Q1 2025 Uxin Ltd Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the you can earnings conference call for the quarter ended March 31 of 2025 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 if you have any objections.
You may disconnect at this time.
Speaker Change: I would now like to turn the conference over to your host for today's conference call. Mr. Jack Wayne. Please go ahead Jack.
Jack Wayne: Thank you operator, Hello, everyone welcome to <unk> earnings call for the first quarter ended March 31 2025.
D K: On the call with me today, we have D K, our founder and CEO and John Lee Our CFO.
Speaker Change: Because we will rebuild 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.
Speaker Change: Before we proceed I would like to remind you that this call may contain forward looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations.
Speaker Change: For detailed discussions of the risks and uncertainties. Please refer to our filings with the SEC and now with that I will turn the call over to our CEO D. K.
Speaker Change: Please go ahead Sir.
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Speaker Change: I mean, if I'm being a hook when they buy and hold strategy. He told them well for you, but we want to ensure compatibility.
Speaker Change: Yeah.
Speaker Change: Good.
Speaker Change: Hello, everyone I'm very pleased to connect with all of you again on our earnings call and I want to thank you for joining us today to facilitate better communication with both our domestic and international investors I will be sharing our updates in both Chinese and English.
Speaker Change: Yes.
Speaker Change: Hardy <unk> do well, Neil I think I'll call. It you know what you've got.
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Speaker Change: That's the way.
Speaker Change: So you got to know them cope with that.
Speaker Change: I know you're a hospital.
Speaker Change: In the first quarter of 2025, we achieved a strong operational performance.
Speaker Change: With retail transaction volume, reaching 7545 units up 442% year over year.
Speaker Change: This result, once again demonstrates the resilience of our business model and its significance.
Speaker Change: Potential despite the typical seasonal slowdown during the Chinese new year holiday, which impacted industry wide activity for about two weeks, but.
Speaker Change: We maintained a solid operational momentum our vehicle turnover remained high inventory management remained disciplined with turnover days capped around 30.
Speaker Change: We also continued to deliver.
Speaker Change: First in class customer experience, achieving a net promoter score of 65, one of the highest in the industry as our customer base continues to expand we are seeing strong.
Speaker Change: Boring brand recognition and a strengthening of our competitive position.
Speaker Change: Well, yeah, well failure, but my age home so what that told me sure they're shut down.
Speaker Change: Mitchell.
Speaker Change: You can catch a lot of them I would tell you know that box.
Speaker Change: Okay.
Speaker Change: Danielle woman to each other but maybe talk a little bit.
Speaker Change: So you don't show it on people.
Speaker Change: Okay should we you know with the Codell.
Speaker Change: Gotcha.
Speaker Change: In our two core markets.
Speaker Change: And.
Speaker Change: Our local market share. It has now exceeded 15% both locations are showing robust growth and are well on track towards full operational maturity. This year. Our priorities in these markets are to scale up inventory drive further sales growth and begin contributing positive cash flow to support the next phase of our.
Speaker Change: Business expansion.
Speaker Change: She might kind of towards that yes.
Speaker Change: Why am I, telling you would argue that in total for you yet.
Speaker Change: It sounds about right.
Speaker Change: Dundee what about what and how did she come out she talked about.
Speaker Change: Well the coke.
Speaker Change: ECL.
Speaker Change: One Oh, so Joe you can win.
Speaker Change: The woman that wouldn't be coupon well told you Dominic I'm wondering about your doubtful.
Speaker Change: We also made a meaningful progress in expanding our store network, our new location Hum began trial operations in February with.
Speaker Change: With a population of $14 million and nearly 5 million registered vehicles will harness one of China's largest automotive hubs often referred to as the nation's altobelli compared to CN in the used car market, hence, notably more at active making it a strategic choice for introducing our large format used car.
Speaker Change: Our retail model in central China.
Speaker Change: P J, yeah, well they may try and book.
Speaker Change: Well I'll, let you do your wife you got it.
Speaker Change: Contributing job all of them.
Speaker Change: But what would you pay let's say.
Speaker Change: So you can part of the chiller with obesity.
Speaker Change: What can be done.
Speaker Change: J.
Speaker Change: Yes.
Speaker Change: Yeah, maybe you don't get too cheap, we see quite a few channels.
Speaker Change: I'll, let you answer that.
Speaker Change: Leveraging the operational experience.
Speaker Change: The slides, we accumulated from our Xi'an and sports our pricing engine has adopted a smoothly through the HUD market.
Speaker Change: Accurate pricing allows us to stay competitive at both the sourcing at retail and accelerating our market penetration new.
Speaker Change: Meanwhile, the standardized the development of our reconditioning facilities and the continuous refinement of our staffing model, which we shaped over the several years.
Speaker Change: Positioned the wind store to scale efficiently from day one.
Speaker Change: Target for the time.
Speaker Change: Well, it's funny enough we'll shut.
Speaker Change: So don't be shelter.
Mike: Well, hi, Mike So yeah, that's a fun little yet lapped showdown.
Mike: Hum tailings real shout out.
Speaker Change: Okay all right.
Speaker Change: Well, maybe he was he might have jumped yeah, okay, okay, and you'd need a scanner.
Speaker Change: Dark pool.
Speaker Change: We're encouraged by the strong initial customer response, our high quality vehicle inventory and the professional customer service has been well received in the local market.
Speaker Change: Just over three months into Tri operations, both sales and you've been three either one store has been ramping up steadily with current retail volume already reaching approximately one third of the combined sales of our two existing stores based on this momentum we expect the one location to achieve profitability on an accelerated timeline.
Speaker Change: Compared to our previous stores.
Speaker Change: Yeah.
Speaker Change: We used the Congress here, well I'm sure that she might blip.
Speaker Change: Got you.
Speaker Change: Can you I don't see it sounds like she might sandeep.
Speaker Change: She might come but how will you say granular might shut out from Dr. John specially labeled yet you've got yet John.
Speaker Change: Well aren't you too well.
Speaker Change: Ill jump I thought you might tell me, if I'm going to talk about that.
Speaker Change: Yeah.
Speaker Change: In the meantime, we're also making solid progress establishing new super scores in additional major cities.
Speaker Change: We plan to open two to three new locations later this year together with our continued growth at our existing stores. These expansions are expected to further drive our operational and financial performance for the second quarter. We're on track to exceed 10000 retail vehicle sales, which would represent more than a 140% year over year.
Speaker Change: Yes.
Speaker Change: Well you can see I'm sitting on the journey.
Speaker Change: Can you tell a woman a sample job when we talk about that I'm sure.
Speaker Change: Oh junkies.
Speaker Change: So with that I'd like to turn the call over to our sample to walk you through the financial results John.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: If any portion of why that holds the Jeff Hart, our monthly you'll join US again, digesting and so they get to chip.
Speaker Change: Thank you Dk Hello, everyone. Since we have both the domestic and international investors participating today are we will continue to.
Speaker Change: Present, the Companys performance in both Chinese and English to better communicate with all of you.
Speaker Change: Thank you the woman that enjoy 70 hours should she cannot buy official.
Speaker Change: Poultry names when she shops, sometimes fees, how much and when we go into.
Speaker Change: The shot show that when you talk to the young quite a b C. I jumped the shark just.
Jason: Hey, Jason.
Speaker Change: In the first quarter, our retail transaction volume was 7545 units, representing a very strong 142% year over year increase on a sequential basis. However, retail transaction volume declined 12%, which reflects the typical seasonal slowdown associated with the Chinese new year holiday.
Speaker Change: Thank you Lorenzo so so malicious sitting here.
Speaker Change: Only some downtime just that one sorry about that initiative.
Speaker Change: Usual shutdown the PGA show ESP launching a constant battle, new Winder, Georgia power yet a.
Speaker Change: A slowdown, but powerful some depth and shallow trajectory I doubt the showroom.
Speaker Change: Well no that's wrong closely matches, what you end up with myself or quarters future, while central adaption judicial yeah, much with Australia.
Speaker Change: Well, mainly G E S P equate G box shield.
Speaker Change: Retail revenue for the quarter was 417 million RMB, representing 73% increase year over year, and a 16% decrease quarter over quarter, the average selling price or ESP for retail vehicles was 62000 RMB compared to 86000 RMB in the same period last.
Speaker Change: Year, well the ASP decline due to our strategic focus on more affordable humans restructure the strong growth in transaction volume more than offset the pricing impact and sustain our overall revenue expansion.
Speaker Change: Our current humans restructure is well aligned with the mainstream consumer demand and we believe pricing has now stabilized at a rational level as such we expect asp's remaining relatively steady in the near term.
Speaker Change: Sure Kishore pardon me our E P show slowdown should keep on Egypt.
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Speaker Change: Okay.
Speaker Change: Wendy.
Speaker Change: Now turning to our wholesale business and our wholesale.
Speaker Change: Section volume was 719 units in the first quarter down, 23% year over year, and 19% quarter over quarter.
Speaker Change: Total wholesale revenue was $22 5 million RMB.
Speaker Change: Combining retail and wholesale our total revenue for the quarter was 504 million RMB, representing a 58% increase year over year, and a 16% decline sequentially.
Speaker Change: For instance of the Maldives shoot back the cheat sheet.
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Speaker Change: Paul Chavez shifting women's chicken sandwiches normality session hunting when he mentioned well mainly T E C Maui.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Gross margin for the quarter was 7% up 40 basis points from six 6% a year ago and consistent with the prior quarter, we maintain the stable margins over the last three quarters and given the healthy supply and demand dynamics in our key markets, we see meaningful potential for further margin expansion as we scale.
Speaker Change: Yeah.
Speaker Change: Why so much sorry.
Speaker Change: So we'll see what.
Speaker Change: But it's either within telco hold EBITDA inclusive way I'd like to try it on hold.
Speaker Change: Great.
Speaker Change: We did see a modest increase in operating expenses this quarter, primarily related to the initial ramp up of our superstore, including the investments in staffing and infrastructure as a result, our adjusted EBITDA loss for the quarter was $8 9 million RMB. However, this still represented a significant 80.
Speaker Change: 78% reduction compared to the same period last year.
Speaker Change: One arm in.
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Speaker Change: When they meet using join shout out way.
Speaker Change: Wait you asked are you a hand holding.
Speaker Change: Sometimes we talk about it.
Speaker Change: So on the social so Egypt Jordan.
Speaker Change: Looking ahead to the second quarter of 2025, we expect that retail transaction volume to be in the range of 10000 to 10500 units representing year over year growth of over 140% total revenue.
Speaker Change: <unk> to be between 630 million RMB 660 million RMB.
Speaker Change: You go to Washington, Tien Tsin.
Speaker Change: I should go with Deutsche element being pressured with balances. So that concludes our prepared remarks for today. Thank you everyone. Operator, we're now ready to begin the Q&A session.
Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you're using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Anytime your question has been addressed and you would like to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Say Die: And the first question will come from say die with T. F Securities. Please go ahead.
Speaker Change: Yeah, So Ken can jump in.
Say Die: Hum.
Say Die: So dollar wise that social should you you called out.
Say Die: Thank you.
Say Die: When you got from trusted partner either in fact gotcha.
Say Die: Without telling you for my question.
Say Die: Congratulations on the strong good how's that.
Say Die: That's great thoughts.
Say Die: The team at book, that's in New York.
Say Die: Market in China.
Say Die: Hum.
Say Die: All right.
Say Die: Could you share how this is impacting.
Say Die: The car business.
Say Die: So does that mean that you and.
Say Die: Oh, well I forgot it.
Say Die: Right.
Speaker Change: And George for Dom South how that splits out was there a lot quicker yourself or your technical in nature, It's four times on all of them.
Say Die: Social point there wasn't double.
Say Die: But on top of what's possible.
Say Die: Of course, we can get close to kind of yes, we tend to look at the top of that our BBC College I'll wait till they can be a teacher to a job well done.
Say Die: Buda.
Say Die: Yes.
DK: Alright. Thanks for the question. This is dk and I'll answer that question. It is true that when the price gap between new and used vehicles and narrows, the especially under the same brand. It can influence consumer purchasing behavior as such with the recent price competition in the new car market has created some pricing pressure on <unk>.
DK: Used vehicle segments.
DK: We experienced a similar cycles in the past and over time, it would build a mature playbook to navigate these challenges and mitigate the.
DK: The impact.
DK: Yeah.
DK: Sure.
DK: Yes sure.
DK: Our metallic laid out for you.
DK: I will tell them to go down in California.
DK: It didn't hurt us.
DK: Yeah.
DK: Right.
DK: And that's really on the corporate governance.
DK: Welcome calls in 'twenty on ebay.
DK: But you don't need quite a proposal.
DK: Sure.
DK: So first we respond swiftly as through dynamic pricing to protect our inventory turnover, our real time pricing intelligence intelligence system continuously scans.
DK: Water market for price changes once shifts architected, particularly in the new car segment, we promptly adjust pricing on relevant used car inventory to maintain competitiveness and accelerate sales and so this helps minimize any risk of inventory devaluation.
DK: It's a partial quarter.
DK: So you shouldn't put jacobian ssangyong.
DK: Yeah, you need the geography for Taco Bell.
DK: Well I think for a number of parts from.
DK: Jim countries vehicle.
DK: When you see our liquidity.
DK: Second we actively manage the structure of our inventory nearly new vehicles typically those under three years old or more sensitive to fluctuations in new car pricing.
DK: Response, we maintain a balanced and diversified the inventory to.
DK: Inventory mix to reduce our exposure to these highly sensitive models during times of volatility.
DK: Yeah.
Speaker Change: Oh Gee Lynn I forgot what are you doing.
Speaker Change: It's getting them gradually.
Speaker Change: That said that up until we get all the T V.
Speaker Change: Yeah.
Speaker Change: I need him.
Speaker Change: Oh sure without going T a pleasure to meet you.
Speaker Change: Wondering if he's got accomplished.
Speaker Change: Thank you she standpoint.
Speaker Change: Okay, I kind of took out the kind of do what.
Speaker Change: Yeah.
Speaker Change: Well I meant the opinion the shutdown because of automobile.
Speaker Change: Yeah.
Speaker Change: Lastly, it's worth noting that this current round of price competition is largely concentrated.
Speaker Change: The segment given that most automakers are already operating with very tight margins.
Speaker Change: We believe this level of price cutting is not sustainable in fact that we've seen recent policy signals and commentary from official media channels in China advocating against the prolonged extensive discounts will be with this pricing pressure as a short term situation rather than the long term structural shift overall, we believe the the impact of current.
Speaker Change: New car price war on our overall business remains manageable and we are confident in our ability to achieve our growth objectives for the year.
Speaker Change: Oh, you're talking what else laid out.
Speaker Change: Okay.
Speaker Change: Alright, that's all we're prepared to your question.
Speaker Change: And Oh, yeah, operator hold on we have a we we received another question from Mr. Gary divorce Yang from Watercolor Research, we'll just take this opportunity to ask that as well.
Gary Yang: The question is we saw data, indicating that <unk>.
Speaker Change: Houston and UBS transactions in China grew over 20% year over year in Q1. This year can you share how much in UBS. Currently represented in your business you know our business mix and whether you have plans to increase your exposure in the future.
Speaker Change: Onshore Hugo Jaeger.
Gary: Gary the wash acts on water Tower research Moneta Lindsay at headwind here sure.
Gary: Or should we say ensure easy to accomplish and then artwork <unk> in Colombia, and Russia. So essentially you always have wuchang familiar are sure sure yeah, well leased with washout.
Paul Chavez: Paul Your Weibo adhesion with familiar Aro <unk> Aro to a joy mangano Joey doomed.
Gary: It seems that wont be it either.
Gary: Oh.
Gary: Okay.
Speaker Change: She's worked out in the long haul church, where you're jostled ground, Turkey, all your drone shimomura in seed for the Chinese traveler.
Tom: Thank you Tom for longer.
Gary: Yeah.
Gary: He talked about drone seemingly in sheet.
Gary: They are trying to be quick.
Joe: Hi, Joe.
Gary: High School, you take or not.
Gary: Got you.
Teekay: Yes. This is teekay and I'll answer. This question you are right China's <unk> market the scoring rapidly.
Gary: The new car segments, and UBS now account for over 60% of total sales.
Speaker Change: I'm, a broader market perspective, prospectus and Evs currently represent about 9% of China's total vehicle population, which stands at around 350 million. This indicates that the <unk> segment is still in the early early stage of structural expansion with significant headroom for long term growth.
Speaker Change: Well, maybe that's wrong.
Speaker Change: Oh sure Joe either switched over to.
Charlie: Can you Charlie.
Charlie: Yeah. Thanks, Ya Man Sheetrock, Alright, Joe you'd have enough for someone else youre trying to borrow for Joey.
Speaker Change: No not won't be junior.
Gary: Sure.
Gary: Now that goes with it.
Gary: Article trailing full year, well don't you don't see I think.
Speaker Change: Hi, Joe Joe opinion.
Gary: Goodbye.
Gary: The chunghwa, our which with our top MPD alcohol.
Gary: We are actively tracking this trend in the used car space. According to the China Automobile dealers Association approximately 400000 used in evs or transacted at nationwide from January through April.
Gary: Up from more than up up more than 30% year over year accounting for roughly 7% of total used car transactions are you seeing any these accounted for approximately 9% of our retail unit sales from January through April of 2025, representing more than 100% year over year growth business.
Gary: Above the national average and reflects both increasing demand and our ability to capture a meaningful share of this emerging segment.
Gary: Turning out in parallel with them don't want to you shuffle.
Gary: But you shouldn't be alone.
Gary: Well, then the Tango Tien Chau.
Pete: So Pete.
Pete: Pete.
Pete: Nothing that he told me if you don't see I'll call it out because I'm building.
Joe: Hello, Joe.
Pete: Sure.
Pete: Almost all of it.
Pete: She may.
Pete: We argue with that.
Pete: Please see the trend as you go to appeal heartburn.
Pete: Okay.
Pete: Sure.
Pete: With that said, we do not manage our inventory based on fuel type our sourcing.
Pete: Action reconditioning pricing and sell systems are well established and technology technology driven.
Pete: As long as a vehicle meet our quality standards. It will be listed in our inventory regardless of these powertrain type we fully embraced the structural evolution of China's auto market.
Pete: As the market continues to expand its sure its share within our business will naturally increase we are well prepared to support this transaction.
Pete: To support this transition and capture the long term growth opportunities.
Pete: It will bring us.
Pete: And so that's the answer that we have for you for the question.
Pete: Yeah.
Pete: This will conclude our question and answer session I would like to turn the conference back over to management for any closing remarks.
Speaker Change: Alright. Thank you all for joining US today, we look forward to speaking with you next quarter. Thank you.
Pete: Okay. Thank you bye bye.
Pete: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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