Q2 2022 Uxin Ltd Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to <unk> earnings Conference call for the quarter ended September 30th 'twenty 'twenty. One at this time all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session.
Today's conference call is being recorded.
You have any objections you may disconnect at this time.
I'd now like to turn the call or what do you host for today's conference call with twice a day.
Are you a director of the company Pease go ahead Mike.
Okay.
We are facing a technical difficulty with our speaker line kindly hold on until we address the situation.
[music].
Ladies and gentlemen, thank you for standing by and welcome to <unk> earnings Conference call for the quarter ended September 30th 'twenty 'twenty. One 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 it.
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 Ms. Joy, Zhang IR director of the company. Please go ahead ma'am.
Thank you operator, Hello, everyone and welcome to <unk> conference call for the quarter at September 32019.
Right.
On the parts of the day I became CEO.
He joined me at all.
He he can review business operation.
Highlights followed by Jos who will discuss financial financials and guidance.
Both be available to answer your question.
No problem.
Before we start I would like to remind you that this call may contain forward looking statements may I'm in our safe Harbor provision of the U S. By basically litigation Reform Act of 19 Nike.
These statements are based on management's current beliefs and assumptions about future events in both knowingly or unknowingly.
At least could cause actual results could differ materially from there into forward.
Forward looking statements.
He or she does not undertake any obligation to update any forward looking statements.
As required under applicable law.
More information about it potentially.
Please refer to our filings with the us.
Scott I don't know spend a whole lot to our C O N E.
He told me Bill.
Have you all seen clinically.
So you should see a minute.
Okay.
Young women.
Well look on behalf of local anyway, I told you that the Antonio well density assumed from them in the future.
Sure.
Hello, everyone. Thank you for joining our.
To date tobacco communicating with both domestic and international and back to my prepared remarks today will still be in both English and Chinese.
Turning our opinion.
Hey, Jason.
Our union the geology.
Well Meredith tissue about should I surely I'm sure the Wimbledon.
Hello, Matt says about her let me get the numbers.
She didn't truly are you still are plenty of them.
Sure.
In the second quarter of two.
2022.
At September 30, we maintained solid growth in terms of volume.
Total transaction volume in the quarter with 3648 unit, which.
<unk> of 21% compared with last quarter. The retail transaction volume was $1 27 billion, an increase of 51% compared with last quarter.
So a couple of COVID-19 shown on that <unk>.
Look we bought well.
Orlando cohorts ingredient.
The issue for that utilization, but if you do.
Hopefully you should single MKS duo Fu Sheng.
John that's either way.
Well the reason that the ambitions EPA that wasn't the champion with J P.
With that let's see how they utilize through we all go trickier inbuilt youll coupon COVID-19 or Trump tweet them go down the shorter than that.
Sure.
Our reputation in passing that our consistent efforts to improve vehicle quality and service.
Ask Jeremy to read out in the quarter, our net promoter score or NPS increased for the fourth consecutive quarter to Covid T cell immune record high.
42 in the previous quarter going forward, we will continue to optimize and upgrade the quality of our treasury services in order to provide best in class one stop shop for KC three.
To our customers and drive high quality sales growth through positive word of mouth.
She will let you will find them.
Yeah, IRC Moshe Importunity to shop.
<unk> continues to exceed all of the are they using the IRC.
How do we choose search from borrowers, which all you don't see that achieve she donations sure why do we see her shopping pattern III part of that future.
Well, then Pierre and I are available.
Charlie or put onto Johan.
Yeah, those comparisons when we introduced <unk>.
So we couldn't agree more.
We can't hoping RFP paas or trailer.
Yeah.
Hungary, what how good real hallmark Bouchard, who are either a good interesting.
We will many children would be not a theatrical Gemini trial, how they manage home federal usually the adult <unk> Pinnacle foods Egencia Dolby CMO triangular team, but if you go to the woman the Trillium team.
Central shelf.
Yes.
Not only good for us.
The industry fee that omnichannel differential widening to shallow that we would have.
Got it.
<unk> rule.
Sounds good.
Sure Howard.
Ours, which was getting back to the museum debates Heiko with Jennifer Hudson Bay, John Sure sure Matt Sure Jonathan you should at least self hatred shortly.
We completed an important milestone in our business development in that November is our <unk> successfully launched in London.
We launched our second IRT and currently unemployed probably each.
China has the largest amount of used car transactions.
Probably one of the fastest growing area for us.
Consumption in the region.
No all of our second Iraqi currently.
A key strategic back in our BCP expansion.
I think one of the e-commerce I'm talking about.
About 100000 square meter with a warehousing capacity of up to two darker vehicles.
The combined number of vehicles available for sale, even though today, it's roughly 101500, having 52 brands and a large collection of economy and luxury models.
As far as we know this is a large oh used car IRT in China.
You too.
I can definitely I think domestically our improvement.
Yeah.
E self menu quality operational management and servicing system.
Since we began operating in mid November the new quota as he has been very steep amount cockpit.
Call quality and 70 Covid.
The vehicle sales volume has been badly week over week.
When the construction is fully complete at this point the ISC will be one of the most advanced use of crop protection center that feature streamline operation automation digitalization and business intelligence it will be a one use copper chief destination.
Operating vehicle acquisition east fashion refurbishment demonstration cell and ourselves.
That's really awesome in.
Women's entre and put them into individual.
Vocal but anyway, it all goes well.
Well I mentioned that my understand a woman listen again totally on the TCE Tien Chau.
<unk> heard a trillion Gen school to.
<unk> you mentioned the shelf agent he won't go Keytruda harsher ctrip users.
Using the <unk>.
Generally using that May last and when you introduce to that that I come to a different viewpoint.
Yeah. She won them can deal with massaro truly Newtonian at Huntsville encourage.
So it's it can be.
Listen we are a treasure trove of equivalent project switching towards utility acquisitions.
In terms of retail stocking, we have suspended our pool vehicles to equal leading domestic and fully electronic vehicle brands.
We are building our EV business operates by establishing multi channel, especially standard and refurbishment process, especially designed for elite.
This will enable us to provide high quality and reliable use EV to our customers.
We believe this will provide new growth drivers, where youre seeing either coming area of electric vehicles.
Meanwhile, we also hope that we can leverage our extensive eat fashion, a reconditioned and ability to drive the healthy development of the youth EV market in China.
The challenge for them yet.
Andrew well done on your part, but once you should you shouldn't compare funded assault.
It's more of an Italian she managed on a go through our hotel Jean-bertrand fiduciary pvt, and made sure that from that.
And then who were born in looking at the U R. G laser Trillium Paas will be finished.
<unk> what would you call.
Do you have in your model to rebuild it.
I mean look we Mohan.
Diligently to roomba.
Sylvia you couldn't EBITDA, because I'm married our golf into the Twilio Who's here with me at that guys into BT for questions. You can be sure. They told me in <unk> syndrome in Italy.
Giambi pendulum sugarcoat things always will fail.
You won't see an RFP to either <unk> or <unk>.
<unk> three children baby.
Sheldon do you with your home.
In terms of vehicles the conditioning capability.
Continued to optimize and streamline our work processes to improve.
Quality and efficiency based on our market research majority of used car dealers in China only offer very limited or the most basic level of reconditioning.
Before starting the vehicles to customers.
You'll see we have accumulate integrated database of refi reconditioning centers and processed through use of operation.
We can utilize our scale advantage in procurement to optimize reconditioning costs and can offer our customers high quality vehicles.
Our active clients.
Meanwhile, we are actively in that E reconditioning equipment and technology to further boost our efficiency.
Well the AIC are at about every time and cost required to reconditioning of crop decreased more than 50% compared to the town Center here I asked me, what's Jack launch.
We will continue to focus on improving every business process to strike a good balance among quality cost and efficiencies.
CTO women at the argue we've looked by a single way both for John <unk>.
<unk> put our turnaround cycle, if you go to <unk>.
Collision between intangibles assemble them yet.
<unk> unitholders with Johnson <unk> funeral portfolio reshuffling that I couldnt do that trailing commissions, which you switched over to local and Ikea.
Thank you.
We have close part of the second tranche of the financing transaction ahead of the original scanner.
Our development plan, we know San Diego acquisition.
Finishing capability.
And optimized supply chain.
Many of these key areas will enable us to increase available what's not imagery and further improve the competition is doing.
Our economy.
So it wasn't very potent sure Coco hopefully Luigi literature, <unk> also shown here I'm going to move the whole foods, you typically see governmental institutional mutual Omaha, while Michelle for the hydrocodone.
<unk> priority, which will feature the junior enormous amount of CGM.
Well not quite as you undoubtedly know front I understand its interest Henry who will then be switching tomorrow.
Jim on the phone itself.
We project the assumptions, we have on the protocol for that Delek <unk> Tyler.
Bob.
Finally, I would like to once again, thank our customers and shareholders for their continued support and our team for their hard work and dedication.
We'll be a long and fruitful journey.
We'll have a long way to go the smooth operation of the C. I asked me over the past six months and the newly launched broker has given us great confidence in our business.
Billings for which we.
We may committed to our current development direction and contribute to the long term and healthy development of this tiny used car industry.
I'll leave more of our efforts and investments today will pay off in the future.
Although some of the seating therefore genre. It is open due to the us housing market risk.
With that I would like to tend to pull over to our CFO Jon to walk you through the financial results. John. Please go ahead.
Okay. Thanks, Dk Hello, everyone. Let me walk you through our financial performance in the quarter ended September <unk> two.
2021.
The business was growing steadily in this.
Growing steadily in this quarter, we started to increase our available for sale inventory <unk> on IRC. Since we received the first tranche of the new investments in early July and they reached the full capacity at around 600 cars in mid August.
The improved inventory level enabled us to ramp up our retail sales of audio radio volume increased 51% quarter to quarter.
Overall sales volume increase of 21% quarter to quarter.
As a result, our revenue has increased by 24, 5% compared to last quarter.
And while we spend a tremendous amount of efforts to minimize our cost and expense structure build a lean organization and to drive efficient operational processes.
The impact has been reflected in our continuous improving operation logs.
One thing I would like some commentary specifically is.
The fair value adjustment impact of the issuance of senior convertible preferred stock as a result of our financing deal with Neil capital and <unk> capital.
Because the stock price rose significantly since the company announced entering into a binding term sheet with these two investors on April 1st of 2021.
To a paper loss of RMB $1654 9 million.
RMB or us dollar 256.8 minutes.
Which impact the net profit.
This loss is purely driven by accounting treatment.
Cash item and has no impact on our cash flow and it is not related to our business operation.
With respect to their financing transaction was Neil capital and the capital that we announced earlier as part of the second closing of a U S. Dollar 50 million. We have received U S. Dollar 27, 77 5 million cash.
Schedule.
We expect to receive the remaining U S dollar $22 5 billion in the coming months as planned.
As D. K said earlier, we will leverage the capital it took to continue investing in key business initiatives, including increasing car inventory optimizing reconditioning technologies and our supply chain.
To drive further high quality business growth.
As we announced earlier he was gonna has been included in the MSCI Global small cap Index, China Index effective on November.
101.
This is the first time that <unk> has joined the MSCI index.
We see this as a recognition of a <unk> business performance and of China's used car industry potentials.
They use the vehicle industry in China has huge opportunities and we believe using is well positioned to lead a dynamic growth of this promising market.
Full details of the quarter ended September.
So this 21 are available in our earnings release, So now I will run through some key numbers all numbers are in RMB unless otherwise stated.
Transaction volume was 3648 units for the three months ended September 32021, compared with 3000.
And 11 units last quarter and the 2653 units in the same period last year.
Total revenue was RMB 345 nine.
$9 million for the three months ended September 2021.
Canada was RMB $277 8 million last quarter.
RMB 76.
$4 million in the same period last year.
Gross margin was four 2% for the three months ended September.
2021 comparator was 4% in the last quarter and an active and inactive 22, 4% in the same period last year.
Our loss from continuing operation was RMB $45 9 million for three months ended September took a splendid 91.
<unk> was RMB 57 million last quarter at RMB 160 <unk>.
Two 6 million as compared to last year.
The non-GAAP adjusted loss from.
From continuing operation was RMB $43 2 million for three months.
In this quarter.
Compared with RMB 44 six.
And last quarter, and RMB $178 3 million in the same period last year.
Okay.
The fair value impact of issuance of the senior convertible preferred shares resulted in a loss of RMB $1634 9 million.
The three months ended September 32007 as discussed earlier.
The impact was mainly due to the us a significant rise in our stock price since the company announced a press release about entering into the deal.
And felt that impact was.
Non cash charge.
Driven by this not the loss from continuing operation was RMB $4714 6 million for three months ended September <unk> 2021.
<unk> was RMB $258 9 million in the same period last year.
Removing the fair value adjustment impact the non-GAAP adjusted net loss from continuing operation was RMB $56 9 million for the three months ended September 32021, compared with RMB $274 6 million in the same period last year.
Then about our cash position as of September 32031, we had a cash and cash equivalent of RMB 236.
$6 million.
Moving to our moving onto our guidance.
We expect our total revenues to be in the range of RMB 480 million to RMB 500 minute.
For the three months and ending December 31st 2021.
This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to changes.
This concludes our prepared remarks.
Yes.
Yeah.
So operator, we are ready to receive questions. Thank you.
Suddenly Sir ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel their requests they can press the pound or how should once again. It is star one on your telephone keypad to ask a question. Please note there might be a slight.
Paul does relate the questions.
We have the first question is coming from the line of Fei de <unk> from <unk> Securities. Please go ahead.
Hum.
Well they've been T shirt.
Oh sure.
Yeah.
Teachers, who shall not stupid.
I can well naturally without going through it will be done that C Corp. She got here.
Yes, you're going to return to their usual that's one thing that people like Peter beauty English that seem to like your children.
Sure.
There you will find out cause you to say that she truly show you won't but I think it was like yourself.
Keeping my question in English judging from the financial situation of the last quarter, we noted that so wholesale vehicle business.
Contributed more revenue towards the overall performance of the company Treasury bonds. This culture. This propulsion is being filter all my stuff.
How does the company understand the development of our business and what will be the impact on retail vehicle business into the future. Thank you.
Yeah.
Hello.
<unk> you mean.
<unk> Leach meaningful.
Zalviso development full wave hospital, so George Hu.
The cushion for all.
That is when we finished Q1 on a comment you guys feel you woman Tom be tissue mutual Kuwait Ashish.
Shall we look home to transportation and enjoying what we want this angela and the showroom Lee our CFO.
Partial accordingly.
So what we should buoy paas soil.
<unk> Szabo Tonight, there, good and truly honor doorjamb boudreaux Hodgkin wasn't unusual for them.
Due to the highway you both on the payable for women the mutual Goldman not to control. It on the Hunter woman sugar being honest with you that now you shouldn't neither cheap.
<unk>.
While no one machine.
<unk>.
And you see them kind of meet their stocks breakdown between our rig count in the wholesale business wanted to even our brand impact and market reputation many customers come to us to start being used vehicles.
However, currently we don't know all the used cross sourcing from EW car owners through our retail business with a few reasons.
But we have to consider the base capex capacity. Meanwhile, he would like to control the level of cash tied up in our inventory also it takes time to increase our sales capacity, therefore, but the comp they are not up to our retail centers and dose the IPO our inventory capacity.
Now through our wholesale business and accelerating our inventory turnover rate.
Okay.
Thank you for your.
Okay. My time for CMS comes into those in Korea, Italy, mutual who control those from Hudson The initial shutdown nutrition leader Tonsillolith neutral.
What you're seeing is the RV dealership.
Number two neutral to you without a piece, where you have a domino effect.
In the long run this percentage breakdown will gradually changed as.
Our retail inventory level gradually increase under her feet.
I actually had both be in operation.
Our retail sell through for sure a flatter decline.
The tax rate down to can we count and of course got to be one to be used for what I believe we've made we count those as.
It will be twice as much as a wholesale sale.
Yes.
Although our tissue.
Yeah.
Yes.
But you shall be closer than I expected.
We have the next question. This is coming from the line of Jay <unk> from China Securities. Please go ahead.
I don't think about what's getting you got a bunch in English.
Yeah.
So the Queen Gotcha.
Shape.
Okay.
Dan why don't you take it.
Sure.
Ill take a shot.
Most of those are the guarantor or yes.
Oh sure Chuck why don't you guys just given their language.
Yes.
So that's how that works.
Yes.
Yeah.
Sorry, sorry could you. Please repeat your question in English.
Okay. Okay.
Okay.
I have two questions first of all is well.
No that's false.
Could you see the impact of the fed.
Fair value change for the better.
That loss.
The second question.
Our cash flow.
What's the expectation for the following quarter cash flow.
Okay.
Okay.
To my left without a whole ching.
Just I mean, when I find stuff right now so we should not.
Ah well in particular as a fair value adjustment. The one that's actually going to come out with me, it's not just China not to go through with the opinions, how Joe Coppola muscle now that Jose.
Wait I suppose you had said that sandy.
Welcome to the Cherokee through some Gwen.
<unk>.
Women.
Tom and Joe sure can go to the telephone Jehol Nook without Pfizer on the P&L.
My purpose ship without a passionate 30000 tons.
<unk>, so you're not showing you grew up quite a bit 40, China John.
The fair value adjustment ebay.
Did you.
Should the preferred stock issued.
Gender political social play further stops so you couldn't you.
Hi.
Could you use snapshot charter truly quick touch on Jan good paper loss, Patricia Nash on the sanction.
I'll take him as CFO.
The homeless and Illumina.
Tricia you could shoot efficiency.
Thanks for the hint hint at what was wrong with it.
You May also meet yourself.
Okay. Okay.
Is a paper loss related to our financing transaction, which was announced earlier this year.
As a purely accounting treatment under the U S definitely calculation, here's what the change in subprime.
After the announcement of the deal with new catheter enjoy capsule provide up using.
And the loss on our income statement. However, this is a noncash item, which will not have any impact on the company's cash flow status.
Now related to our business development.
Okay.
And it sounds like you mentioned your development no.
No woman that show that when I sit down for us.
And also a woman syndrome from our strategy to pick up.
Do you essentially have a D E W.
W. Whichever Ms. Tina women don't dwindled down tendency by trend between what may yet.
What would be interesting if I can call your agents to change or Dr. <unk> Chang Qi, a partnership yesterday to teach it just seemed that hoser in defense of the junior drama pattern.
<unk> no.
Well then that's hosted in EG, we didnt convert whole issue that took a warrant that.
Goshen trend now <unk> tissue.
Tissue to T J.
<unk> yeah.
Do you have more changes that way to the <unk> in women with <unk>.
Hydro production leader element is of course, an epidemic quota yolanda with adhesion.
Three more childhood Wheeler industry eliminates all of the time, so that should go up.
<unk> Covid.
Due to lucid neutral basis without terms with them.
In terms of the cash flow condition after receiving the funding lapses.
We have ample cash on our balance sheet when they see the first change of $100 million in July and we are closing the second change up 15 million U S. Dollar, which is also ahead of our original schedule. This is Blackstone invited.
Patient and confidence.
Operations and business development.
While the full on Huawei are part of the transaction also progressed, well and we are working close with and basket.
Such funding to support our future business development.
Of the day, our business is doing well.
Spending with the continued growth of our vehicle inventory.
Overall speaking we have may sound plan of the usage of our cash I believe our cash balance is sufficient.
Okay.
Is it going up.
Oh sure sure.
Operator. Please go ahead to next question.
Maybe you have the next question. This is coming from the line of thing Great <unk> from Citic Securities. Please go ahead.
We will have in Tacoma.
Hey are you sure about that.
I think all of that into how often they got us into trouble to yet, but I'll stop there and you've got quite a unique it flattened out.
$10 volatile so you'll see it in cash it's familiar in Gaza charge about a year now.
Now how would you guys say that he taught.
Firstly I wish if I wasn't quite sure if I'm wrong.
Yeah.
No problem.
Please go ahead, you're definitely sponsored uccello he's on the Kenyan government.
So I flew out shortly after that.
Uh huh.
Let me translate to English and.
My question is about the debt.
The electric vehicle used to used to cost and on the one hand, it right I mean, it's possible that it might have cost growth very soft and however does some other province for example, a debt discount or how to.
Estimate its values and I would like to hear from you about what our plans and views about the secondhand electric vehicles for thank you.
Women are you doing.
Hi, Chicago Sydney hours 10.
Oh sure. So if you don't mind about for sure.
And about Allen Tricia IPL Shaw.
Using a condom.
Sure.
The church Whatsapp Jupon scholar one data that you guys went out on the beach and fewer traditional but if we can.
<unk> <unk> one trillion.
Cardinal assuming an hour from traditional hydraulic control self interest to lineup.
200, and I'm kind of assuming all of which were hard regulatory Youngstown up with your own balance sheet.
Our balance sheet and a horror show, which went on Sei Jin Hui.
I'll jump baked in young children around the slowdown in attrition issue.
We have launched our youth EBIT business E Mail is a major trend in auto industry, although the pool of the east is this EV is still in a relevant amount.
It's a clear sign that the demand for <unk> full suite or upgrade their vehicles is increasing and they use EV electronic vehicles apartment and available in the market.
The potential market size for use electronic vehicles will be economic as conventional gas power used car. Although there are some differences between this typically in terms of his passion reconditioning pricing ends up.
No women, especially ones listening to ensure that you get.
With Houston.
No you heard for the cargo within fluids offshore holding is for sure.
Oh sure.
Total function.
Of course, we'll have some good quality of shop to contango to Yahoo against you don't know the mosquito zoro truly utonian at Huntsville continues to have a train them pretty listening hours were Chicago Cleveland project.
We have already launched our youth electronic vehicle business.
Currently we all we offer use EV of Michael bound Noah Eby Brown.
While we continue to feel that our electronic vehicles there'll be systems and refine our capabilities on a number of fronts, including fashion lengthy and after sales service.
We are also equally the best way to adult use.
Electronic vehicles.
Nope.
Contributing to the healthy development of the huge.
Chinese vehicle market in China by leveraging our Knowhow and capability you used vehicle market feedback through years of operation.
How does your ship.
Uh huh.
Okay.
Yes.
Okay.
Thank you.
<unk> no further questions at this moment I would like to hand, the conference back to our host for any ending remarks, please take over.
And they'll play into our thinking for already messaged, joining us today, we look forward to see you next time goodbye.
Goodbye Goodbye and thanks.
Thank you that concludes our conference call for today. Thank you all for your participation you may disconnect now.
[music].
[music].
[music].
Ladies and gentlemen, thank you for standing by and welcome to <unk> Earnings Conference call for the quarter ended September 30 F. 'twenty 'twenty. One 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.
Have any objections you may disconnect at this time.
I'd now like to turn the call over to your host for today's conference call Ms. Joyce Tang Oh, yeah.
Director of the company. Please go ahead ma'am.
Thank you operator, Hello, everyone and welcome to the Yankees and these conference call for the quarter ended September 32019.
On the call today, I'd be paid founder and CEO of Yoki and join me CFO of Youre seeing he can review business operation.
The highlights followed by Jos who will discuss financial financials and guidance.
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 may I'm Gonna Safe Harbor provision of the U S quality Secret Litigation Reform Act of 19, Nike fun. This.
These statements are based on management's current knowledge and assumptions.
Assumptions about future events.
Both known and unknown risks.
Awesome.
Which could cause actual results could differ materially from those in the forward looking statements.
<unk> does not undertake any obligation to update any forward looking statements.
As required under applicable law.
More information about potential risks and uncertainties. Please refer to our filings with the FCC.
Scott I don't know kind of full OLED to our CEO Steve <unk>.
Please go ahead.
Okay.
<unk> seen clinically with IL two.
So you should see a minute.
We will continue that allied on young women.
We know from being a local anyway, I apologize Antonio well density assumed from them in the future you thought Jonathan I'm going to vote at this meeting.
Okay.
Hello, everyone and thank you for joining our earnings call today tobacco come into play with both domestic and international in back to my prepared remarks today will still be in both English and Chinese.
Turning our opinion DRG too.
Our union SEDAR jewelry isn't tissue about should I surely on for sure though important.
So we certainly don't send him no message about her Huntington abnormal.
She didn't enjoy chipotle are extending our C&I plenty of evolution.
In the second quarter of fiscal year 2022 reached MBR September 30, we maintained solid growth in terms of both sales volume and revenue.
Total transaction volume in the quarter was 3640, <unk> unit, which is an increase of 21 again compared with last quarter. The retail transaction volume was $1 27 billion, an increase of 51% compared with last quarter.
So a couple of co vishal.
Adhesions Colombian juku adhesions.
Look we bought well Linda cohort ingredient NPS the issue for that utilization.
We will go from 40 shingle MKS duo Fu Fu Shen.
John <unk> with Jefferies.
With me on that one.
<unk> <unk> <unk>.
With that I'd CFO that <unk> built Youll Coca Cola Veda Trump tweet on culture down the shareholders.
Our reputation in customer our consistent efforts to improve vehicle quality and service experience have generated good results in the quarter, almost <unk> net promoter score or NPS.
For the fourth consecutive quarter to 50 feet.
A new record high versus 42 in the previous quarter.
<unk> forward, we will continue to optimize and upgrade the quality of our products and services in order to provide best in class one stop shop for KC three to our customers and drive high quality sales growth through positive word of mouth.
She will email it you will find I mean, we've got 100 watt fascia, IRC Moshe Importunity to shop.
<unk> continues to exceed all of the RV using the IRC.
Following to search from borrowers, which all you don't see that achieve she donations Sheryl auto mosquito shall be a pattern we acquired that future.
Olympia on IRC local shallow put onto Johan.
EMEA those comparisons will be introduced shortly.
<unk> grew more.
The one thing that we can hoping rsp's actual Australia.
Yeah.
Hunger.
What how could you help I mean, bouchard, who are either Couldnt Tracy.
Wait well, meaning you don't put it out of the article talking about Covid.
<unk>, usually that all my age on our body shaping for food Egencia Dolby.
<unk> triangular team for the Eagle Ford.
Woman the championship growth central shelf.
<unk> cohort, yet not only youre chasing.
That'll mutual of Omaha adventure, while they're not showing up yet.
Hopefully rfps from Fujian rule downs for weight loss.
Sure.
How easy the Ars, which was getting that without losing debates HEICO Jen fritzsche on page I'm sure sure Matt sure Bob jump in each of whom we salvage excluding injunction.
We completed an important milestone in our business development EBIT November is Alex Yao of ISP, So desperately launch in London and launched our second IRT and currently unclear probably.
China is the largest amount of used car transactions.
We're probably one of the fastest growing area for us.
Consumption in the region.
No all of our second IRT and currently.
It's a key strategic back in our business expansion.
That's typically one of our E.
E Commerce, a total area of about 100000 square meters with a warehousing capacity of up to 2000 vehicles.
The combined number of vehicles available for sale installed base is roughly 101500, covering 52 brands and a large collection of economics and luxury models.
As far as we know this is the launch itself or used car IRC in China compared to E. On I can definitely as these demonstrate our improvement.
In himself menu quality operational management and fees and services system.
Since we began operating in mid November the new corporate assay has been well received among cockpit bought used vehicle quality uncertainty severe.
The vehicle sales volume has been growth badly week over week.
When the construction is fully complete it just sounds like ISC will be one of the most advanced used car production center that feature streamline operations automation digitalization and business intelligence It will be a one third youth concentrates destination.
Operating vehicle acquisition in fashion refurbishment demonstration cell and after itself.
That's where you come in.
<unk>.
Vocal but anyway it over to Neil Wilkin.
Well I mentioned that one this is a woman.
The turnaround at <unk>.
<unk> heard the Koreans LG Gen School.
Physician OTC you base it on shelf you won't walk into the Hartzell Ctrip users.
Using streaming hours hope would you generally using their realized humira institution today that I can quantify that.
Yes, Q on them can deal with Massaro Trillium that Huntsville casino kind of a 10 32 main elite prudently seemingly Aro trust your term the equivalent hijacked switching towards utility acquisitions.
In terms of retail softening, we have expanded our pool of vehicles to equal leading domestic and fully electronic vehicles that we.
Building, our EV business operation by establishing sourcing channels these fashion standard and refurbishment process.
<unk> designed for elite.
This will enable us typical life high quality reliable use EV to our customers.
We believe this will provide new growth drivers for <unk> in the coming area of electric vehicles.
While we also hope that we can leverage our extensive in fashion and we condition the capability to drive the healthy development of the youth EV market in China.
The challenge in based on performance and Roop will then youll find who should Houston to payroll into the solid tumor.
<unk>, <unk>, which was around $2 million repeating nature of that contract.
And then who were born in looking at the U R. T. Later Trillium Paas reduce initially <unk> CCC concourse would you.
Do you have in your model to rebuild it.
I mean look we will have some diligently Hulu consolidated EBITDA because on my radar.
Bookings in Australia, who shared with me a decade into beautiful question with Youtube Vishal before me and put onto a single woman, who Tien tsin pendulum sugarcoat things always will fail gave.
<unk> <unk> three children baby.
<unk>.
In terms of physical reconditioning capabilities, we continue to optimize and streamline our work processes to improve both quality and efficiency based on our market research. The majority of the used car dealers in China only offer very limited or the most basic level of reconditioning.
Before selling the vehicles to customers.
Youll see rehab accumulate integrated database of refi reconditioning centers and profit through use of operations.
<unk> utilized our scale advantage in procurement to optimize reconditioning costs and can offer our customers high quality vehicles at attractive price.
Meanwhile, we are actively involved in reconditioning equipment and technology to further boost our efficiency.
In closing ISP, our it about every time and cost required to reconditioning of crop decreased more than 50% compared to the pump Linda He IFC was Jack launch.
We will continue to focus on improving every business process.
Try a good balance among quality cost and efficiencies.
<unk>, we've looked by a scent boosters.
<unk> <unk> <unk>.
<unk>.
What our turnaround cycle, if you go to a <unk> correlation between intangibles as ammonia. Thank.
<unk> unit whole foods, Anthony our mutual equivalent crude oil petroleum reserve it that I couldn't do that film Commission 13 boutiques over to local night here.
Currently we have close part of the second tranche of the financing transaction ahead of the original standards. Following our development plan, we will extend vehicle application.
With replenishment capability and optimize supply chain investment in these key areas will enable us to increase available what's not inventory and further improve the car purchasing experience of our customers.
So I wasn't totally sure Coca Cola <unk> future <unk> also shouldn't be aluminum vehicle Fujian sushi domain, our toolkit that we'll.
While Michelle for the hydrocodone.
<unk> been on this issue.
Almost like tissue and Argentina front understand intercessory, who will then switching to Walter Schenker is constantly in front of the future.
We project the <unk> protocol was at Donlin gold.
Hopefully Bob.
Finally, I would like to once again, thank our customers and shareholders for their continued support and our team for their hard work and dedication.
This will be a long and fruitful journey and we will have a long way to go.
Louis operations of the CR as the over the past six months and the newly launched perfect has given us great confidence in our business.
And for what we will.
We may committed to our current development direction and contribute to the long term and healthy development of this tiny used car industry.
I'll leave more of our efforts.
Efforts and investments today will pay off in the future.
Some of that machine therefore genre. It is opening due to those housing loans.
With that I would like to tend to pull over to our CFO Jon to walk you through the financial results. John. Please go ahead, okay. Thanks, Dk Hello, everyone. Let me walk you through our financial performance in the quarter ended September one.
191.
The business whats going on steadily in this.
Growing steadily in this quarter, we started to increase our available for sale inventory <unk> on IRC. Since we received the first tranche of the new investments in early July and reached the full capacity at around 600 cars in mid August.
The improved inventory level enabled us to ramp up our retail sales of audio.
Our radio volume increased 51% quarter to quarter.
Overall sales volume increase of 21% quarter to quarter.
As a result, our revenue has increased by 24, 5% compared to last quarter.
Meanwhile, we spend a tremendous amount of efforts to minimize our cost and expense structure build a lean organization and to drive efficient operational processes.
Impact has been reflected in our continuous improving operation law.
One thing I would like some commentary specifically is.
The fair value adjustment impact of the issuance of senior convertible preferred stock as a result of our financing deal with Neil capital and <unk> capital.
Because the stock price rose significantly since the company announced entering into a binding term sheet with these two investors on April 1st of 2021. This will add to a paper loss of RMB $1654 9 million.
RMB or us dollar 256 points to eight minutes.
Which impact the net profit.
This loss is purely driven by accounting treatment.
Cash item and has no impact on our cash flow and it is not related to our business operation.
With respect to the financing transaction with Neil capital and it drives capital that we announced earlier as part of the second closing of a U S. Dollar 50 million. We have received U S. Dollars 27, 77 5 million cash.
Schedule y.
We expect to receive the remaining U S dollar $22 5 billion in the coming months as planned.
As <unk> said earlier, we will leverage the capital it took to continue investing in key business initiatives, including increasing car inventory optimizing reconditioning technologies and our supply chain.
To drive further high quality business growth.
As we announced earlier <unk> has been included in the MSCI Global small cap Index, China Index effective on November 32021.
Is the first time that <unk> has joined at the MSCI Index.
We see this as a recognition of a <unk> business performance and the China's used car industry potentials.
They used to use the vehicle industry in China has huge opportunities and we believe Eugene is well positioned to lead a dynamic growth of this promising market.
Full details of the quarter ended September 30.
21 are available in our earnings release, So now I will run through some key numbers all numbers are in RMB unless otherwise stated.
Transaction volume was 3648 units for the three months ended September 32021, compared with 3000.
And 11 units last quarter and the 2653 units in the same period last year.
Total revenue was RMB 345 nine.
$9 million for the three months ended September 32021.
Canada was RMB $277 8 million last quarter.
RMB 76.
$4 million in the same period last year.
Gross margin was four 2% for the three months ended September.
<unk> hundred one competitor was 4% in the last quarter and an active and inactive 22, 4% in the same period last year.
Our loss from continuing operation was RMB 45 9 million.
Three months ended September <unk>, splendid 91, compared with RMB $50 7 million last quarter and the RMB 160.
Two 6 million and Thats been kind of the last year.
The non-GAAP adjusted loss from.
From continuing operation was RMB $43 2 million for three months.
This quarter.
Compared with RMB, $44 6 million last quarter, and RMB $178 3 million in the same period last year.
The fair value impact of issuance of the senior convertible preferred shares resulted in a loss of RMB $1654 9 million for three months ended September 32021.
As discussed earlier.
The impact was mainly due to the significant rise in our stock price since the company announced a press release about entering into the deal.
It sounds like the impact was.
Non cash charges.
Driven by this not the loss from continuing operation was RMB $4714 6 million for the three months ended September participant in any one competitor was RMB $258 9 million in the same period last year.
Removing the fair value adjustment the impact the non-GAAP adjusted net loss from continuing operation was RMB $56 9 million for the three months ended September 32021, compared with RMB $274 6 million in the same period last year.
Then about our cash position.
As of September 3200, 31, we had a cash and cash equivalent of RMB 230.
$6 million.
Moving to our moving onto our guidance.
We expect our total revenues to be in the range of RMB 480 million to RMB 500 minutes.
For the three months and ending December 31st 2021.
This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to changes.
This concludes our prepared remarks.
Okay.
So operator, we are ready to receive questions. Thank you.
Suddenly Sir ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel their requested compressor bound ohashi.
Once again it is star one on your telephone keypad to do ask a question. Please.
He is not there might be a slight pause as it relates to questions.
We have the first question is coming from the line of <unk> de <unk> from <unk> Securities. Please go ahead.
Okay.
Hum.
What have been T shirt.
Sure.
Ill.
Moving pieces push on that stupid.
Uh huh.
<unk> gone through it will be done that ctrip <unk> vehicles to Germany, yes, It goes down and so it's all the usual winter.
But you do like Peter PD English that team cause that youll see.
Sure.
There you will find out.
To say that she trailing full year won't build out yourself.
My question in English.
In terms of financial situations over the last four quarters, we noticed events of wholesale vehicles business.
Contributed more revenue overall.
Overall performance of the company charges from this culture. This proportionately speaking filter.
Nice.
To accompany understand developments of our business and what will be the impact onshore retail vehicle business and so future. Thank you.
Hello.
<unk> shared with you.
Using the <unk> leach meaningful conditional visual development full wave contribution to the <unk>.
Sure.
That is when we can achieve kind of your go to yoga women's and Tom be due to the usual query the synergy.
But should we look forward to try and quotations in China, We want these azure Michelle Herman <unk>.
I bet you apportion accordingly, so there what we should buoy us soil.
<unk> CAGR showboat and other good intro, Liana doorjamb, boudreaux hot or warm the insurance claim.
The highway you both on the payable for women the mutual builder naturally controller on Opana women should we be honest with you know now you shouldn't either <unk> or <unk>.
<unk>.
We'll know what machine that would result in 700.
In UC.
Currently the stock breakdown between our reach out into the wholesale business is wanted to even our brand impact and market reputation many customers come to us to therapy used vehicles.
However, currently we don't know all the used car sourcing from individual car owners through our retail business with a few reasons.
But we have to consider the base capex capacity. Meanwhile, he would like to control the level of cash tied up in our inventory also it take time to increase our sales capacity, therefore, but the comp they are not up to our retail centers and dose CPU our inventory capacity.
Now through our wholesale business and accelerate our inventory turnover rate.
Okay.
So you can do for you to.
Okay My transfer CMO Continental inquire literally mutual controller in the SRAM Hudson the usual shutdown nutrition zero Tonsillolith neutral piece or are you seeing guys RV dealerships.
Number two neutral the Yolanda occasionally you have a domino effect.
In the long run this percentage breakdown will gradually changed as.
Our retail inventory level gradually increase and to her face.
And accurate at both be in operation.
Our retail sell through for sure a flatter decline.
We expanded cash breakdown between retail and wholesale to be one to two to one I believe we can meet recounts dose.
We will be twice as much hotel staff.
Yes.
Aloha.
Yes.
Yeah.
Yes.
Thank you Shelby closer to next question.
We have the next question. This is coming from the line of Jay <unk> from China Securities. Please go ahead.
But what's been your Capex Lynch English.
Gotcha.
Shape.
Okay.
Daryl that don't require you to take questions.
Jacob Cheyenne Moshe as you look at Oh, Yes, that's all the time.
Hello Shell shock launch I realize you got you.
Uh huh.
So that's how that works.
Yes.
Sorry, sorry could you. Please repeat your question in English.
Okay. Okay.
Okay.
Uh huh.
Sure.
It's Paul.
<unk>.
Could you explain the impact of that.
Fair value change for the net.
That loss.
Second question.
Cash flow.
What's the expectation to open a following quarter cash flow.
Okay.
Okay.
To my left without a whole chain.
Josh.
Okay.
Uh huh.
Well in particular as a fair value adjustment.
Especially you can cut out with me, it's not just China.
It goes through <unk>.
Globally, our muscle now doubt wholesaler laid.
Great as a part of it.
Yes.
Welcome to the Cherokee through some Glenn.
Women.
Tom and Joe sure Conchology, electro farnell Jehol nook without penalty.
Publisher Paas.
<unk> 2000.
Sometimes its outdoor so anything that we are showing you grew up quite a bit 40, China John.
Fair value adjustment ebay format.
The study showed a preferred stock position.
Gina political social play further stocks a country.
Hi.
<unk> is fully <unk> and Jan good pay per lot sufficiently good traditional distinction now.
Thanks, Phil.
The composition here.
Tissue should efficiency.
That's a consideration here.
With a fragile <unk> Mayo Schmidt.
Okay. Okay.
This is a paper loss related to our financing transaction, which was announced earlier this year.
Clearly accounting treatment under the U S GAAP because nation, here's what the change in subprime.
After the announcement of the deal with new capital you enjoy capsule.
Up using.
Delta in the loss on our income statement. However, this is a noncash item, which will not have any impact on the company's cash flow status.
Now related to our business development.
Okay.
And that does give us.
No woman that show that when I sit down for us.
And also one in Shanghai, Xinjiang Qantas Tragically go well.
While material essentially all of the E W.
W. Whichever Tina women don't Toundar downturn.
With me here.
With me as CFO can call your agents to change or Dr. <unk> Chen Zhou partnership to ensure to teach at Jos.
And I assume that hosted on the concertina drama.
<unk> seen horizontal well.
Well, then therefore posted an EBITDA accretive holzschuh that took a warrant that.
Then it goes into an <unk> with those products issued a keyhole incisions.
<unk>.
Jim will change if that were to the Latino women would change our hydro production leader element of course, an epidemic with that Yolanda with adhesion.
More childhood.
Eliminates all of the time to show that <unk> impact, which under <unk> COVID-19.
Due to loosen that relationship with our terms with them.
In terms of the cash flow condition after receiving the funding lapses, we have ample cash on our balance sheet.
When they see the first change of $100 million in July and we are closing the second change up 15 million U S dollars.
Is also ahead of our original schedule. This is plaza imagine.
With patience and confidence of our operations and business development. Meanwhile, the Golar Walgreens are part of the transaction also progressed well as we are working close with <unk>.
Such funding to support our future business development.
Of the day, our business is doing well and extending with the continued growth of our vehicle inventory.
Speaking as we have made solid plan of the usage of our cash I believe our cash balance is sufficient.
Okay.
Hello.
Uh huh.
Good evening.
Oh sure sure.
Operator. Please go ahead to next question.
Maybe you have the next question. This is coming from the line of thing Great <unk> from Citic Securities. Please go ahead.
Uh huh.
Thank you Donna.
So year to show up at.
I think Paul.
I wasn't thinking of dosing schedule, yet, but I'll stop there and you're going to need to explore that.
$10.
You'll see in high shifting with John familiar in Gaza charging like a year now.
Uh huh.
And I ran towards the ownership I wasn't quite sure if I'm wrong here.
Oh yeah.
He's on the nominal timelines.
So that's me out toward your quality of life.
Uh huh.
Let me translate to English and.
My question is about the debt.
The electric vehicle use.
And on one hand, it's right there in the south of that.
Cost growth very soft and however, does some other province for example.
That discount or how to.
Estimate its values and I would like to hear from you about what our plans and our views about the second head electric vehicles from thank you.
Well no no no.
Hi, Chicago, Sydney Archer Youre, sending out shortly.
And I'm not too sure Duncan about Allen Tricia Hydrogel Shaw.
<unk> four <unk> coupon scholar one data that you guys went out on the beach and fewer traditional with I'd always been quiet in truth, Chikungunya, let me cardinal assuming than ours, which which you should pressure control shelf hydro to lineup.
100, and I'm kind of assuming all of which were hard regulatory young turn up with your own balance sheet.
Sure.
Which we're not sei Jin Jiang with Chevron on the floor of an attrition issue.
Yeah.
We have launched our used EBIT business.
It's a major change in auto industry, although the true up is this EV is still in a relevant amount.
There is a clear sign that the demand from owners of EDI Cox two suites or upgrade their vehicles is increasing and are used in electric vehicles are published and available in the market.
The potential market size for use electronic vehicles will be as large as conventional gas power used car.
There are some differences between these typically in terms of his passion reconditioning pricing ends up.
No women, especially where there's no listening to ensure that you're good with Houston.
So the tecogen fluids atropine offshore holdings was shut in.
Nobody Gpus.
The shoulder function to Volcker rule have improved quality of shop in <unk> <unk>.
Oh, 2020, and that Huntsville facilities have a generally pretty listening hours grocery home burglaries and project.
We have already launched our youth electronic vehicle business. Currently we all we offer use EV of Monica well Noah Eby Brown. Meanwhile, we continue to build out our electronic vehicles, there'll be Switzerland, and refine our capabilities on a number of fronts, including fashion.
And after sales service.
We are also exploring the best way to adult use electronic vehicles.
Nope.
Contribute to the healthy development of new.
Chinese vehicle market in China by leveraging our Knowhow and capability used vehicle market feedback through years of operation.
Hello, Sir.
Let me talk.
Yeah.
Yes.
Okay.
Thank you.
<unk> no further questions at this moment I would like to hand, the conference back to our host for any ending remarks, please take over.
And they'll go into our thinking for audio message joining us today, we look forward to see you next time goodbye.
Goodbye Goodbye and thanks.
Thank you that concludes our conference call for today. Thank you all for your participation you may disconnect now.