Uxin(UXIN) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2022, total revenues reached RMB278 million, a 42% increase quarter-over-quarter and a 348% increase year-over-year [16] - Transaction volume was 3,011 units, up from 1,719 units in the previous quarter and down from 3,887 units in the same period last year [15] - Non-GAAP adjusted loss from continuing operations decreased to RMB45 million from RMB98 million in the previous quarter and RMB133 million in the same period last year [17] Business Line Data and Key Metrics Changes - Retail volume was 679 units, while wholesale volume was 2,332 units, indicating a shift towards wholesale sales due to capital constraints [15][16] - Gross margin was 4%, slightly down from 4.6% in the previous quarter but improved from a negative 28.4% in the same period last year [16] Market Data and Key Metrics Changes - The company noted that the shortage of auto chips has a short-term positive impact on the used car market, as delays in new car deliveries may lead consumers to opt for used cars instead [21] - The market for used cars in China is growing, with increasing consumer acceptance and favorable industry policies [22] Company Strategy and Development Direction - The company aims to enhance vehicle sourcing, reconditioning capacity, and offline showroom expansion to improve customer experience and sales conversion [9][10] - A strategic partnership with the Changfeng County Government aims to build a used car inspection and reconditioning plant with an investment of RMB2.5 billion, expected to produce 60,000 to 100,000 vehicles annually [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering business momentum following the first tranche of new investment received in July, which has improved cash position and operational capacity [12][13] - The company expects total revenues for Q2 2022 to be in the range of RMB310 million to RMB330 million, reflecting positive operational conditions [18] Other Important Information - The company celebrated its 10th anniversary, emphasizing its commitment to providing high-quality used vehicles and services [11] - The operational model of the Xi'an IRC has matured and is ready for replication in new regions, with plans to expand into Hefei [26] Q&A Session Summary Question: Impact of auto chip shortage on used car sales - Management indicated that the chip shortage has a boosting effect on the used car industry as delays in new car deliveries may lead consumers to purchase used cars instead [21] Question: Long-term impact of EV sales on the used car industry - Management acknowledged the rapid increase in EV sales and stated that they are preparing to offer services for used EVs, indicating a proactive approach to market changes [23] Question: Future strategic focus and sales growth drivers - Management highlighted that with improved capital, they are focusing on enhancing procurement and production capacity, which will naturally lead to increased sales conversions [25]