Uxin Ltd. Q4 FY2024 earnings call

• Uxin's used car superstores have strong competitive advantages, with retail sales growing in fiscal year 2024 (10,179 units sold) and a 38% increase in Q4 2024 retail sales. - Superstores are leading brands in regions, NPS around 60 for 10 quarters, market share 10% and growing. - Branding and sales capabilities have a positive flywheel effect, in-store customer conversion rate ~40%, retail vehicle inventory turnover rate improved over 60% y-o-y. - Gross profit margin rose from 1.2% in fiscal 2023 to 5.9% in fiscal 2024, per-vehicle reconditioning cost decreased by 50% y-o-y. - Adjusted EBITDA loss for fiscal 2024 was RMB 176 million, a nearly 40% reduction from fiscal 2023, and expects fixed costs to decrease over RMB 100 million in fiscal 2025.

In fiscal year 2024, Uxin's total retail transaction volume was 10,179 units, with retail revenue reaching RMB 1.02 billion and total revenues RMB 1.38 billion. In the fourth quarter of 2024 (January to March), despite the spring festival slow season, retail sales were 3,124 units, a 38% increase year-over-year, and retail revenue was RMB 269 million. The superstores are leading brands in their regions with a net promoter score (NPS) consistently around 60 points for 10 consecutive quarters, a regional market share of 10% and growing. Overall vehicle inventory turnover days are around 30 days.

• Project fiscal 2025 retail sales to grow 150% y-o-y. - Aim for company-wide adjusted EBITDA profitability in Q4 2024. - Finalize location selection and operation preparations for 2 to 3 new superstores, including a joint investment with Zhengzhou Airport District government for a new superstore.

Q: We noticed that the company recently entered a strategic cooperation with Zhengzhou worth RMB 170 million. Can you elaborate on this cooperation and how long it will take for the new superstore to achieve profitability? Additionally, what is the company's strategy for selecting new cities for expansion? And are there any other cities currently in progress?

A: This is D.K. We signed a contract with the Zhengzhou city government. Local government will provide support, joint investment RMB 170 million, with additional RMB 500 million for site construction. Construction expected to complete next year, new superstore to achieve EBITDA profitability in ~12 months or less. When selecting new cities, prioritize large vehicle ownership, high used car transaction activity, and good traffic conditions. Currently in negotiations with multiple cities, expect to finalize cooperation with 1 to 2 cities this year.

Q: How is our used car -- used new energy vehicle business developing and what percentage of Uxin's inventory do they make up? Compared to fuel-powered used cars, are there major differences in profitability and cost when selling used new energy vehicles?

A: This is D.K. NEV sales growth in China is impressive. Currently, NEV proportion in Uxin's inventory is 10%-15%. Profitability of used NEVs is slightly higher than fuel-powered cars due to higher sales turnover rate, better condition, and lower reconditioning costs. Operational system supports NEV acquisition, reconditioning, sales, and after-sales, with databases and collaborations in place. Proportion of NEVs in retail business is expected to increase.