue though.
The membership and Wichita.
I think in the short term charters.
We shall see.
Has a pristine is back on.
Non-GAAP.
It takes longer for a new cars to be delivered.
This chopped up car prices.
Appliance menu, causing the market to reduce.
Some of the new car buyers.
I'm just trying to.
Purchase a used car that however, we don't think the shortage of chips will be a long term issue.
Ill be eventual soft.
Similar to <unk>.
Sure.
Yes sure.
Linda you may begin.
And then June from bolt ons that superbowl at Yamana tremendously.
To measure new shooting with ours.
Sure.
So I'll leave it there for the <unk>.
Recall that nothing new to <unk>.
So I'm wondering triple that would eat challenge, which has in China, John Boucher on Ohio, <unk> Chandra Alex calling over to Shelly <unk> Doshi, VAT TT trade on $10.
Sure Carter.
Oh, well, putting aside the issue of chip supply the market size of the used cars.
Also rapid growing.
In China the level of car ownership is already much higher than before.
In vehicles in the market.
Started too.
Behind me and to the used car market.
Other hand consumers have become increasingly.
Access to used car.
In addition, industrial policies that also become more favorable such as.
<unk> restrictions cross region sensors.
Youre seeing value.
Taxes on used cars and adopting electronic registration.
This all provides a positive tailwind for the development of the used car industry.
Okay.
Ill take the CGM, Doug Shulman intellectual ones in there how should we think are going to have that trend in the future.
That's helpful.
Adequate inventory for Dol.
The challenges of operating.
Is that accurate and all of our group, which will include a hockey volume show.
They could offer COVID-19 internal platform.
<unk> four orders in the fourth we focus more on is to deliver high quality used car and provider for sort of best in class or system sales delivery.
Oh sure after sale support and therefore create good value for our customers.
And the industry has a hall. Meanwhile, we also work hard to control costs and expenses boost operational efficiency in order to create long term value for our shareholders.
Glen EPR the ebay to win.
Okay.
Sure.
Sure sure sure shutdowns Shanghai not require maximo ninety's role associated issue related to cobalt on vehicles that real well.
We don't consider using.
Using the <unk> 2 billion held around Bogo cycle at the end of <unk>.
Yes.
Significant social gel for virtual.
Hello, Andrew.
You said that <unk> been getting them through it.
One that then for Belden to lead Ultra Hirsh of war Memorial, possibly truth, which I'm going to give you a tissue wasn't really looking out for example.
For your second question, yes, the sales of new vehicle.
So electric vehicles Hutton.
So for this very rapidly in recent years, we have three new energy cars will become mainstream.
Due to market.
After a decade of investment using has established a proven and cognizant that cover few vehicle softening infection skills delivery and after sales.
<unk> cost.
We have already started to work on specs and standards.
In addition in process in our fiscal third this for your EV cars.
We will launch related service soon, especially their use EV cars and inventory only model.
Thank you.
Although Eddie.
We'll support open up.
Okay.
Yes.
Eddie.
Your next question comes from feedback from Tencent Securities. Please ask your question.
Okay.
Now Keith.
Yeah.
<unk> yeah.
How do you view sequential month over time.
Time to add those that's now.
Gotcha Gotcha.
Yeah.
Michael will then carry all the time.
Freedom failure and pass them up with inflation.
Up Covid Peeking my question.
For those companies.
It has been in operation.
Halfway here and Youre also received the first tranche of that.
Investments in July it seems like everything goes it goes that direction regarding our future plans can you give us some color on your strategic focus on our core sectors.
To drive sales growth in the future. Thank you.
Although there is as yet.
Sure thing John concentration and built out of <unk>.
How about women with a short for the interest income could trend.
Already holding <unk> growth through to the conclusion to that honestly and a bunch of short term memory.
For China quite sufficient opening for gold.
140, <unk> haven't seen herceptin and Ghansham.
Let's move on to our corporate kind of in the future to answer that I can do that.
Real quick you should put along down that you use in your outlook. When you can bring border truncated broke an all new <unk> growth.
Hum.
In a cohort of Colgate that put on people mammography to treat income media that you Shouldnt cohort.
I recall the amount you could I know you don't think enrollment poultry on the social.
English only most of the finished jewelry from each of them.
Before Tonight, we were indeed.
Third capital constrained as a result, we were in la.
<unk> to procure vehicles on a large scale.
Carry out the conditioning and our inventory after the founding looking today, our business has recovered in Egypt today now both our car procurement.
Our capability in that product.
And as you can.
<unk> are picking up rapidly.
Fully in line with our expectations.
And.
We will continue to improve our product and service capabilities in light of the increasing inventory to our customer demand will naturally bring more sales conversions, we will further.
Production, our production capacity and increased inventory so as to provide customers with more selection.
Meanwhile, with the.
<unk> reputation among customers.
Is regional.
For us that's also enhanced.
Graduating Christmas.
Bessemer Zephyr rate will also drive high quality sales growth therefore.
The flywheel effect of our entire business model will definitely.
Drive our business growth.
Women's ICM policy.
Rfps in a more should mean, some global build resiliency, which we can squeeze.
Now Youtube Facebook withdrew the difficult winter.
The electrical issue Ghansham using that Youll Ashish.
<unk> Nomura.
Actual inventory would hold largely not preview with squadron.
And in fact, hopefully the yield.
Hi, Sheila.
After more than a half a year of.
We're lucky in <unk>, our operating model has matured and is ready to be replicated.
Going forward in addition to continuing to strengthen using influence and competitiveness in existing.
Given the market. We are also prepared to go to Latin America.
New regions to promote our business expansion.
And in addition, our business income there will also kick off soon.
Part of that answer is oilfield oxygen.
Thank you.
Okay.
Once again, if you wish to.
In more of a question. Please press star one on your telephone keypad.
There are no further questions on the line I would now like to hand, the conference back to Michelle Jan Sue Please continue.
Thank you again for joining today's call and for your continued support and the new team. We look forward to speaking to you again soon in the future. Thank you.
Bye bye thank you bye bye.
Sure.
Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all of.
Okay.