Uxin Ltd (UXIN) Q2 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to Yushin Earnings Conference Call for the quarter ended June 30, 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. Allie Wang. Please go ahead, Allie.

Thank you, Operator. Hello, everyone. Welcome to Yushin'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 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 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 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.

Our sales are at 19,610台, with the increase in 89%, and the increase in 19%. The customers'推薦 NPS will continue to maintain the market at 68% of the industry. The second phase of the price increase will also make the marketer-related change. We also have to increase the maintenance and maintenance. After the third phase of the third phase, our sales sales will be quick and will be back to the next phase. The third phase of the sales sales will be back to the next phase.

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 NPS, remained at 68, continuing to rank among the highest in the industry. Price volatility during the second quarter had a temporary impact on our gross 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 and 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 that the year of the year in the 20th century will become the challenge of the two-way car industry.

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. Thank you very much. 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 healthier 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're steadily advancing discussions with additional cities on new partnerships as we continue to expand our warehouse-style superstores' network nationwide.

Let's take a look at our three-year-old-old-old-old-old-old-old-old-old.

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, D.K. 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. 上季度是6.1万元,虽然市场价格下降导致了ASP有所回落,但销量的快速增长抵消了这影响,我们目前的车辆的价格带可以基本覆盖绝大部分主流消费者的购车需求,随着汽车市场价格波动逐步的缓和,我们预计车辆的ASP不会再出现大幅的下滑,整体将保持在相对稳定的水平。

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. 批售收入是3740万元 那综合零售批售和其他业务 本季度公司的总收入是11.51亿元 同比增长75% 环比增长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. 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 growth 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. 更加稳健高效的采销平衡.

That's it for the three months. After the three months, our single car sales will be clear. We expect the three months of the total profit rate will be up to 6% more than 6%. to recover to above 6% in the third quarter.

Turning to expenses, we continue to maintain strict cost of a plan. Despite the continued expansion of our business and superstore network, our sales and marketing expenses remain broadly stable during the quarter.

Adjusted EBITDA loss was 120 million RMB, primarily reflecting the temporary impact of the lower growth margin. 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20500台到21000台之间,总的销售收入将在11.6亿元到11.9亿元人民币之间,整体的毛利率回升至6%以上。 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 gross margin recovers and operating efficiency improves, we expect our profitability to improve further. 最后跟大家同步一下我们融资的进展。 我们近期又收到来自蔚来资本的400万美元的投资款。 未来资本剩余400万美金投资的交割也在按计划的推进 并且未来资本已经确认将继续按照2.86美元每ADS的价格完成交割 与此同时 逾越资本也在积极推进其对公司投资的ODI的备案 Finally, I would like to provide an update on our financing.

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. That concludes our prepared remarks for today. Thank you everyone. Operator, we are now ready to begin the Q&A session. We will now begin the question and answer session. 我们收到了三个来自投资人的问题 第一个问题是公司目前库存周转已经从过去约30天进一步缩短到20天左右 想请问下这样的高周转是如何实现的 这是特殊市场环境下主动降低库存的结果 还是未来希望长期维持的经营水平 We received three questions from investors. The first question is, Yuxin 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?

Okay, that Thank you for your question I will answer your question We can now We can go through the 30 days From the 30 days From the 20 days Especially in the 3rd year This is a way of this The表現 First of all is AI of the use We developed a series of技術 We can't use Thank you for the question.

There are several factors behind our ability to shorten inventory turnover from approximately 30 days to around 20 days. 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. 第二是我们的这个全链路的运营系统进一步的高度的集成,我们一直在持续的升级我们的检测整备,库存管理CRM这些核心的系统,那通过我们一系列的技术手段加向对车辆状态,市场需求和客户需求的判断来提高车辆的匹配和交易的效率,那随着各个环节,我们的业务环节连接的更加紧密。 车辆从采购到销售的整体效率 自然会进一步的提升

of our operations become more closely connected. The overall efficiency from procurement through sales has also improved. 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.

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. The second question is, the automotive market experience 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?

This pressure also leads to the market market market. In the 7th of August, the exchange rate has decreased 6%, and the 8th of August has decreased 11%.

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. On pricing, 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. 好,以上是我的回答。 That's my answer. 第三个问题是,此前公司公告的CEO个人增持公司股票的计划, 想请管理层分享一下目前的执行进展。 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? 好,谢谢提问,这个我来回答。 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. 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, purchases under the plan will be eligible to begin on September 28.

The purchase of the purchase plan will be used by the purchase plan and will be formally approved in 10B5-1.

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. 我个人对公司的长期发展保持非常坚定的信心 也希望通过这次增持让我的个人利益与公司所有股东的长期利益更加紧密地绑定在一起 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 好,以上是我的回答,谢谢 That's my answer.

Thank you. This concludes our question and answer session.

I would like to turn the conference back over to Ali Wang for any closing remarks.

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

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.