Uxin Limited (UXIN) Tops Q3 EPS by 10c

Uxin Limited (NASDAQ: UXIN) reported Q3 EPS of ($0.04), $0.10 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $65.24 million versus the consensus estimate of $134.94 million.

Third Quarter 2019 Operational Highlights

• 2C Transaction volume increased to 23,566 units in the third quarter of 2019, representing a year-over-year growth of 107.3%.
• 2B Transaction volume decreased to 30,658 units in the third quarter of 2019, representing a year-over-year decline of 66.6%, as a result of the Company’s continuing shift of strategic focus towards its 2C business.
• 2C GMV1 increased to RMB2,828 million in the third quarter of 2019, representing a year-over-year growth of 110.0%.
• 2B GMV decreased to RMB1,537 million in the third quarter of 2019, representing a year-over-year decline of 64.1%.

Third Quarter 2019 Financial Highlights

• Total revenues were RMB461.4 million (US$65.2 million) in the third quarter of 2019, representing a year-over-year growth of 33.4%.
  • 2C Revenue was RMB327.5 million (US$46.3 million) in the third quarter of 2019, representing a year-over-year growth of 246.9%.
  • 2B Revenue was RMB71.7 million (US$10.1 million) in the third quarter of 2019, representing a year-over-year decline of 62.5%.
• Gross profit was RMB254.8 million (US$36.0 million) in the third quarter of 2019, representing a year-over-year growth of 60.8%. Gross margin increased to 55.2% in the third quarter of 2019, compared to 45.8% in the same period last year.
• Loss from continuing operations was RMB253.1 million (US$35.8 million) in the third quarter of 2019, a decrease from RMB489.8 million in the same period last year.
• Non-GAAP adjusted loss from continuing operations was RMB254.3 million (US$36.0 million) in the third quarter of 2019, a decrease from RMB418.1 million in the same period last year.
• Net loss from continuing operations was RMB267.2 million (US$37.8 million) in the third quarter of 2019, a decrease from RMB516.9 million in the same period last year.
• Non-GAAP adjusted net loss from continuing operations was RMB268.4 million (US$37.9 million) in the third quarter of 2019, a decrease from RMB445.2 million in the same period last year. Non-GAAP adjusted net loss from continuing operations as a percentage of total revenues was 58.2% in the third quarter of 2019, a decrease from 128.7% in the same period last year.

Mr. Kun Dai, Founder, Chairman and Chief Executive Officer of Uxin, said, “We are pleased to deliver a solid set of results for the third quarter with our total 2C revenue significantly increasing by 247% and non-GAAP adjusted net loss from continuing operations notably narrowing by 40% year-over-year. While transaction volume was relatively flat compared to the second quarter due to a short-term impact from the early adoption of new emission standard China Six in some cities, we recorded over 23,500 online used car transactions in the third quarter, achieving a 107% year-over-year increase. Moreover, our unique value propositions powered by our online products and services and our strong monetization ability enabled us to further increase the total 2C take rate from 11.2% in the second quarter to 11.6% in the third quarter, equivalent to per-unit revenue of approximately RMB14,000. Given that the used car sector typically shows resilience when it gradually digests the impact from policy changes as more used car inventory meeting the new emission standard becomes increasingly available on the market, we are confident that we will continue our strong growth trajectory for online transaction volume in the coming year-end peak season.”

Mr. Dai added, “As China’s leading online used car dealer, through our online virtual inventory system connecting over 20,000 used car suppliers across China, we are able to provide consumers with a wider selection of used cars and better prices by directly matching the diversified used car demand and nationwide supply in a highly efficient manner, no matter where the consumer lives or where the inventory is located. This, coupled with our one-stop online purchasing experience and high-quality professional customer services, has increasingly reinforced our value propositions that differentiate us in the market and strengthened our monetization ability. As we are committed to building the best destination for consumers to buy used cars online in China, we believe the growing traction from our target clientele will translate into expanded topline and improved margins over the long term.”

Mr. Zhen Zeng, Chief Financial Officer of Uxin, said, “In the third quarter, our total revenues increased by 33% year-over-year to RMB461 million, particularly driven by a 247% year-over-year growth of our 2C revenue. Our solid results were also marked by an improving margin profile as a result of our proactive and effective cost management. In particular, as we continued to enhance inspection-to-sales conversion and optimize logistics planning, gross margin further increased to 55% in the quarter from 46% in the prior-year period and 53% in the previous quarter. In addition, our non-GAAP adjusted net loss from continuing operations narrowed significantly by 40% year-over-year and 19% quarter-over-quarter to RMB268 million in the quarter, which is a strong testament to our efforts to further streamline our business operations and enhance efficiency. Looking ahead, prudent cost control and operating efficiency will continue to be one of our key focuses. We believe that our improving ability to monetize online used car transactions and continuing optimization in our operations and cost structure will position us well for driving topline growth, improving margins, and narrowing losses as the year concludes.”

Mr. Zeng added, “Looking forward, we are confident that our business is well supported by our current cash position. First, divesting the loan facilitation related business has significantly lowered our cash requirement. Second, we believe our losses will continue to narrow as a result of our ongoing efforts in cost control and enhancing operating efficiency. Third, pursuant to the definitive agreements we entered into with Golden Pacer, the working capital associated with the divested loan facilitation business we advanced to certain financing partners on behalf of Golden Pacer during the third quarter will be returned back to us in due course when the transaction is closed. Fourth, we expect to receive an aggregate cash consideration of US$100 million after the closing of the transaction. All of this will contribute to our cash position, and coupled with our continuous efforts to enhance our monetization ability and operating efficiency, we believe we can build a more sustainable and profitable business over the long run.”

For earnings history and earnings-related data on Uxin Limited (UXIN) click here.

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