Uxin (UXIN) Q2 2026 earnings call transcript

Thank you, Operator. Hello, everyone. Welcome to Yuzhen's earnings conference call for the second quarter ended June 30, 2026. On the call with me today, we have DK, our founder and CEO, and John Lin, 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 column 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 Eugen'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. I would like to begin with an overview of our operating performance this quarter, and then discuss some of the adjustments we have made in response to changing market conditions.

The second-year-old car sales of the two-year-old car sales is only 4.4%. But the new car, especially the oil price price, has continued to spread the market market. The new car sales has increased the economy. The last year, the company has been released over 3,000 million of 10-6 million cars. The entire car sales will be released over 20 million.

2026 has become a year of accelerated consolidation for China's automotive industry. The new car market has remained under pressure since the beginning of the year. In the second quarter, new passenger vehicle sales in China declined by more than 20% year-over-year, with internal combustion engine or ICE car sales down nearly 40%. By comparison, demand in the used car market has shown greater resilience, with nationwide used car transactions declining by only about 1.4% year-over-year in the second quarter. However, the rapid decline in new car prices, particularly for ICE cars, continued to flow through to the used car market, accelerating industry consolidation.

Nearly 30,000 brick and mortar used car dealerships exited the market during the first half of the year, and we expect 50,000 to 60,000 dealerships to exit for the full year, representing more than 20% of the industry. Thank you. Yuxin significantly outperformed the broader market in the second quarter. Our retail transaction volume reached 19,610 units, up 89% year-over-year and 19% sequentially. Our net promoter score, or NTS, remained at 68, continuing to rank among the highest in the industry. Price volatility during the second quarter had a temporary impact on our growth margin, and we proactively accelerated inventory adjustments and sell-through. Since the beginning of the third quarter, our per-unit profitability has recovered rapidly, and we expect our overall growth margin to recover to above 6%.

Since the beginning of this year, we have also continued to advance the digitalization of our business while systematically upgrading our operations. As we accumulate more transaction data, our pricing system has improved significantly in pricing accuracy, coverage, and response time, enabling us to respond to market changes more quickly and accurately. These improvements in our pricing capabilities are also reflected in our operating efficiency.

Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. We believe 2026 could mark the beginning of a new phase in the evolution of China's used car industry. Traditional operating models are rapidly losing ground, while the industry is gradually shifting from a fragmented and non-standardized model toward a more scaled, standardized, and digitalized retail model. We believe the next two to three years will be a critical period for the reshaping of China's used car market.

In this process, Yuxing will continue to keep the top-down. 过去几年我们已经完成了超级卖场模式的验证 并在车辆定价 检测整备 库存周转和客户服务等核心运营能力上持续积累优势 现在我们能够保持20天左右的高库存 高速库存周转 并拥有良好的单车盈利水平 现有卖场的销量和运营效率将会持续爬破 The new market, including Yen川, Guangzhou, Wuxi,重庆, 石家庄 and Sjong's six projects are in the same place. We are also in a stable way to promote new cities with more cities, to continue to expand the U-Shin market market in the entire country.

Throughout this transition, U-Shin will continue to maintain its leading position. Over the past several years, we have validated our superstore model and continue to strengthen our core operating capabilities across vehicle pricing, inspection and reconditioning, inventory turnover, and customer service. Today, we are able to maintain a rapid inventory turnover of approximately 20 days while achieving healthy per unit profitability.

Sales volumes and operating efficiency at our existing superstores will continue to ramp up, while six new superstores in Yinchuan Guangzhou Wuxi Chongqing Shijiazhuang and Shaoxing are currently under development At the same time we steadily advancing discussions with additional cities on new partnerships as we continue to expand our warehouse-style superstores' network nationwide.

Finally, I would like to share our outlook for the third quarter. Our inventory turnover and profitability have both returned to healthy levels. However, we believe risks in the automotive market remain elevated. We are therefore maintaining a prudent operating approach, placing greater emphasis on inventory turnover per unit profitability and capital efficiency. For the third quarter, we expect retail transaction volume to reach between 20,500 and 21,000 units, representing year-over-year growth of nearly 50%.

With that, I will turn the call over to our CFO to walk you through the financial results.

John, please. Thank you, DK. Hello, everyone. I will now walk you through our financial performance. In the second quarter, our retail transaction volume reached 19,610 units, up 89% year over year and 19% sequentially. Despite continued pressure across the broader automotive market, we maintained inventory turnover of approximately 30 days and delivered business growth well above industry level.

The price of the price is 1.0.6 million. billion RMB, up 78% year-over-year and approximately 7% sequentially. The average selling price or ASP of our retail vehicles was 55,000 RMB compared with 59,000 RMB in the same period last year and 61,000 RMB last quarter. While lower market prices resulted in a decline in ASP, the rapid growth in sales volume offset this impact. Our current price range covers the car needs of the vast majority of mainstream consumers. As price volatility in the automotive market gradually eases, we do not expect ASP to decline significantly from current levels and expect it to remain relatively stable overall.

The overall revenue of the company's annual revenue is 11.5 million yen. The total revenue of 75% is 75%. The total revenue of 7% is 7%. Turning to our wholesale business, our wholesale transaction volume was 2,289 units in the second quarter, up 88% year over year and 36% sequentially. Total wholesale revenue was 37.4 million RMB. Combining both retail and wholesale, total revenue for the quarter reached 1.151 billion RMB, up 75% year over year and 7% sequentially.

The second quarter, auto prices, particularly prices for new ICE cards, underwent a rapid adjustment over a relatively short period, which had a direct impact on the gross margin of our existing inventory. We also proactively accelerated the sell-through of cars affected by these price fluctuations. As a result, our growth margin fluctuated significantly during the quarter, reaching negative 0.7%, compared with 5.2% in the same period last year and 7% in the previous quarter. With the earlier inventory reset now largely complete and inventory turnover further accelerating, we have achieved a more stable and efficient balance between procurement and sales. Since the beginning of the third quarter, our per unit profitability has recovered significantly, and we expect our overall gross margin to recover to above 6% in the third quarter.

The total is stable. The EBITDA is 1.2 million USD. This is mainly影響 the market rate of the next step.

of the lower growth margin. Moving to our outlook for the third quarter, we are accelerating inventory turnover while maintaining a prudent inventory procurement strategy. We expect retail transaction volume to be between 20,500 and 21,000 units, with total revenue between 1.16 billion RMB and 1.19 billion RMB, and gross margin recovering to above 6%. As our growth margin recovers and operating efficiency improves we expect our profitability to improve further 在价格完成交割。 与此同时,余悦资本也在积极推进其对公司投资的ODI的备案。 Meanwhile,Joy Capital is also actively advancing the overseas direct investment or ODI filing process for its investment in the company.

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

OK 谢谢您的问题 我来回答您的问题 我们现在能够把库存周转 从过去的30天左右 缩转的20天左右 尤其在过去的 尤其在第三季度 最近两个月是这样的一个周转的表现 背后首先是基于AI的运用 我们升级研发了一系列的技术能力 正在AI相关的技术能力 正在逐步的应用到定价 调价和风险预警 这些核心的环节中 那我们的定价的准确率 覆盖率和响应速度 都显著的持续的提升 所以目前对于库存周转效率的改善比较明显 Thank you for the question There are several factors behind our ability to shorten inventory turnover 从20月中的30天到20天 首先,我们将用AI在使用上的使用 的技术技术和技术的技术 所在进入的技术 在某些区域的区域 像是价格,价格,价格,价格,价格 的区域,价格和价格的区域 和价格的价格 在长期上有所在增长的 我们已经看到了有免质的增长 and inventory turnover efficiency.

第二环节连接的更加紧密,车辆从采购到销售的整体效率也自然会进一步的提升。 As these different parts of our operations become more closely connected The overall efficiency from procurement through sales has also improved 那对于二手车零售的库存持有的时间越长 所承担的价格的风险就会越大 更快的周转可以显著缩小我们的风险的敞口 那现在这样的市场出现波动的时候 就会减少库存减值带来的损失 因此从完整的经济周期来看 高中转不仅不会牺牲单车盈利 反而更有助于实现一个稳定健康的综合的单车的盈利 同时高中转也意味着我们的库存资金和人员 可以支撑更大的销售的规模 我们的人项和资金的使用效率也会持续提升 我们的经营杠杆也会进一步的释放 The longer a used car remains in inventory, the greater the price risk we assume. Faster turnover significantly reduces our risk exposure and helps limit inventory impairment losses when the market fluctuates.

Therefore, when viewed across a full operating cycle, Faster turnover does not come at the expense of per-unit profitability. Instead, it helps us achieve more stable and healthier overall per-unit profitability. at the same time, faster turnover allows the same amount of inventory capital and the same workforce to support a larger sales volume. As workforce and capital efficiency continue to improve, we also expect to unlock greater operating leverage.

Thank you for the question. Based on recent market performance, overall auto consumption remains relatively weak. Nationwide passenger vehicle retail sales declined by more than 20% year-over-year in both July and August, with ICE car retail sales down approximately 40%. This pressure has also carried over into the used car market. Nationwide used car transactions declined by 6 year in July and by 11 in August we believe the most severe adjustment occurred in the second quarter. New car prices, particularly prices for ICE cars, declined rapidly over a relatively short period, which had a significant impact on used car prices.

Since the beginning of the third quarter, the market has remained under some pressure, but we have not seen the kind of sharp monthly declines that occurred in the second quarter. Overall market conditions are gradually stabilizing.

At the same time, industry consolidation is continuing. Nearly 30,000 brick-and-mortar used car dealerships exited the market in the first half of this year, and we expect 50,000 to 60,000 dealerships to exit the market for the full year, representing more than 20% of the industry. We believe this market adjustment will accelerate the reshaping of the industry, with market share becoming increasingly concentrated among companies with scale, standardized operations, and digital capabilities. For Yuxin, this also creates an opportunity to gain market share. we have maintained a relatively prudent approach to inventory procurement in the third quarter, while shortening inventory turnover to around 20 days. At the same time, we expect our retail transaction volume to continue growing by nearly 50% year over year, significantly outperforming the broader industry.

The fourth quarter is typically a peak season for the used car market. Our current view is that market volatility is unlikely to be as severe as it was in the second quarter, although risks remain. We will therefore adjust our inventory levels prudently based on market conditions. If prices stabilize further, we will accelerate inventory procurement. If volatility persists, we will continue to maintain rapid inventory turnover and drive sales growth through fast turnover and greater capital efficiency to reduce the impact of price fluctuation.

That's my answer.

Thank you for the question. This is what I'll answer. In the past few years, we have completed the sales market model and started the improvement of the entire market. The company's sales, sales, and the key to the market is also increasing. I think the company is going to be in a right direction. When I think about the market performance, I decided to use my own money to improve the company's stock market and to express the trust of the company's long-term value.

Thank you for the question. Over the past few years, we have validated our warehouse style superstore model and begun expanding our footprint nationwide. Our sales volume, operating efficiency, and core capabilities have all continued to improve. I believe the company is moving in the right direction. Given the recent performance of our share price, I decided to use my own funds to purchase additional using shares in the open market as a tangible demonstration of my confidence in the company's long-term value.

According to the report, the data I managed to manage the market plan on 6月30日 has set up a new investment plan for the 10B5-1. The plan is not超过每ADS $2.85.5 million of the company's ADS. According to the 90 days of the plan, this plan will be the plan to start. As previously announced, an entity controlled by ME established a Rule 10b-5-1 trading plan on June 30 to purchase up to $5 million of the company's ADS at a price of no more than $2.85 per ADS. Following the required 90-day cooling-off period, purchasers under the plan will be eligible to begin on September 28.

the demand for the company's stocks, the stock market, and the stock market market market, and the demand for the company's stock market market, is a process of increasing of the trading. The timing and pace of purchases will be determined in accordance with the pre-established trading plan and will strictly comply with Rule 10b 5-1 and other applicable securities trading rules. The actual amount that can be purchased on any given day will also be subject to factors such as the recent trading volume of the company's ADS. As a result, the purchases will be carried out gradually over time.

I remain highly confident in the company's long-term development. Through these purchases, I also hope to further align my personal interests with the long-term interests of the company and all of our shareholders.

That's my answer. Thank you.

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