Uxin Ltd. Q2 FY2026 earnings call

• Market Context: The Chinese automotive market is undergoing accelerated consolidation due to new car price declines, particularly for ICE vehicles. Nearly 30,000 brick-and-mortar dealers exited in H1 2026, with 50,000-60,000 expected for the full year.
• Operational Efficiency: Uxin shortened inventory turnover from ~30 days to ~20 days through AI-driven pricing systems and integrated end-to-end operating systems (inspection, reconditioning, CRM).
• Superstore Expansion: Validated warehouse-style superstore model; 6 new stores under development in Yinchuan, Guangzhou, Wuxi, Chongqing, Shijiazhuang, and Shaoxing, with further city partnerships discussed.
• Financial Health: Despite a temporary gross margin dip to -0.7% in Q2 due to price volatility, per-unit profitability has recovered rapidly since Q3 start. Adjusted EBITDA loss was RMB 120 million.
• Strategic Focus: Maintaining leading position by shifting industry from fragmented/non-standardized to scaled/standardized/digitalized models. Emphasis on capital efficiency and rapid inventory turnover as core long-term targets.

• Retail: Revenue of RMB 1.08 billion (up 78% YoY, ~7% sequentially); Volume of 19,610 units (up 89% YoY, 19% sequentially). ASP was RMB 55,000.
• Wholesale: Revenue of RMB 37.4 million; Volume of 2,289 units (up 88% YoY, 36% sequentially).
• Total Revenue: RMB 1.51 billion (up 75% YoY, 7% sequentially). Retail represents approximately 71.5% of total revenue.

• Third Quarter Retail Volume: Expected between 20,500 and 21,000 units, representing ~50% YoY growth.
• Third Quarter Revenue: Expected between RMB 1.16 billion and RMB 1.19 billion.
• Gross Margin: Expected to recover to above 6% in Q3.
• Inventory Strategy: Prudent procurement approach maintained; acceleration of procurement expected as prices stabilize further.

• Market Volatility: Continued pressure from declining new car prices (especially ICE) flowing into the used car market, impacting ASP and gross margins.
• Industry Consolidation: Rapid exit of competitors (50,000-60,000 dealerships expected to exit in 2026) creates uncertainty but also opportunity for market share concentration.
• Price Risk: Longer inventory holding increases exposure to price fluctuations and potential impairment losses.

Q: How did management achieve the reduction in inventory turnover from 30 to 20 days, and is this sustainable? / A: CFO Feng Lin attributed the improvement to AI deployment in pricing/risk control and integration of end-to-end systems (inspection, CRM). He emphasized that faster turnover reduces price risk and impairment losses, supporting stable per-unit profitability. Management views 20-day turnover not as a short-term fix but as a core long-term operating target to unlock leverage.

Q: What are the current market conditions and competitive landscape outlook for late 2026? / A: CEO Dai Kun noted that while new car sales remain weak (down >20% YoY), the sharpest price adjustments occurred in Q2. Used car transactions declined 6-11% YoY in July/August but are stabilizing. With 20% of dealers exiting, market share is concentrating among digital, scaled players like Uxin. Q4 is typically peak season, and management expects less severe volatility than Q2.

Q: What is the status of the CEO's share buyback plan? / A: Dai Kun confirmed he established a Rule 10b5-1 plan to purchase up to $5 million of ADS at no more than $2.85 per share. After a 90-day cooling-off period, purchases begin September 28. The pace will be gradual, compliant with trading rules, and subject to liquidity, demonstrating his confidence in long-term value.