Uxin (UXIN) Q1 2026 earnings call transcript

Thank you, Operator. Hello, everyone. Welcome to UCIN's earnings conference call for the first quarter ended March 31, 2026. On the call with me today, we have DK, our founder and CEO, and John Wynn, 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 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.

For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC. Now with that, I'll turn the call over to our CEO, DK. Please go ahead, sir.

Hello everyone, and thank you for joining Yuxing's Earnings Conference call today. It is a pleasure to reconnect with our investors through this call, and we appreciate your continued interest and support. To better facilitate communication with both our domestic and international investors, I will be sharing our latest business updates in both Chinese and English.

In the first quarter of 2026, our business continued its strong growth momentum. Despite the seasonal impact of the Chinese New Year holiday on used car sales, retail transaction volume reached 16,530 units, representing a 119% year-over-year increase. This marks the eighth consecutive quarter in which our retail transaction volume grew by more than 110% year-over-year. While sustaining rapid sales growth, we maintained inventory turnover at approximately 30 days, and gross margin was 7.7%, remaining stable overall compared with the previous quarter.

Our net promoter score further improved to 68 during the quarter and remained above 65, continuing to rank among the highest in the industry.

出现了比较大的滑坡。 The recent developments in China's automotive market have attracted considerable attention from investors, and I would like to share some of my observations. Since the beginning of 2026, China's auto market has indeed experienced a slowdown. Cumulative new vehicle sales declined by 20% year-over-year during the first five months, with internal combustion engine or ICE vehicle sales facing even greater pressure.

In both April and May, new ICE vehicle sales fell by more than 35% year-over-year. The used car market also solved significant price adjustments starting in April, with prices of mainstream used ICE vehicles declining by 10% to 15% within one to two months. Under such market conditions, used car retailers must meet much higher requirements in pricing, inventory turnover, capital efficiency, and risk management.

Although the declining vehicle prices have created short-term pressure on profitability, China's used car market still achieved a modest 2% increase in transaction volume during the first five months of the year, significantly outperforming the new vehicle market. Consumer acceptance of used cars in China continues to improve. In particular, following fluctuations in new car pricing and the rapid adjustment in residual values of ICE vehicles, high-value-for-money-used vehicles are expected to become even more attractive to consumers.

Looking at a longer-term perspective, the United States experienced a similar cycle during the global financial crisis from 2007 to 2009. Cumulative new vehicle sales declined by roughly 35% during that period, and many new car dealerships and used car retailers went out of business. However, leading independent used car retailers emerged stronger from the downturn, delivering years of sustained growth in sales volume, profitability, and market share. 因此我们认为行业调整往往也是竞争格局重塑的过程 本轮车市动荡过去后 中国庞大的汽车爆量较发达国家仍偏低的27出率 以及消费者对高性价比车辆的需求都会继续支撑20行业的长期增长 我们很有信心优先过去几年持续建设的高主转纪律 高品质把控和高服务质量的超级大卖场模式 will in the current industry-specific adjustment achieve more competitively, and become the biggest winner in the China-owned car.

Therefore, we believe that industry adjustments often lead to a reshaping of the competitive landscape. Once the current volatility in China's automotive market eases, the country's large vehicle ownership base, the still low level of use per transactions relative to vehicle ownership compared with developed markets, and consumers' growing demand for affordable, high-quality vehicles will continue to support the long-term growth of the used car industry. We are highly confident that our superstore model, built over the past several years on disciplined inventory turnover, stringent quality control, and superior customer service, will further strengthen our competitive advantages during this period of industry adjustment and positioned you seem to emerge as the biggest winner from the transformation of China's used car retail industry.

In addition, our Tianjin Superstore officially commenced operations in March. As our first project in North China, the Superstore can accommodate more than 3,000 vehicles for display and sale. With the opening of the Tianjin Superstore, we now operate six superstores nationwide. Furthermore, we recently announced strategic partnerships with the municipal governments of Chongqing and Shijiazhuang to jointly invest in and operate used car superstores.

As our nationwide superstore network continues to expand, we expect our service coverage, regional synergy, and brand influence to further strengthen, reinforcing our leadership in China's used car retail market.

Looking ahead to the second quarter we expect retail transaction volume to exceed 18 units continuing our strong growth trajectory At the same time we reaffirm our target of achieving more than 100 year growth in retail transaction volume for the full year of 2026 I'll be right back to this.

Next, our CFO John will show you the situation on the business. John, please. With that, I'll turn the call over to our CFO to walk you through the financial results. John, please.

Okay, thank you, DK. Hello. Next is me to share the business of the business. Thank you, DK. And hello, everyone. I will now walk you through our financial results for the quarter.

The first year of the year of the year of the year of the year of the year of the year of the year of the year of the year of the year is the traditional business. But our current year of the year of the year is still strong. The sales of the year of the year is 16,530. 同比增长119% 原有卖场的销量在持续爬升 新卖场陆续投入运营 与其未来几个季度 我们的零售销量 都将保持较高速的增长 The first quarter is traditionally a slower season for used car sales due to the Chinese New Year holiday Nevertheless, our business continued to deliver strong performance during the quarter Retail transaction volume reached 16,530 units representing a 119% year-over-year increase.

Sales volume at our existing superstores continue to ramp up, while new superstores gradually commence the operation. We expect our retail transaction volume to maintain a strong growth trajectory over the coming quarters.

The total cost of the car is 6.1 million yen. The previous year is 5.9 million yen. The last year is 6.2 million yen. The overall rate is a balanced rate. Retail vehicle sales revenue totaled 1.01 billion RMB, up 118% year-over-year and down 10% sequentially. The significant increase in retail transaction volume was the primary driver of the year-over-year growth in retail revenue. The average selling price or ASP of retail vehicles was 61,000 RMB compared with 59,000 RMB in the previous quarter and 62,000 RMB in the same period last year, remaining generally stable.

In the total of the sales and sales, the total total of the sales and sales is 10.74 million USD, which is the total of 113% and is the total of 10%.

Turning to our wholesale business, our wholesale transaction volume was 1,681 units in the first quarter, representing a 134% year-over-year increase and a 32% decline sequentially. Total wholesale revenue was 27.9 million RMB Combining both retail and wholesale Total revenue for the quarter reached 1.074 billion RMB Up 113% year over year And down 10% sequentially 本季度的毛利率是7% 保持在一个相对稳定的水平 较上个季度的6.8%增长0.2% 较去年同期的7%基本质品 In general, the market rate will be lower than the old market rate. The market rate will be lower than the market rate. It has decreased this effect, so we have the market rate.

super stores naturally operate at lower growth margin levels than our more mature locations. However, the larger sales contribution from our mature super stores offset this impact and help maintain a stable overall growth margin. The previous year, the beta-reviewed rate of the beta is $3430,000. The previous year is $2721,000. The average increase is due to the winter-reviewed impact of the year-to-review. The price is due to the winter-reviewed rate of the year-to-review. That, as compared to the previous year's previous year's return, we increased about 2,500 yen. It is mainly due to the previous year's return period of the new market market. We also have the first-time return period of the market market. Adjusted EBITDA loss for the quarter was 34.3 million RMB, compared with 27.2 million RMB in the previous quarter.

The sequential increase was primarily attributable to the seasonal impact of the Chinese New Year holiday on sales volume. Compared with the same period last year, adjusted EBITDA loss increased by roughly 25 million RMB, mainly because our newly opened super stores are still in the early stages of ramping up operations, and we also made upfront investments in staffing to support our future superstore extension plan.

Looking ahead to the second quarter of 2026, we expect retail transaction volume to be between 18,000 and 19,000 units, representing year-over-year growth of 73% to 83%. We expect total revenue including retail vehicle sales revenue, wholesale vehicle sales revenue, and other revenue to be between 1.05 billion and 1.1 billion RMB.

That concludes our prepared remarks for today. Thank you, everyone. Operator, we're now ready to begin the Q&A session.

Okay. From the EGDU, I will answer this question. That's the whole thing. The second half of the year is the second half of the year. to see this more明顯 The used cars started to see a 10% to 15% drop starting April. So this is why we are seeing a drop in the second quarter.

Okay, that from 4月以来, the new car market actually adjusted very quickly. So it has a big impact on our two-year car industry. So in such a serious change, our economy will be more careful, and to seek healthy growth. Healthy growth will be less than short-term growth, so the growth of the growth will be more powerful. Since April, we have seen rapid price adjustments in the new car market, particularly for ICE vehicles. This has also pressured gross margin across the used car industry. Under such volatile market conditions we have become more cautious in our operations We will prioritize healthy inventory turnover over short processing 而结果 在第二个月的货币会有更加压力 燃油车的价格 如果在当前的价格基础上仍继续大幅下探 那我们的毛利将继续成压 但是从6月初的状态来看 新车价格目前还是 稀稳的一个状态 由于因为我们的周转速度很快 前期受价格波动 影响较大的库存车辆 现在也在逐渐的出轻 我们预计在三季度的时候 毛利率会有显著的提升 甚至回到正常的水平 但是整个二季度 毛利会有一个非常大的压力 如果汪市市的車價仍然會在近日上,我們的貨幣會稍為持續航空的地上.

但是,我們看到從中期的新年度,新車價格會有很大幅度的貨幣. 我們的貨幣會經常在於新年期間的貨幣會影響了快速的貨幣會在於新年期間的貨幣會變得更新的貨幣. As a result, we expect growth margin to improve meaningfully in the third quarter and potentially return to normal levels.

That's my answer to your question. Thank you.

好,還是我來這樣回答您的問題. 那西安賣場是我們最早的超級賣場, 它是在2022年的12月份開始投入運營。 當時我們需要打磨業務模式, 需要探索整个卖场的采购定价 整备库存销售 售后等一系列的运营体系 目前西安卖场已经进入了比较成熟的阶段 去年的高峰月份的单月销量达到2700台 当地市贷率约25% 也在当月实现了单卖场的盈利 谢谢你问一下 这是John 我会拔你问一下 Xian was our first superstore and officially commenced operations in December 2022. At that time, we were still building and validating the entire superstore operating model, including vehicle sourcing, pricing, reconditioning, inventory management, sales conversion, and customer service. Now, the Xian superstore is in a much more mature stage. Last year, its monthly retail transaction volume peaked at 2,700 units, representing roughly 25% local market share and it has already achieved profitability at the store level 那我们确实看到随着过去几年运营经验的积累 我们新开卖场的爬泊速度明显要加快 以武汉卖场和郑州卖场为例 那武汉卖场是25年的3月份开业 在经过了大概6个月 它的单月销量出过了1000台 郑州卖场是2025年9月开业 大概用了四个月单月的销量就突破了1000台 尤其是郑州是一个竞争非常非常激烈 二次交易非常活跃且竞争激烈的市场 能够在矫短的时间内实现这样的销量的爬坡 说明我们的模式在新城市的复制能力是越发的成熟的 What we have clearly seen is that with several years of operating experience, the ramp-up period for new superstores has become significantly shorter.

Take Wuhan and Zhengzhou as examples. The Wuhan Superstore opened in March 2025, and its monthly retail transaction volume exceeded 1,000 units within about six months. The Zhengzhou Superstore opened in September 2025, and its monthly retail transaction 这新卖场的改善主要来自于几个方面 首先是我们的采购的定价和库存管理的体系更加成熟 可以更快的建立适合当地市场的库存结构 那第二个呢 就是我们的销售的这个整个的团队的标准化的能力也更强 新店不需要从零开始摸索 而是复制已经验证过的这种运营的方法 第三个呢 就是随着整个优信的品牌的影响力的逐年的提升 新店在货客 在客户的信任建立上 也比早期的这种 之前的卖场更快 之外我们在各个城市的选址 评估能力也更强 所以结合当前的地产的周期 我们可以拿到更好的卖场的位置 This improvement is driven by several factors First our procurement pricing and inventory management system have become much more mature allowing us to establish the right inventory mix for each local market more quickly Second our sales and operations teams have become much more standardized allowing new superstores to replicate operating practices that have already been proven successful Third as the using brand continues to gain recognition 新超市場能夠吸引客人 和建立信用更快 比起早期的信任 在其他日子 更加上 我們的地位選擇 和項目調查的功能 都更加大 我們也會利用 現實價格的環境 幫助我們優勢更好的位置 新超市場能夠 從收入的角度來看 銷量的爬坡的加快 會直接到收入的公開的提升 從盈利角度來看 新店的早期 仍然会有场地整理 人员的前置的投入 因此盈利的能力 会滞后于销量的爬坡 但随着销量规模的扩大 库存周转的稳定 毛利率的逐步的改善 以及我们费用的效率的提升 新店就会逐渐的 接近成熟店的水平 从一个利益的观点 更加的销售价格 创造成的软件 创造成的更加的利益 所以总体来看呢 西安证明了那我们的单店模型是可以跑通并实现盈利的 那武汉和郑州呢 证明就是这个模型的复制 我们模型的复制正在效率正在提升 随着未来更多的这个新店的开业 我们会继续的综合的来考量销售爬坡的速度 毛利率啊 以及库存周转和单店盈利的表现 来确保扩张是高质量的可持续的 谢谢 这是我对您的问题的回答 谢谢 谢谢 谢谢 谢谢 谢谢 谢谢 谢谢 谢谢 谢谢 然后我们接下来的问问 我对我对 Xingshin Li 与CMS 请进行 好的 感谢管理层给我这次提问的机会 然后我的问题是 就是最近我们看到 就是公司有公告 就陆续的和一些地方政府的战略合作 然后想再跟管理层再详细的了解一下 就是咱们今年的开店节奏是怎么样的 以及前面提到如果整个出事的行情没有回暖 公司的开店节奏是否会放缓 那下面我自己来翻译一下 We noticed that the company has recently announced a number of strategic partnerships with local governments.

Thank you for your questions. This is DK. I will take your questions. Regarding our expansion plan, we expect to open 4 to 6 new superstores in 2026. The Tianjin Superstore officially commenced the operations in March, and it is our first project in North China. We have also announced projects in Chongqing, Shijiazhuang, Yinchuan, Wuxi, and Guangzhou. At the same time, we're in discussions with a number of other local governments across China regarding future cooperation opportunities.

These projects are at different stages of development. Some are approaching trial operations, while others are still in the facility preparation, team building, and inventory sourcing stages.

As for market conditions, we have certainly seen volatility in both new and used vehicle prices this year, which creates short-term pressure across the industry. However, industry adjustments also tend to accelerate consolidation. For companies with strong inventory turnover, pricing capabilities, standardized reconditioning processes, and trusted customer service, periods like this can create opportunities to gain market share.

Therefore, we will not change our long-term strategy of nationwide expansion because of short-term market volatility. At the same time, we will remain flexible in discipline and execution. If market conditions remain challenging, we may take a more conservative approach to the pace of new store openings, inventory ramp-up, and operating expenses. Our priority will remain cash efficiency, inventory turnover, and store-level operating quality. At this point, our plan to open four to six new super stores this year remains unchanged. Our target of achieving more than 100% year-over-year growth in retail transaction volume for 2026 also remains unchanged. We will continue to manage the rollout of each project based on market conditions and ensure that our expansion remains high quality and sustainable.

Thank you.

Thank you for your questions. This is DK. I'll take your question. Overall, China's auto market has been under pressure this year. Taking May as an example, passenger vehicle sales declined by nearly 22% year over year. Within that, ICE vehicle sales fell by 39%, while NEV sales declined by 7.5%. While NEV sales also declined, the decline was much less severe than that of ICE vehicles. As a result, MEV retail penetration exceeded 60%.

The used car market is fundamentally built on vehicle ownership, and the supply of used cars is closely tied to the ownership structure. Based on what we have seen over the past several months and in the market today, used ICE vehicles have been affected primarily by pricing pressure. However, from an overall sales mix perspective, we have not seen a meaningful increase in the share of NEVs in the used car market. The reason is quite simple. NEVs still account for less than 15% of total vehicle ownership in China.

重新使这个车辆具有性价比 那本轮车市的下跌是中国正式步入乘除市场的一个非常标志性的状态 这次的二手车价格下跌确实非常惨烈啊 但这种惨烈的下跌实际上是保值率的一次性到位 中国三年期二手车当期保值率也就是和当前新车价格的对比 大概之前啊大概是68%到72% 那么这一次跌完了以后呢跌到了58%到60%跌了十个点 So this value is actually starting to get to the European, Japan and the mature market.

But in many ways, this adjustment represents a one-time reset in residual value. The residual value of a three-year-old used vehicle in China, measured against current new vehicle prices, used to be around 68% to 72%. Today, that figure has declined to roughly 58% to 60%, down 10%, bringing it much closer to levels seen in mature markets, such as the United States, Europe, and Japan.

will continue to move to the market. And China's used car market will move closer to the supply and demand dynamics being a mature market.

That's my answer to your question.

Thank you again for joining today's call and for your continued support and using. We look forward to speaking to you again soon in the future.

Thank you.