Q4 2023 Uxin Limited Earnings Call
Ladies and gentlemen, thank you for standing by and welcome.
Earnings Conference call for the fourth quarter and full fiscal year ended March 31st 2023.
At this time all participants are in a listen only mode.
After managements prepared remarks, there will be a question and answer 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. John Locke. Please go ahead.
Alright, Thank you operator, Hello, everyone and welcome to <unk> earnings Conference call for the fourth quarter and full fiscal year ended March 31 2023.
On the call with me today, we have dk, our founder and CEO and John <unk>, Our CFO Dk will review business operations and company highlights followed by John who will discuss financials and guidance.
They will both be available to answer your questions during the Q&A session that follows.
Before we proceed I would like to remind you by this call may contain forward looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our expectations for.
For detailed discussions of the risks and uncertainties. Please refer to our filings with SEC.
Now with that I'll turn the call over.
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Good day to everyone and thank you for joining us for your continued interest and support it's a pleasure to welcome you on our earnings call today.
To better communicate with all of our domestic and international investors I will be discussing our performance over the last fiscal year as well.
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2023 fiscal year, which is spend firm April 2022 to March 2023 presented at myriad challenges you've seen in along with numerous other Chinese enterprises navigate.
Navigate the societal and economic headwinds caused by the COVID-19 pandemic.
Despite these obstacles our online and offline used car retail operations experienced faces world moments of stagnation and subsequent researches.
Nevertheless, we managed to overcome these hurdles and delivered a commendable performance our retail transactions increased to 10703 unit <unk>.
Recording a remarkable year over year growth of 100%.
Notably our net promoter score or NPS remained consistently high at approximately 60 points over six consecutive quarters solidifying our position as the industry leader.
Excellent quality or where he used car offerings combined with our exceptional customer service.
The increasing recognition from our expanding customer base.
Furthermore, <unk> Offloading Super scores.
Become.
Benchmark for industry upgrades within China's used car sector.
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China's Laurie seen used car market is they're forced to be record we're already at a staggering trillion RMB level with a whopping 320 million vehicles, China, the world's largest car ownership.
Each year is to get a significant number of vehicles to enter the circulation stage fueling the swift growth of the used car industry in.
In the first half of 2023, the nation witnessed a remarkable surge in used car transactions, reaching approximately 9 million unit showing a notable 16%.
<unk> compared to the previous year, drawing from the mature market experience in the automotive industry, China is progressively pivoting towards a trajectory dominated by stock car transactions. We project by used car transactions in China will soon exceed 20 million units per year with still a remark.
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Well the upgrade and the consolidation of Chinas used car industry are still in the early stages of.
The unique characteristics of each vehicle extremely fragmented market structure and the lengthy intricate transaction change oh hindered the industry transition towards Brent oriented.
Yeah, well on standardized development Houston pioneering model of offline superstore online nationwide purchase model.
It's a new format and the industry has completed the leap from zero. One this model centered around advanced production modern retail experience and data driven operation.
Has laid a solid foundation for the next stage of scalable profitability.
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First Steve Busby, our reconditioning factories with advanced equipment and technology guarantee the supply of top quality used car production of products.
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The supply of ultra large scale high quality used cars is inseparable for a modernized reconditioning factories were suitable production capacity. Following the launch of our new of our newest Xeon Superstore, which is also the largest in northwest China with the scale of up to 3000 units.
The transparent factory at 1.1 management system that Houston has explored and developed for one and a half years has also been put into use.
This system is similar seamlessly integrates inspection evaluation and repair processes.
Employing an extensive range of digital monitoring tools to streamline the entire operational management spectrum.
Full scale efficiencies and tenants to buy the systems intelligence workshop planning real time tracking of vehicle and material status and authentic data workout, where some costs.
By leveraging the Houston is transparent and factory at one point all the system. We have established the most advanced Reconditioning factory management system in Chinas used car industry.
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Furthermore, we continue to upgrade our reconditioning techniques introduced the latest technologies, such as three D printing smart repair and develop an integrated parts supply system.
As a result, the recondition time and cost per vehicle.
Being redeemed has have been further reduced compared to a year ago. The time. It takes for each car to go from factory you can take to shelf shelf Bell has dropped by 70% and picking at an average of only four days.
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A leapfrog consumer experience that surpasses traditional marketplaces.
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For the majority of consumers in China.
They used car can be a challenging and uncertain experience.
Traditionally but of course, that's involved visiting up to hundreds of shops scattered across a used car marketplace searching for specific models and inspect multiple vehicles and cycling the with the various dealers over prices.
This tedious process offers no guarantee you're purchasing a reliable used car at a fair price or receiving adequate after sales support.
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In the past year, Houston has revolutionized but used car buying experience by embracing.
Modern retail spender.
Our Super sports offering consumers, a relaxing and enjoyable car buying experience comparable to that of modern shopping malls.
And customers stepping into our superstores, they will be greeted by a bright and spacious venue.
Bill with something of carefully selected to exhibition vehicles. Our cars are conveniently displayed according to the modern retail shelf mode.
The easy to compare different models, we have implemented a screening system based on the national standard ensuring class clarity and ease of understanding.
Customers can be certain that our prices are transparent with Nokia and <unk>.
On the traditional dealership experience, we provide one stop solution for all your needs, including financing insurance extended warranty accessory upgrade and other value added services to further enhance customers' convenience we have an onsite in for Ya quite administration office.
Allowing customers to compete complete Oh transaction transfer procedures on the same day. This eliminates unnecessary delays and ensures a smooth and efficient process.
We are delighted to share that our sports sports in Xi'an and hooky quickly become the go to destinations where it used car purchases in their respective cities within just one year of opening we have established ourselves as the leading brand in local used car recognition.
The positive word of mouth within the consumer group, that's created a network effect, attracting a steady stream of Navy's traffic to our superstores.
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You see in this business.
Says, it's managed on a per vehicle basis with the system's capacity built upon this singular vehicles dimension, our proprietary trip the irrigation system like the irrigation practices in modern agriculture that cater to each individual crop right through every step of the used car transaction chain.
From Kerr acquisition, reconditioning sales and delivery to after sales services.
We make business decisions based on data at the vehicle level, which constitute our core competitive advantage that sets us apart from traditional car dealerships.
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Taking vehicle pricing as an example, using has established our intelligent pricing model based on more than a decade of accumulated massive Chinese used car transaction data.
The mono determines the individual price of each vehicle based on its age condition mileage colored and other parameters. While also considering factors such as customer demand current inventory structure offline person right feedback and real time market conditions for dynamic.
Adjustments.
By continuously training relevant parameters and Iterating.
Iterating the pricing system using large scale actual transaction data.
Houston initial pricing becomes more accurate.
And the adjustment process becomes timelier.
Leads to continuous improvement in efficiency with the average time from lifting to sell being less than just four days was 45 days.
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I wanted to sell volume increases the number of parameters that can be input into the system and also increases in reaching our pricing decision anchors and expanding the bunker yourself or our pricing capabilities. The flywheel effect of electrical systems is scaling increasing which is the key.
Convenient continuously solidifying and competitive advantages in our ultra larger scale used car operation system in one of our important bulks.
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Over the past year. In addition to our progress in our business or financial situation has also improved towards long term health.
At the beginning of this year, we completed the restructuring and repayment of the 2019 convertible loan effectively resolving the majority or all of our historical debt.
The greatly optimize the infrastructure off our balance sheet.
This allows us to better allocate resources for future business development.
The more we have actively promoted our cooperation with banks and credit supply chain financing obtained obtaining credit long yourself, approximately 300 million RMB from several reputable banks.
Pizza arrangements have facilitated by increased efficiency of our capital utilization. If these efforts will support the achievement of our business plans for fiscal year 'twenty 'twenty four.
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Looking ahead into the 'twenty 'twenty four and fiscal year, we will primarily focus on three key areas based on our current strategic planning.
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First the launch of our new flagship superstores in coffee.
We would like to inform everyone that the construction of the flagship superstore, which is jointly invested by us and the coffee government has entered the final stage of equipment and system calibration after one and a half year construction period.
We plan to come in and trial operations in August and have a grand opening within this calendar year.
The new Super score has a total area of 450000 square meters and consist of the worlds most advanced used car reconditioning factory.
And the largest used car sales area, which can accommodate up to 10000 vehicles for display and sell when reaching full capacity.
Of course, a flagship superstores serves as Houston Central hub for our expansion plans in the used car industry.
Joining me, let's say by extending its reach across the Uncleared province, and specific to our city.
Fitting sales nationwide.
It is an important joint initiative or both Houston and the local government of coffee to promote the development of the automotive aftermarket aftermarket industry and unclean provenance and build a leading brand in China's used car industry.
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Secondly, achieving profitability of our superstores.
After over a year of consistent development Houston Superstores has continuously improved cell. So your efficiency increased our gross profit margin and substantially improved overall cost structure.
As a result, our gross profit margin is expected to exceed 6% for the first quarter of fiscal year 2024 or.
Our midterm of course appropriate margin target will be 10% or above.
In the past few months due to disturbances in the new car market Houston has maintained a prudent purchasing strategy and has not significantly increased the inventory.
Starting from August we will accelerate the increase in vehicle inventory to generate more sales conversions.
We have confidence in achieving positive EBITDA for the corporate stores by the end of this year.
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Thirdly, completing the expansion planning of two to three new Super stores.
Based on the proven success of Houston's offline Super score model, we are actively strategizing for expansion into new regions. We aim to finalize the location selection and operational preparations for two to three new Super scores.
To further enhance our regional coverage and branding that's why I said improved synergy between cohesive online and offline sales networks.
These factors will lay a solid foundation for our business growth in the coming years.
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The Chinese used car sector is vast with a significant potential and our tenacity and will ensure a world could be exponential.
While upholding our commitment to value creation. We believe there are spectacular opportunities ahead to serve consumers in the used car business. We are passionate about.
And to generate greater returns for our shareholders employees and society at large once again I extend my deepest gratitude.
You're on a waiver and your trust and support necessarily welcoming you to visit our superstores to experience firsthand as well as explore all products and services on our mobile platform.
I also look forward to achieving new milestones in the new fiscal year out of Houston.
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And with that I'd like to turn the call over to our CFO to walk you through our financial results John .
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Thank you Dk and Hello, everyone. Since we have both domestic and foreign investors attending our call. Our remarks will be delivered in both Chinese and English for everyone's convenience.
Now I will provide a closer look at our financial results for the first quarter and fiscal year of 2023.
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The quarterly retail transaction volume reached 2269 units.
About 22% year over year.
We experienced a 23% decrease compared to the previous quarter, mainly due to the impact of the traditional weak.
Season during the Spring Festival holiday with most of the used car transactions hold it for nearly a month or so in March the aggressive pricing promotion in Chinas New car sector also affected the used car market.
With customers showing stronger within C sentiment the total retail sales revenue for the fourth quarter amounted to 264 million RMB.
17% year over year decrease.
This was primarily attributed to the average selling price of retail vehicles dropping from 173000 RMB in the same period last year to 117000 RMB this quarter.
The declining asps reflect our practice optimization of inventory structure over the past year.
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In terms of wholesale those transaction volumes for this quarter. It reached 1348 units, a 32% decrease compared to the previous quarter.
Based on our operational experience during peak and off peak seasons, we proactively reduced the overall inventory acquisition before the spring festival, which led to a corresponding decrease in wholesale transactions.
S. P of wholesale vehicles also decreased from 67000 RMB in the previous quarter to <unk> 65000, RMB This quarter Council.
Consequently, the total wholesale sales revenue for the fourth quarter amounted to $73 6 billion RMB, a 44% quarter over quarter decrease.
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So as a result of the above factors total revenues for the first quarter was 344 million RMB, a 27% decrease compared to the previous quarter, mainly due to the impact of the spring Festival all season peak off peak season and fluctuations in the domestic new car market compared to.
The same period last year, there was a 32% decrease while our retail transaction volume increased this was offset by declines in our wholesale transaction volume.
The average selling prices of the vehicles.
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So we transitioned the post COVID-19 or operations have realigned to a healthy growth trajectory.
The inventory structure gradually returned to a healthy level with the sales turnover unprofitability continuously improving.
In the fourth quarter of fiscal year 2023, although we were still dealing with the residual impact health epidemic.
Our gross profit margin rebounded to two 3% compared to 0.6% in the previous quarter and 0.2% in the same period last year.
We believe there is still substantial headroom for growth and our gross profit margin.
We anticipate that the first quarter of fiscal year 2023, which is the three months between April and June 2023, our gross margin will rise to over 6%, reaching a new high in the past three years.
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The total operating expenses for this quarter amounted to 113 million RMB with a 9% increase compared to the previous quarter. This was primarily due to a noncash expense of 17 million RMB from the impairment loss of historical financial assets.
The accounting treatment for all of our historical financial assets has been mostly completed and they will no longer has a significant impact on our financial statements in the future. Excluding this one time impact operating expenses for this quarter were approximately 100 million RMB a decrease of 3% compared.
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non-GAAP operating loss for this quarter was $46 7 million RMB, a decrease of $38 9 million RMB compared to the previous quarter.
This included a onetime gain of 48 million RMB on historical debt restructuring.
We excluded this impairment loss of financial assets.
And the gain from debt restructuring non-GAAP operating loss for the quarter decreased by approximately 4 million RMB compared to the third quarter.
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Regarding the performance for the full fiscal year of 2023, despite the impact of the pandemic on our business development pace in the first three quarters, we still achieved a significant increase in retail transaction volume and revenue for the entire fiscal year.
Our retail transaction volume for the full year.
It was 10703 units.
105% year over year growth and our retail sales revenue was 1.31 billion RMB, a 68% increase year over year.
Total revenues were 2.06 billion RMB, a 26% increase year over year non-GAAP loss from operations for the full fiscal year was 310 million RMB, an increase of 50 57 million RMB compared to the previous fiscal year.
Mainly due to the decline.
Gross profit margin.
Detailed information on our full year results can be found in the earnings release, we just published and our upcoming annual reported so I won't go into further details here.
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Turning to the current landscape in the past few months, we have been delighted to see strong momentum in business development.
With the end of the price war in the new car market. The overall situation in the used car market has stabilized over inventory structure has become healthier.
Sales turnover has further accelerated.
The penetration rate of our value added services, such as finance insurance maintenance and accessory upgrade.
Which has high gross margins continued to improve.
The fees are further enhanced.
The profitability of our business laying a solid foundation for achieving our target of having our superstores breakeven this year.
In the past few months Houston has adopted a prudent acquisition strategy, maintaining a low level of inventory as we begin to rapidly expand our inventory scale. The profitability brought by sales conversion. It's only a matter of time and we will make every effort to achieve positive EBITDA at both of our.
C N unselfish super stores by the end of 2023.
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We have also taken active steps to enhance our financial planning and strengthen our cash positions.
We completed this.
Restructuring and repayment of all 2019 convertible notes earlier this year.
Lately resolving the single largest historic burden the structure of our assets and liabilities has been greatly optimized, allowing us to grow the business in a much much better.
Condition. Additionally in July we revised the stock warrant agreements with two new investors.
And the prospectus financing is progressing on track. Moreover, SDK mentioned earlier, we have established a corporation that with several renowned banks and obtained 300 million RMB in inventory financing credit.
These partnerships will significantly increase the efficiency of using our own funds and provided robust financial support for inventory climbing and business expansion.
Overall, our financial situations moving towards long term health.
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Regarding our outlook for the first quarter of fiscal year, 2024, which spend from April to June 23, we anticipate overall sales to return to a sustained growth trajectory due to market stabilization and the increase in inventory vehicles.
We protect retail transaction volume to be 1600 unit with a retail asps of 410000 RMB.
Our transaction volume is projected to reach 1600 units with a wholesale ESP of 61000 RMB.
Our total revenues, including retail sales revenue wholesaler sales revenue and value added service revenue are expected to range between 217 million RMB and 219 million RMB. Furthermore, we foresee a notable increase in our gross margin with expectations better or.
Margins for the next quarter will exceed 6%.
You have some unusual Mckinsey <unk> co star Jonathan John Neale.
If you're going to sell them credit actually went up.
And that concludes our prepared remarks for today operator, we're now ready to take the first question.
Thank you if you wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced.
You wish to cancel your request. Please press Star then two.
If you are on a speakerphone, please pick up the handset to ask your question.
One.
And in Chinese Please restate your question in English immediately afterwards for the convenience of the call.
Yes.
Once again, if you would like to ask a question. Please press Star then one on your telephone.
And our first question will come from Tom Huh Al Zacks investment Research. Please go ahead.
Sure.
Hello. Good morning can you discuss any recent market trends or any significant changes in consumer purchasing behavior lately.
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Should a hunting the piano occupancies, all visual you'll know what I'm going to check a seemingly Italian machines will go.
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On the China tender or was there some thought from a pushout.
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This is a translation from our CEO dk.
As we highlighted during our previous earnings call at the onset of aggressive pricing strategies in the new car market since January had a significant impact on the used car sector.
Increasing uncertainty over additional reductions in new car prices led to a noticeable hesitation, particularly when considering premium used car price over 10000, sorry 100000 RMB.
Do you think Atlanta hunting Kushner taboo with Humana at home and the Shoshone Acacia presentation, Tim that are controlled on Hulu Youtube dwell time.
<unk> shown with gold rush again, none of that for example, you see the woman that might have for that she the economy, but he go <unk> no longer showing your interest income while mine with.
You see them that one that you need a shopping mall.
However, since June we've seen the market start to stabilize and our sales efficiency has been on an upward trajectory.
Inventory turnover rate of vehicles on sale in the last month spending at approximately 40 base has surpassed the previous monthly record as our brand presence amplifiers in the regions, where all of our Super stores are located.
We will further strengthen the network in fact, among our consumer base. Looking ahead, we remain confident in our capacity to continue expanding our market share within those territories.
And that's all we're uncertain of your first question Tom.
Okay. Thank you one more question.
Sure.
Can you provide further commentary on future IRC are you looking at many regions or any specific areas for.
For expansion.
Alright.
Let me translate that question. The first part they are this yourself at individual IRC, you'll mills that kinds of machine that you choose.
Huge attention to IRC.
Got you.
The well known tenant on that wasn't without I think.
So meaning in kind of a woman coupons that are hanging out.
<unk> seen my transition.
It will tend to have to argue that truly are a treasure trove of green most easy way to.
With Didi, Jordan, Kuwait, how often dwelling should be handled locally.
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Pepco D C Chicago Harald for shorter Windows yet.
You can use the same kind of social shopping earlier question on kind of shelter looking nice yet.
No one have you seen my town Shreveport on acute continued to hit them all.
When do we tell them the iron triangle, New Hall for Peter how many top of the heap.
Yeah.
So as we mentioned earlier on.
Ongoing commitment to growth, we're mapping out the establishment of two to three additional super scores.
For the fiscal year of 2023, so in determining the low new patients will be evaluating a range of criteria, including population density that used car market by regional economic vitality.
Geographic positioning and local government incentives.
Each new establishment.
Each new.
Establishment, our aim is to fortify Houston position.
The leader in the local used car market, improving our penetration into offline markets, while bolstering our Brent synergy with our online operations. So for more detailed information and also timing updates on our ongoing and future development.
I would encourage you and our investors to stay connected through our IR website or official Wechat account.
So ian or take tuck on Twitter.
Okay.
Right.
Yep. Thank you. Thank you for all the questions I had.
Our weighted let's move on to next.
Our next question comes from C&I.
GF Securities. Please go ahead.
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Michelle.
Now the position that we need.
Chancellor Mommy Bill Mcgill for any additional.
Peter a question in English mentioned EUR release, there will be a significant improvement in gross margin next quarter.
It's a moment in some sort of gross margin expansion come from.
What are your long term gross margin target. Thank you.
City people and huge huge long life Alba.
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Anyhow.
Total income.
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Eliminate onboarding into short term a leading fashion.
So without that community without it.
Our finance WSI and get that on average a little challenged.
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But.
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We can hear something about that.
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Got it.
So this is the translation from our CFO Jong as you pointed out our recent operational performance has been promising, especially the marked improvement in our gross margin for.
For the quarter spending April to June .
Mentioned earlier, our gross margin had already reached 6%. So looking forward we forecast further our growth throughout the fiscal year of 2024, aiming for a mid term target of 10%.
With aspirations for even higher margin in the long term.
Okay.
Hi, Felicia.
One of them already to allow any of that before my English is truly on a social without in a mountain ecosystem pool, which I forgot it.
A woman <unk>.
So our gross profit for retail vehicle, primarily stems from two sources.
The gross profit from vehicle sales and the gross profit from value added services and we have seen marked improvements in both areas.
Putting a social malinda Keystone reality show, so that cash hot with Covid, but some tonnage.
Commercial emitter jumping in to the top of the chart.
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So it's not eligible for <unk>.
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I will try to limit ourselves with takata shoulder.
And yet you would have jumped on Houston now.
<unk> holding on women with or do you think that they can't come tumbling.
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And then the Penguin sells autodyne casually.
So you wanted the cash, albeit with the evolution and continue to build inventory.
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Got it.
The initial cut down the time to implement.
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No.
<unk> funding are going home print on a woman without a cellphone depletion.
So the uptick in our vehicles sell scores profits due to the combination of our sales margins steadied recovery and a significant decrease in our reconditioning costs.
The past two years presented challenges, which the pandemic, causing disruptions and accompanying market activity. This led to an extended inventories five cycle.
Inventory depreciation and a contraction in our sales margins.
However, post pandemic or inventory structure has improved with older vehicles, making up a smaller fraction and the average sales cycle, reducing through within 45 days.
Consequently, our sales margins are trending back to spending levels.
Moreover, the inauguration of our CN reconditioning facility and the integration of state of the art reconditioning techniques, coupled with our transparent digital management system.
Inefficiently elevated our overall efficiency.
This scaled our production our reconditioning costs per vehicle per retail vehicle have dropped by an average of 70% compared to last year collectively these elements have filled our gross margins resurgence used vehicle sales.
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Felt like handling our hit ratio.
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You should have some credit.
Thank you Romeo can either somebody wuxi.
Sure.
Amit <unk> from RBC.
But.
And two out of Dallas, Chicago EBIT evolution.
Our higher margin value added services.
Including the finance insurance and repair and other value added services.
I have seen the continuously increasing penetration rates revenue generated from these services per retail vehicle has surged by about 30% compared to six months ago, making another key driver for our gross profit growth.
We're cutting edge larger scale reconditioning facilities empower us to offer a comprehensive suite of value added services to our used car buyers.
Or to what new car franchise shops offer but with a distinct cost advantage.
This is <unk>.
Houston, Houston Superstore large showroom model apart from traditional we used harder marketplaces and small used car dealerships.
Multi neither.
Shalom opinion that you initially had a nighttime E beta Anita.
Right.
They do have more cash it within the last one equivalent Cleveland naphthalene, Wifi totality, Demetrius because you're dealing with a gunshot junkies.
So let's say the damage.
Hey.
We're heartened by the market enhancements in our gross margin, which bolsters our confidence in.
Attaining EBITDA profitability for our superstores fifth gear.
As far as scaling up our inventory achieving profitability from our large scale sales. It's just a matter of time when it comes to achieving EBITDA profit.
For our two major Super sports in coffee and Ciano within 2023.
And that's all we're all sorts of your question.
Operator can we move on.
The next question comes from Chi Tsang of Fedex. Please go ahead.
Hi, Tom Walsh listening at home.
That's from galleries agile Wabash, if all you're always tweaking Amit.
Awesome.
You can go to Ahmed Pasha.
Are you choking teleshopping chunky.
Okay.
They don't do.
So we think that culinary some auto dealerships trying.
Trying to expand into the youth carpeting is intensified completion had to post challenges to Houston and compassion dose data.
Excellent.
Thank you.
Suzanne.
<unk>.
Neither of them Tomorrow true hung up English ones, either trial launch volume pressure.
Sure one other thing I'll point in going broader than I'm doing cooking food grew up no showers, Ohio Tricia you can go through with using that hydrogen each is a high end equal contract.
Number two one which was your time when I used in lithium <unk> yen, each leasing who routinely sooner than usual tuition on.
Critical path.
We wanted to accomplish.
This is the translation from our CEO Dk. So thank you for the question.
Transformation and English industry upgrade in Chinas used car market is well underway. We genuinely welcome all responsible participants committed to fostering trust with consumers and.
Elevating the industry standard going forward in China's used car landscape and those retailers, who emphasized product quality customer experience integrity and compliance.
And probably be at the forefront and collectively we have the potential to steer the industry towards a stronger growth on broader expansion.
Yeah.
No wonder they are pushing.
Sure.
Please proceed.
Oh.
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Puneet with whom hung out other strategies, Zambia will turn down.
So it's my belief that the used car sector is not a winner takes all market each retail model and find if Nissan flourish.
To draw from a mature and Mercury analogy consider the U S. We're at Carmax is leading used car retailer and captures less than 3% of the market share, whereas branded dealerships represent around 40% is not about cutthroat competition, each player's happening through their spring catering to a specific brand or pricing segment.
Better buying and nurturing better customer base that you published mutual respect within the market.
So comparing to our U S peers, but we and new car dealerships in China still has significant growth potential.
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Consider the only from somebody within that team.
Like I said eqt's yet.
And in comparison to new car dealerships.
Into but used car arena or a unique selling proposition as the contrast between our already extensive superstores and the more niche specialty stores. So operating under our warehouse style superstore model, we emphasize volume and turnover, we pride ourselves on the vast array of choices available.
To customers with thousands of vehicles under a single roof. Moreover, we possess the industry's most advanced largest scale used car reconditioning factory.
With a streamlined reconditioning process and cutting edge digital management, we offer a cost effective solution without compromising on vehicle quantity.
When comparing vehicle types and pricing with new car dealerships, we believe our portfolio is both compelling and competitively priced.
And that essentially sums it up thank you for the question.
Yes.
Thank you.
That concludes our call today I will now hand, the call back to management for any closing remarks.
Alright. Thank you. Thank you again for joining today's call and for your continued support for our two Houston, we look forward to speaking to you again very soon in the future. Thank you bye bye bye.
Thank you.
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