UXIN Uxin Limited
$1.37
Uxin Limited Q2 F2027 Earnings Call Transcript
AI Conference Call Analysis
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Conference Operator
Ladies and gentlemen, thank you for standing by and welcome to Yuxin Earnings conference call for the quarter ended June 30th, 2026. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host for today's conference call, Ms. Ali Wang. Please go ahead, Ali.
Ali Wang
Head of Investor Relations (Host)
Thank you, operator. Hello, everyone. Welcome to Yushin's earnings conference call for the second quarter and the June 30th, 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. Hello, everyone.
DK
Founder & CEO
Hello everyone, and thank you for joining UCN'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.
Ali Wang
Head of Investor Relations (Host)
I would like to begin with an overview of our operating performance test quarter and then discuss some of the adjustments we have made in response to changing market conditions.
DK
Founder & CEO
2026 has become a year of accelerated consolidation for China's automotive industry
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
The performance of Yuxin Limited in the second quarter is significantly better than that of the industry. Our retail sales reached 19,610 units, which increased by 89% in the same ratio and increased by 19% in the same ratio. Clients highly recommend that NPS continue to maintain the highest level of the industry at 68%. The price fluctuation in the second quarter has caused a gradual impact on our profit. We have also actively accelerated the adjustment of inventory and the release of vehicles. Our retail transaction volume reached 19,610 units, up 89% year-over-year and 19% sequentially. Our net promoter score, or NPS, remained at 68, continuing to rank among the highest in the industry.
Ali Wang
Head of Investor Relations (Host)
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%.
DK
Founder & CEO
Since this year, we have been continuously promoting business digitalization and systematization. Since the beginning of this year, we have also continued to advance the digitalization of our business
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days.
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
Now, we can maintain a high-speed storage cycle of about 20 days and have a good single-car transport level. The sales and operation efficiency of existing stores will continue to climb. New stores include Yinchuan, Guangzhou, Wuxi, Chongqing, Shijiazhuang and Shaoxing are under construction. At the same time, we are also steadily promoting new cooperation with more cities, and continuing to expand the layout of Youxin Warehouse Stores across the country.
Ali Wang
Head of Investor Relations (Host)
Throughout this transition, Yuxin 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're 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, Zhijiazhuang, and Shaoxing are currently under development. At the same time, we are steadily advancing discussions with additional cities on new partnerships as we continue to expand our warehouse-style superstore network nationwide.
DK
Founder & CEO
At the end, I would like to share our business outlook for the third quarter. Our current turnover and profits have returned to a healthy and good level. But we generally judge that the current car market risk still exists and is high. Therefore, we will adopt a cautious business strategy overall, and place the stock turnover, single car profit, and capital efficiency at a more important position. We expect that the sales volume of the third quarter will reach between 20,500 to 21,000 units. will continue to maintain a growth of nearly 50%.
Ali Wang
Head of Investor Relations (Host)
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%.
DK
Founder & CEO
With that, I will turn the call over to our CFO to walk you through the financial results. John, please.
John Lin
CFO
Thank you, DK. Hello, everyone. I will now walk you through our financial performance.
Ali Wang
Head of Investor Relations (Host)
In the second quarter, our retail sales were 19,610 units, with 89% growth and 19% return.
John Lin
CFO
In the case of the overall car market pressure, our warehouse turnover remained at about 30 days, maintaining a business growth that is far above the industry level.
Ali Wang
Head of Investor Relations (Host)
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.
John Lin
CFO
本季度的零售车辆销售收入是10.8亿元,同比增长78%, have increased by 7%. The average price of cars sold, which is ASP, is 5.5 million yuan. Last year, it was 5.9 million yuan. Last quarter, it was 6.1 million yuan. Although the market price dropped, which caused ASP to fall back, the rapid growth of sales is affected by this. The current price range of our cars can basically cover the needs of most mainstream consumers. As the price fluctuates gradually in the car market, We expect that the ASP of vehicles will not decline significantly. The overall will remain relatively stable.
Ali Wang
Head of Investor Relations (Host)
Retail vehicle sales revenue totaled 1.08 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 buying 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.
John Lin
CFO
The sales volume of the second quarter is 2,289 units, with an increase of 88% in the same ratio and an increase of 36% in the same ratio. The sales income is 3,740,000 yuan. The total income of the company in this quarter is 11.51 billion yuan, with an increase of 75% in the same ratio and an increase of 7% in the same ratio.
Ali Wang
Head of Investor Relations (Host)
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.
John Lin
CFO
The price of the second-level car market, especially the quick adjustment of the fuel-fuel price in the short term, has directly affected our inventory. When we actively accelerate, the price is affected by the rise in the number of cars. Therefore, there is a relatively large fluctuation in the turnover rate of this quarter, which is negative 0.7%. In the same period last year, it was 5.2%, and in the previous quarter it was 7%.
Ali Wang
Head of Investor Relations (Host)
During the second quarter, auto prices, particularly prices for new ICE cars, 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 gross 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.
John Lin
CFO
With the basic resale completion of the previous period, the company has also further accelerated the cycle of resale. At present, we have entered a more stable and efficient balance of sales. After entering the third quarter, our single-car profit has clearly recovered. We expect that the overall profit rate of the third quarter will rise to more than 6%.
Ali Wang
Head of Investor Relations (Host)
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.
John Lin
CFO
Turning to expenses, we continue to maintain strict cost discipline.
Ali Wang
Head of Investor Relations (Host)
Despite the continued expansion of our business and superstore network, our sales and marketing expenses remained broadly stable during the quarter. Adjusted EBITDA loss was 120 million RMB, primarily reflecting the temporary impact of the lower growth margin.
John Lin
CFO
关于三季度的业绩展望,我们在谨慎的库存采购策略上提升了周转速度,预计零售销量将在25,000元, Moving to our outlook for the third quarter, we are accelerating inventory turnover while maintaining a prudent inventory procurement strategy
Ali Wang
Head of Investor Relations (Host)
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 gross margin recovers and operating efficiency improves, we expect our profitability to improve further.
John Lin
CFO
Finally, I would like to share with you the progress of our financing. Finally, I would like to provide an update on our financing
Ali Wang
Head of Investor Relations (Host)
We recently received $4 million in investment proceeds from Neo Capital and the closing of the remaining $4 million investment is proceeding as planned. Neo Capital has confirmed that it will proceed with the remaining investment at $2.86 per ADS. Meanwhile, Joy Capital is also actively advancing the overseas direct investment or ODI filing process for its investment in the company.
John Lin
CFO
That concludes our prepared remarks for today. Thank you, everyone. Operator, we're now ready to begin the Q&A session. We will now begin the question and answer session.
Ali Wang
Head of Investor Relations (Host)
We received three questions from investors. The first question is, Youxin has further shortened its inventory turnover from approximately 30 days to around 20 days. Could management discuss how you have been able to achieve such rapid turnover Is this primarily the result of proactively reducing inventory in response to the current market environment, or is this an operating level you expect to maintain over the long term?
John Lin
CFO
OK. Thank you for your question. Let me answer your question. We are now able to convert the storage cycle from the past 30 days to the past 20 days, especially in the past, especially in the third quarter. In the past two months, it has been such a cycle. The first thing behind it is based on the use of AI. Thank you for the question. There are several factors behind our ability to shorten inventory turnover from approximately 30 days to around 20 days.
Ali Wang
Head of Investor Relations (Host)
First, we have been applying AI across our operations. A range of technology capabilities we have developed and upgraded are gradually being deployed across key areas such as pricing, price adjustments, and risk alerts. The accuracy, coverage, and response speed of our pricing capabilities have continued to improve, and we're already seeing a meaningful improvement in inventory turnover efficiency.
John Lin
CFO
The second is the further integration of our full-line road operating system. We have been continuously upgrading our detection, preparation, storage management, CRM, these core systems. Through our series of technical methods to add to the state of the vehicle, market needs and customer needs, to improve the matching and transaction efficiency of the vehicle, Second, we have further integrated our end-to-end operating systems.
Ali Wang
Head of Investor Relations (Host)
We continue to upgrade our core systems across inspection and reconditioning, inventory management and CRM, using technology to improve our assessment of car conditions, market demand, and customer needs. and to increase the efficiency of car matching and transactions. As these different parts of our operations become more closely connected, the overall efficiency from procurement through sales has also improved.
John Lin
CFO
For second-hand car sales, the longer the storage time, the greater the risk of price. Faster cycle can significantly reduce our risk threshold. will reduce the loss caused by the reduction in inventory. Therefore, in terms of the complete economic cycle, high turnover will not only sacrifice single-car profit, but also help to achieve a stable and healthy comprehensive single-car profit. 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
Ali Wang
Head of Investor Relations (Host)
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.
John Lin
CFO
So for us, inventory turnover of around 20 days is not a short-term defensive strategy. It is a core operating target that we intend to maintain over the long term. Thank you. That's my answer.
Ali Wang
Head of Investor Relations (Host)
The second question is, the automotive market experienced a significant adjustment in the second quarter. Could management share what you have been seeing recently in terms of used car market conditions and the competitive landscape? How do you view the industry outlook for the remainder of 2026? 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 over year in July and by 11% in August.
DK
Founder & CEO
On pricing we believe the most severe adjustment occurred in the second quarter
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
At the same time, industry consolidation is continuing
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
For Youxin, this also creates an opportunity to gain market share. We have maintained a relatively prudent approach to inventory procurement in the third quarter.
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
After the fourth quarter, the second-hand car market will usually enter the traditional phase. Our judgment is that the market fluctuation probability will not be as intense as the second quarter. The fourth quarter is typically a peak season for the used car market.
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
That's my answer.
Ali Wang
Head of Investor Relations (Host)
The third question is, the company previously announced a plan for the CEO to personally increase the company's stock. I would like to ask the management to share the current implementation progress. The third question is, the company previously announced a plan by the CEO to purchase additional company shares. Could management provide an update on the execution of this plan?
DK
Founder & CEO
Thank you for the question. I will answer this. In the past few years, we have completed the verification of the warehouse market model and began to expand the layout within the national scope. The company's sales scale, operating efficiency, and core capabilities are also continuing to improve. 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.
Ali Wang
Head of Investor Relations (Host)
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 Yuxin shares in the open market as a tangible demonstration of my confidence in the company's long-term value.
DK
Founder & CEO
According to the previous announcement, the entity under my control has set up a trading plan to enter 10B5-1 in June 30. 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.
Ali Wang
Head of Investor Relations (Host)
at a price of no more than $2.85 per ADS. Following the required 90-day cooling-off period, purchases under the plan will be eligible to begin on September 28.
DK
Founder & CEO
后续具体的买入节奏会按照预先设定的交易计划执行, 并严格遵守入10B5-1及其他相关证券交易规则。 The actual amount that can be purchased on any given day
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
I remain highly confident in the company's long-term development
Ali Wang
Head of Investor Relations (Host)
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.
DK
Founder & CEO
That's my answer. Thank you.
Operator
Moderator
This concludes our question and answer session.
Operator
Conference Operator
I would like to turn the conference back over to Ali Wang for any closing remarks.
Ali Wang
Head of Investor Relations (Host)
Thank you again for joining today's call and for your continued support and using. We look forward to speaking to you again soon.
Operator
Conference Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.