Operator
Ladies and gentlemen, thank you for standing by, and welcome to Ushin's Earnings Conference Call for the quarter-ended March 31, 2026. 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. I would now like to turn the call over to your host for today's conference call, Ms. Allie Wong. Please go ahead, Allie.
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 growth 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. 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 solves 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 declining vehicle prices have created short-term pressure on profitability, China's used car market still achieves a modest 2% increase in transaction volumes 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. From a longer time period of time, 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. 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 used car 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 builds 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 position 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 sales. 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 18,000 units, continuing our strong growth trajectory.
At the same time, we reaffirm our target of achieving more than 100% year-over-year growth in retail transaction volume for the full year of 2026. 我今天的分享先到这里。 接下来我们的CFO John 会为大家展示财务上的情况。 John, please. With that, I'll turn the call over to our CFO to walk you through the financial results. John, please.
OK,感谢DK,大家好。 接下来由我来和大家分享公司的业绩情况 一季度受春节假期的影响是二手车销售的传统的淡季 但我们本季度的业务表现依然强劲 零售销量是16530台同比增长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 for stores gradually commence the operation.
We expect our retail transaction volume to maintain a strong growth trajectory over the coming quarters.
The question is, Dr. King Wen.
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. 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 总体上看,新卖场的毛利水平会较老卖场会自然的低一些 老卖场的销量占比较大,抵消了这一影响,使我们的毛利率保持稳定
Superstores naturally operate at lower growth margin levels than our more mature locations. However, the larger sales contribution from our mature Superstores offset this impact
and help maintain a stable overall growth margin. 本季度经调整后的以贝大亏损是3430万人民币, 上季度是2721万人民币,环比增加主要是由于春节的季节性影响, 销量下降导致。 The 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 superstores 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.
Operator
Thank you. To ask a question, please press star than one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star than 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. And today's first question comes from Ben Wong with Deutsche Bank. Please go ahead.
My question is about the second quarter. So why suddenly in the second quarter, the new car price starts to decline, and the new car starts to decline as well, while the second quarter is not the first quarter? and secondly, because you mentioned the pressure in the second quarter was roughly cost margin change in the second quarter we had that, thank you Okay
From EGDU的 你好,我是John 我来回答这个问题 整个中国我们会看到 从 EGDU的1到3月份 整体的二手车的销量 其实是符合我们之前的一个预期的 整体的销量 我们也会看到新车端也可以看到 从4月份到开始 它的4月份和5月份 它的单月的整体的燃油车的下降 同比下降都会超过了35% 连续两个月 所以这也是从4月份我们来开始 这个燃油车下降更为显著 所以二手车也是在进入四月份之后 才出现了较大幅度的这个价格的调整 那主流二手车其实在这几个月下降 下行了基本上10%到15%的这个空间 在这个阶段 所以是我们就会在二季度 看到这个比较明显的下降趋势 Hi, this is Strong.
I'll take your question. The overall vehicle sales volume in China from January to March is in line with our expectation. And since starting from April to May, ICE vehicles saw a 35% drop in sales volume. And 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 新车市场的价格 其实调整的很快 燃油车 所以对我们二手车行业 整体的毛利水平 其实都会带来很大的影响 所以在这样剧烈的行情变化下 我们的经营也会变得谨慎 更加谨慎 追求健康的周转效率 健康的周转 三次周转会优先于短期的毛利 因此二次的毛利会受比较大的压力 新车市场的价格其实调整的很快 燃油车 所以对我们二手车行业整体的毛利水平 其实都会带来很大的影响 所以在这样剧烈的行情变化下 我们的经营也会变得谨慎 更加谨慎 追求健康的周转效率 那健康的周转 三次周转会优先于短期的毛利 因此二次的毛利会受比较大的压力 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-term gross margin optimization, and as a result growth margin will face greater pressure in the second quarter
那燃油车的价格 如果在当前的价格基础上 仍继续的大幅下探 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 那前期受价格波动 影响较大的库存车辆 现在也在逐渐的出轻 那燃油车的价格 如果在当前的价格基础上 仍继续的大幅下探 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 那前期受价格波动 影响较大的库存车辆 现在也在逐渐的出轻 那我们预计在 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 我们会有毛利 会有一个非常大的压力 If ICE vehicle prices continue to decline significantly from current levels our growth margin will remain under pressure However, based on what we have seen since early June new car prices have generally stabilized Given our fast inventory turnover inventory affected by earlier price volatility is being gradually clear. As a result, we expect gross margin to improve meaningfully in the third quarter and potentially return to normal levels.
That's my answer to your question.
Operator
Thank you. And our next question today comes from Wengi Dai with SWS Research. Please go ahead.
Okay, thank you,管理层. 那我们看到就是公司今年开始持续的开店 其实速度都是在加快的 那能否请管理层分享一下 那目前的新开店和我们一年多前的西安店 在相同的这个时间节点下的 比如说销量的爬坡速度啊 收入啊 盈利能力啊 等多方面的一些重要的经营指标上面 有没有一些比较好的看到这个改善 就是优化的这个迹象 对 主要想问一下这个 okay as we can see the company has been accelerating its story especially this year because of the management rate on how the operating performance of newly opened the superstars compares with that of the Xi'an superstars when it first opened its specific study such as the sales rampart revenue growth and and profitability evolved as the superstars module as measured. Thank you.
Well, that's what I'll answer your question. The Cyan market was our first-time market. It was in the 12th of January of 2020. We needed to look at the entire market market. 采购,定价,整备,库存,销售,售后等一系列的这个运营体系 那目前呢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% 也在当地实现了单卖场的盈利 Thank you for the question.
This is John. I'll take your question. Xi'an 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 Xi'an 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 那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 那能够在矫短的时间内实现这样的销量的跨坡 说明我们的模式在新城市的复制能力是越发的成熟 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 Zhongzhou Superstore opened in September 2025, and its monthly retail transaction volume surpassed 1,000 units in about four months. Zhongzhou is particularly encouraging because it's both a highly competitive and highly active used car market.
Achieving that level of sales growth within such a short period demonstrates that our model is becoming increasingly scalable and replicable across different cities. 那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 第三个就是随着整个优信的品牌的影响力的逐年的提升 那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啊评估能力也更强 所以呢结合当前的这个地产的周期我们可以拿到更好的这个卖场的位置 This improvement is driven by several factors.
First, our procurement, pricing, and inventory management systems 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, New super stores are able to attract customers and build trust much faster than in the early days In addition, our site selection and project evaluation capabilities have improved significantly We're also benefiting from the current real estate market environment Which helps us secure better locations for new super stores From the income point of view, the price increase will immediately increase the income point of view From a revenue perspective, faster sales ramp up naturally drives faster revenue growth. From a profitability perspective, new superstores still require upfront investments in facilities and staffing, so profitability typically lacks sales growth. However, as sales volume scales up, inventory turnover stabilizes, growth margin increases, and operating efficiency improves, new superstores will gradually move closer to the performance levels of mature locations.
所以总体来看 西安证明了 我们的单点模型是可以跑通 并实现盈利的 武汉和郑州证明 这个模型的复制 我们模型的复制 效率正在提升 随着未来更多的新店的开业 我们会继续的综合的 来考量销售爬坡的速度 毛利率 以及库存周转和单点盈利的表现 来确保扩张是高质量的
can achieve profitability, while the Wuhan and Zhengzhou superstores demonstrate that the model is becoming increasingly efficient to replicate across new markets. As we continue opening new superstores, we will closely monitor sales ramp up, growth margin, inventory turnover, and store level EBITDA to ensure that our expansion remains high quality and sustainable. 谢谢 这是我对你的问题的回答 Thank you, that's my answer 谢谢,谢谢, thank you Thank you And our next question comes from Xingxun Lin I'm sorry, Xingxun Li with CMS Please go ahead 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市的行情没有回暖 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. Could you provide more color on your store opening plans for this year? Also, if market conditions do not improve, would the company consider slowing down the pace of new store opening?
Thank you for your questions.
This is DK. I will take your questions. Regarding our expansion plan, We expect to open four to six 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 关于车市行情的影响 我们确实看到今年以来 新车和二手车价格都有一定的波动 短期对行业会带来压力 但从另一个角度看 行业调整会加速出清 对具备高周转效率 强定价能力 标准化整备和品牌服务的企业 反而是提升市场份额的机会 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 and disciplined 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. 各种每个项目的推进节奏,确保扩张是高质量可持续的。谢谢。 At this point, our plan to open four to six new superstores 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.
Operator
Thank you, and our next question today comes from Zal George with TF Securities.
Please go ahead. 感谢管理层我这边想问的问题是我们今年看到这个今年以来新车市场里的燃油车和新能源车的表现分化也是比较明显 所以说想请教一下在二手车销售中是否有看到这一趋势 We have seen a growing divergence between the performance of the S vehicles and NVS in the new car segment this year Are you seeing a similar trend in used car sales?
Thank you for your questions. This is DK. I'll take your questions. 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, NEV retail penetration exceeded 60%. The use 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. What really drives the used car market is pricing. Unlike the new car market, used cars can continuously adjust their prices to restore their value proposition for consumers. In our view, the current market correction is actually a very important sign that China's auto market is becoming more mature. Used cars' prices have fallen sharply during this cycle, 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.
That's the price adjustment. After the price adjustment, the price adjustment will start to come in. The most important number of the purchase demand will be from the two-wheel drive. The situation of the two-wheel drive market will continue to move forward to the乘車 market.
Globally, for used cars to fully demonstrate their value-for-money advantage, residual values need to return to more reasonable levels. Once this pricing adjustment is completed, We expect not only more trade-ins for new vehicles, but also a growing number of use-for-use replacement purchases. Most vehicle purchases driven by practical needs will be satisfied by used cars, 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.
Operator
Thank you. And that concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks.
Thank you again for joining today's call and for your continued support in Houston. We look forward to speaking to you again soon in the future.
Operator
Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
