Good day, and welcome to the Uxin Quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jack Wang. Please go ahead. Thank you, Operator. Hello everyone. Welcome to Uxin's earnings conference call for the third quarter ended September 30, 2024. On the call today with me, 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 will turn the call over to our CEO, DK. Please go ahead, sir. [Foreign language] Hello everyone. Thank you for joining us today. I'm pleased to reconnect with you all on this call. Before we start, as before, we will be sharing our company's latest progress in both English and Chinese to accommodate our domestic and international investors. [Foreign language] We're excited to report another quarter of high-quality growth. From July to September 2024, our quarterly retail transaction volume reached 6,005 units, representing a sequential increase of 47% and a year-over-year growth of 163%. Our vehicle sales efficiency remains robust, with inventory turnover days maintained below 30 days, much lower than the Chinese industry average of 55- 60 days. Our gross profit margin also expanded to 7%, marking a new high since we transitioned to our self-operated business. We anticipate that retail transaction volume in the next quarter will be 7,800 units to 8,100 units, representing a year-over-year increase of over 150%. [Foreign language] Customer satisfaction with purchasing vehicles from Uxin has remained at the highest level in the industry for 11 consecutive quarters, with our Net Promoter Score rising to 66 this quarter. By leveraging advanced intelligent reconditioning factories to produce high-quality used cars, a comprehensive and reliable sales service system, and the application of full-spec digital technology, our superstore model offers significant advantages over traditional car dealerships. The sales conversion rate of customers visiting our stores exceeds 40%. As our base of transacting customers continues to grow, our positive reputation is reaching potential customers more rapidly, further consolidating our competitive advantage in regional markets. [Foreign language] Importantly, used car transactions have traditionally been considered non-standard processes. However, our efforts and achievements in standardizing the entire transaction process, from inspection and reconditioning to sales, delivery, and after-sales services, have been increasingly recognized by the industry. Earlier this month, we were honored to be named a corporate standard leader in China's used car industry by eight government ministries, including the State Administration for Market Regulation, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, and the People's Bank of China. We will continue to elevate our product and service standards, leading the high-quality development of China's used car industry. [Foreign language] We are also actively executing various business initiatives. First, we are steadily increasing our inventory levels to meet the strong consumer demand for our purchases. At the same time, by leveraging the one-stop transaction service environment of our offline superstores, we are enhancing the penetration of value-added services to contribute more to our gross profit. Second, we are gradually supplementing and optimizing our superstore staffing to accommodate the demands of our expanding business scale. Additionally, as our existing customer base grows, we're further improving our service network by deploying additional maintenance service outlets in other areas of the cities where our superstores are located. This allows us to be physically closer to our customers, meeting their daily vehicle maintenance and servicing needs. [Foreign language] Driven by continuous sales growth, ongoing improvements in gross profit margins, and consistent expense optimization, we have achieved Adjusted EBITDA profitability at the superstore level this quarter. We remain on track to achieve our goal of company-wide Adjusted EBITDA profitability in the upcoming December quarter. [Foreign language] Building on our proven superstore model, the expansion of our new superstores is progressing smoothly. Following our cooperation agreement with the Zhengzhou Airport Economic Zone, we're pleased to announce that we have entered into another cooperation agreement with the city of Wuhan. Wuhan is a major city in central China with a population of 14 million and a vehicle ownership of 4 million. Additionally, Wuhan has a well-developed automotive industry value chain that is known as China's Auto Valley, offering massive potential for business development. Our superstores in Zhengzhou and Wuhan are expected to commence operations next year. Furthermore, we are in discussions with several other cities. The expansion of new superstores will significantly enhance Uxin's market presence in new regions, driving future sales growth and financial performance. [Foreign language] That concludes my remarks for today. Now I will let our CFO John to provide a closer look at our financials. John, please go ahead. [Foreign language] Thank you, DK. Hello everyone. We will deliver our remarks in both Chinese and English to communicate better with you. And first, I would like to note that to better align with the common practice in the investment community, we have adjusted our fiscal year this quarter. Our fiscal year now runs from January 1st to December 31st each year, instead of the previous period from April 1st to March 21st. [Foreign language] For the period from July to September 2024, which is now the third quarter of fiscal year 2024, we once again delivered very strong growth. Transaction volume increased significantly on top of last quarter's record high. Quarterly retail transaction volume reached 6,005 units, representing a sequential growth of 47% and a substantial year-over-year growth of 163%. [Foreign language] This quarter, total retail vehicle sales revenue was RMB 440 million, representing a sequential increase of 37% and a year-over-year increase of 79%. The average selling price of retail vehicles decreased from RMB 109,000 in the same period last year to RMB 74,000 this quarter. The strong increase in transaction volume had offset the impact of lower vehicle prices on overall revenue. [Foreign language] As for the wholesale segment, our third quarter wholesale transaction volume was 1,041 units, a sequential decrease of 31% and a year-over-year decrease of 35%, with total wholesale vehicle sales revenue of 37.8 million RMB. Combining retail and wholesale, total revenues for the third quarter were 497 million RMB, representing a sequential increase of 24% and a year-over-year increase of 40%. [Foreign language]本季度的毛利率是7%，较上个季度有一定幅度的上涨。我们的毛利率处在向上爬升的过程中，随着市场行情的回暖和增值服务渗透率的持续提升，预期毛利率还会有较大的增长空间。 This quarter, our gross profit margin was 7%, an improvement from the previous quarter. Importantly, our gross margin is on an upward trend. With the market recovering and higher penetration of value-added services, we anticipate significant room for further improvement. 我们在业绩表现和运营效率大幅提升的同时，也在持续地贯彻更加严格的成本和费用管控。本季度经调整后的EBITDA亏损为920万元人民币，比上个季度大幅减亏73%，同比减亏80%。 While our performance and operational efficiency have improved substantially, we continue to enforce strict cost and expense control. This quarter, our Adjusted EBITDA loss was 9.2 million RMB, a reduction of 73% quarter over quarter and 80% reduction year-over-year. 关于2024财年四季度的业绩展望，我们的零售销量预计继续保持增长的趋势，为7,800台到8,100台。总销售收入预计在5.6亿人民币到5.8亿人民币。我们计划在四季度实现公司的单季度 Adjusted EBITDA转正。 Looking ahead to the fourth quarter of 2024, our retail transaction volume is expected to continue its growth trend, reaching 7,800 units to 8,100 units, with total revenues projected to be between RMB 560 million and RMB 580 million. We also plan to achieve positive Adjusted EBITDA for the company in the fourth quarter. 以上就是我们今天准备和大家分享的内容，谢谢各位。主持人，我们可以开始问答环节，谢谢。 That concludes our prepared remarks for today. Thank you, everyone. Operator, we're now ready to begin the Q&A session. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Once again, to ask a question, please press star, then one. The first question today comes from Gary Dvorchak with Water Tower Research. Please go ahead. Hey, everyone. So we've seen that in previous years, China's used car transaction volumes grew by double digits annually. But now in recent months, the growth rate has significantly slowed. I think the year-over-year growth is like around 5% from January through September. So could you share whether the development of China's used car market is slowing down or not, the reasons behind the trend and your outlook for the market's future? All right, thanks, Gary. Let me translate that question first. 他的问题是，我们看到前几年中国二手车的交易量每年都是两位数的增长，但是最近几个月观察到增速是有明显放缓。1到9月，中国二手车交易量同比增速是5%左右。所以想问一下管理层对于中国二手车市场发展是否放缓，以及原因是什么，和咱们对市场未来的展望是什么样。请DK回答一下。 好，谢谢我来回答。确实今年其实不论是二手车还是新车，交易量的同比增速都有所放缓。新车的产销量同比增速应该是百二，二手车大概是百五。主要的原因还是经济环境有些波动，汽车的消费需求受到了一定的抑制。同时二手车市场还有一个逆风因素，就是今年上半年新车的降价潮，也整个影响了二手车的消费情绪。 Okay, thanks for the question. Yeah, thanks for the questions. This is DK, and this year we have observed a moderation in the growth rate for both new and used car transactions in China, and specifically, the production and sales of new cars have increased by approximately 2% year-over-year, while used car transactions have grown by about 5%. The primary factors contributing to the slowdown include fluctuations in the economic environment, which have somewhat suppressed consumer demand for cars, and additionally, the used car market faced headwinds due to price reductions in new cars during the first half of the year, which impacted consumer sentiment towards purchasing used vehicles. 但长期来看，我们对二手车市场的发展还是很有信心的。一方面是中国的人均汽车保有量还不到美国的三分之一，总体汽车保有量还在增加。另一方面就是中国二手车市场仍处在发展的早期阶段，预期未来几年还将保持两位数的高交易量的增长。就今年来看，下半年开始二手车市场的交易数据也已经开始回暖了。 However, despite these short-term challenges, we remain highly confident in the long-term prospects of China's used car market. First, China's per capita car ownership is still less than one-third of that of the United States, and the overall car ownership in the country continues to rise, and second, the Chinese used car market is still in a very early stage of development. We expect it will maintain double-digit transaction volume growth in the coming years. In fact, since the second half of this year, we've already begun to see a rebound in used car transaction volumes. 对于优先来讲，我们这几个季度的零售销量的同比增速在150%左右。虽然我们在两个运营卖场所在的城市占有率已经超过了15%，但由于我们目前选择基于线下卖场深耕所在城市，我们全国范围内的市占率还很低，意味着我们还有广阔的成长空间。未来几年，我们每年都会有若干个新卖场投入运营，带动我们销量持续的增长，销量增速一定会远远大于大盘的增速。 So for us, we've achieved around 150% year-over-year growth in retail transaction volume over the past few quarters. While our market share in the two cities where our current superstores are located has exceeded 15%, our nationwide market share remains relatively low because we're currently focusing on deepening our presence through our offline superstore model in these cities. And this indicates significant headroom for growth. In the coming years, we plan to open several new superstores every year, which will drive sustained growth in our sales volume. And we believe that our sales growth rate will significantly outpace that of the overall market. And that's our answer to the question, Operator. We can move on to the next. Okay, thank you. The next question comes from Fei Dai with TF Securities. Please go ahead. Hello, DK. 我很高兴看到公司开始进行新卖场的扩张，想问一下正在进行中的郑州和武汉两个新卖场，从建设到营业到实现单点盈利的时间线大概是什么样的？对2025年的财务业绩表现会有什么影响？ It's encouraging to see the company expanding with new stores. Could you provide the timeline for the two new stores planned in Zhengzhou and Wuhan, from construction to operating to achieving individual stores' profitability? Also, what impact will this have on the company's financial performance in 2025? Thank you. Okay, 我们现在就来回答。 好的。那我们现在的两个新卖场都在按计划的筹备进行中。武汉卖场预计在明年的上半年，也就是2025年的上半年开业。郑州卖场预计在明年的下半年开业，2025年的下半年。那经过我们现在在西安和合肥两个卖场的运营和打磨准备，我们的超级大卖场的模式已经完全跑通了。那我们积累了非常丰富的卖场的运营经验。所以我们预计是新卖场在开业后6到12个月就可以实现盈亏平衡。 Hi, this is Zhang, and I will address your questions. Both of our new stores are progressing as planned. The Wuhan store is expected to open in the first half of 2025, while the Zhengzhou store is anticipated to open in the second half of 2025. And now, building on the experience and refinement from our superstore models in Xi'an and Hefei, we've already fully validated this concept and accumulated valuable operational know-how. So as a result, we expect these new stores to reach break-even within six-12 months after opening. 关于对于财务报表的影响，这个取决于我们开仓开始运营的节奏。新仓的开业需要先投入一部分的运营资金，主要用在整备工厂的设备的采购以及车款的投入中。这部分的资金会随着库存规模的增长逐步地给予投入，所以开仓所需要的资金不会太多。新仓开业之后，大概六个月以内会有些正常的运营亏损，六个月开始就会对利润表的影响就开始逐渐地转正。 Regarding the impact on our financial performance, this will largely depend on the rollout schedule of the new locations. Prior to opening, we will need to invest operating capital primarily for purchasing equipment for reconditioning facilities and acquiring vehicles. This investment will be phased in gradually as our inventory levels grow. So the initial capital requirement for each new store won't be substantial. We also anticipate a normal level of operating losses during the first six months after store opens, but starting around the sixth month, we expect the impact on our income statement to begin turning positive. Okay, 这个是我对这个问题的回答。谢谢，大飞。 So that's our answer to your first question. Over the past few quarters, the company has consistently mentioned increasing inventory, with inventory assets growing by about 30% each quarter. I have two questions. The first is, from a market demand perspective, how do you plan the upper limit of inventory levels in different cities? The second is, will the 30-day turnover rate decrease as inventory increases, and how does the company plan to balance inventory levels and turnover? Thank you. Hello，大飞，我来回答。我们对不同城市卖场的库存规模的规划与该城市汽车保有量水平和我们的目标市占率相关。随着二手车行业的发展，每50万台汽车保有量城市按照新车七年左右进入二手车市场预计，每年二手车交易量大概在7万台左右，一个月大概在6000台左右。 This is DK, and I will address that question. Our approach to planning inventory levels in different cities is closely tied to the local car ownership levels and our targeted market share in those regions. For example, in a city with approximately 500,000 registered vehicles, and considering that new cars typically enter the used car market after about seven years, the annual used car transaction volume in this city will be around 70,000 units. This translates to approximately 4,000 units per month. 目前我们在西安和合肥两个城市的市占率已经达到了15%以上，最终的市占率目标是20%以上。从这个角度上看，我们对比美国领先的二手车企业，在美国市场只能达到百三的市场占有率，有得天独厚的优势。因此每50万台汽车保有量的城市，月二手车交易量大概6000台，我们占20%，就可以支持我们开设一个1000台规模的卖场。那像武汉、郑州这样汽车保有量在500万台左右的城市，可以支持我们开设1万台规模的卖场。 In our existing markets like Xi'an and Hefei, we have achieved a market share exceeding 15%, with an ultimate goal of surpassing 20%. To put this into perspective, and also to highlight our competitive advantage and effective business model, the leading used car companies in the U.S. generally attain around a 3% market share only. So based on these metrics, in cities with 500,000 vehicles, capturing 20% of the monthly used car transactions, which would be around 1,200 units, supports the operation of a superstore with an inventory capacity of approximately 1,000 cars. In larger cities such as Zhengzhou and Wuhan, where car ownership is around five million, our superstores can effectively manage inventory capacities of around 10,000 cars. 我们每新进入一个城市，都会根据该城市的汽车保有量水平先做好库存的规划，然后根据销量的爬升不断地拉升库存，提升占有率。 So when entering a new city, we first establish an inventory plan that aligns with the city's car ownership levels and our market share objectives. We then progressively scale our inventory in line with sales growth, which helps us enhance market penetration while efficiently managing resources. 今年3月份以来，我们一直在稳步提升库存。9月底的库存水平是3月底的两倍，月销量则是两倍以上。销量增长反而还快于库存的提升，库存周转率一直在加快。这一方面是由于市场行情的回升需求旺盛，另一方面是伴随着规模的不断扩大，消费者选择越来越多，对于我们大卖场购车的倾向愈加明显，形成了目的地效应和流量的中立场。品牌的吸引力是在提升的，越来越多的顾客慕名而来。我们当前两个卖场的库存还未达到规划上限，还会保持30天左右的库存周转速度。 Since March of this year, we have been steadily increasing our inventory levels. By the end of September, our inventory was approximately double that of March end levels. Notably, our monthly sales have more than doubled during the same period, meaning sales growth has outpaced inventory growth. So we've actually achieved an acceleration in inventory turnover rather than a decrease. This is due to several factors. First, the market has been recovering, with strong demand driving higher sales volumes, and second, as we expand our scale, consumers benefit from a wider selection of vehicles available in our superstores. The increased variety enhances our brand attractiveness, effectively making our stores the preferred destinations for used car purchases. As a result, more customers are drawn to our brand, improving sales efficiency. Currently, the inventory levels at our two existing superstores have not yet reached their planned limits. We aim to maintain an inventory turnover rate of around 30 days, even as we continue to increase inventory. That's our answer to your second question. 好的。谢谢，大飞。 谢谢。 This concludes our question and answer session. I would like to turn the conference back over to the company for any closing remarks. All right. Thank you again for joining today's call and for your continued support in Uxin. We look forward to speaking with you next quarter. Thank you. 谢谢，再见。 Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.