Uxin Ltd. Earnings Conference Call for the Second Quarter of 2022 December 15, 2021 (Thomson StreetEvents)-Edited transcript of Uxin Ltd. Earnings Conference Call or Presentation Wednesday, December 15, 2021 1:00:00 PM Greenwich mean time text​​version transcript ======== ============================== =================== ===================== Enterprise Participants ====== ==================== ============================== ==================== ====== * Fenglin Youxin Co., Ltd.-CFO * Joyce Tang * Kun Dai Uxin Limited-founder, chairman and CEO ============================================== ================================= Conference call participant============= ============================= ===================== ================= * Feidai Tianfeng Securities Brokerage Co., Ltd., Research Department-Research Analyst * Jay Chen * Ting Wu ============ ========================== ======================== ================== Introduction------- ------------------------ -------------------------- ----------------------- operate Member[1] --------------------- ------------------------- ------------------------- --------- Ladies and gentlemen, thank you for your support, welcome to Uxin End September 30, 2021 quarterly earnings conference call. (Operator instructions) Today's conference call is being recorded. If you have any objections, you can disconnect at this time. I now want to transfer the call to the host of today's conference call, Ms. Joyce Tang, the company's IR director. Please go ahead, madam. -------------------------------------------------- ------------------------------ Joyce Tang, [2] -------------- -------------------------------------------------- ---------------- Thank you operator. Hello everyone. Welcome to Uxin’s quarterly earnings conference call ending September 30, 2021. Today's conference call is Uxin founder and CEO DK; Uxin CFO John Lin. DK will review business operations and company highlights, and then John will discuss finances and guidance. In the subsequent question and answer session, they can all answer your questions. Before we begin, I want to remind you that this conference call may contain forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current understanding and assumptions about future events that involve known or unknown risks and uncertainties, which may cause actual results to differ materially from those in the forward-looking statements. Except as required by applicable laws, Uxin does not undertake any obligation to update any forward-looking statements. For more information about potential risks and uncertainties, please refer to our filing with the SEC. With this, I will now forward the call to our CEO DKDK, please continue. -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [3] ------ -------------------------------------------- ------ ------------------------ [Commentary] Hello, everyone. Thank you for participating in our earnings conference call today. In order to better communicate with domestic and foreign investors, my speech today will be in Chinese and English. In the second quarter of the 2022 fiscal year ending September 30, we maintained steady growth in both sales volume and revenue. The total transaction volume this quarter was 3,648 sets, an increase of 21% from the previous quarter. Retail transaction volume was 1,027 sets, an increase of 51% from the previous quarter. In terms of customer reputation, we continue to strive to improve vehicle quality and service experience, and have achieved good results. In this quarter, our Net Promoter Sales (NPS) rose to 56 for the fourth consecutive quarter, a record high, compared to 42 in the previous quarter. Looking ahead, we will continue to optimize and improve the quality of products and services, provide customers with a first-class one-stop car buying experience, and promote high-quality sales growth through a good reputation. In November this year, we completed an important milestone in business development. With the successful launch and operation of our Xi'an IRC, we launched our second IRC in Hefei, Anhui Province. If China has the largest volume of used car transactions, and Anhui Province is one of the regions with the fastest growth in auto consumption, we will launch the second IRC in Hefei, which is a key strategic step for our business expansion. Specifically, the first phase of the Hefei Railway Warehouse covers an area of ​​approximately 100,000 square meters, with a storage capacity of up to 200 vehicles. At present, the total number of vehicles on sale in Hefei is about 1,500, covering 52 brands and a large number of economic and luxury models. As far as we know, this is the largest-selling or used car IRC in China. Compared with Xi'an railway distributors, Hefei railway distributors demonstrated our improvements in sales value quality, operation management, and sales and service systems. Since the start of operation in mid-November, the vehicle quality and service of the new Hefei IRC have been well received by customers. Car sales are steadily increasing every week. After the construction is completed, Hefei Railway Steel Plant will become one of the most advanced second-hand car production centers in China with process, automation, digitization and business intelligence. It will become a one-stop destination for second-hand car purchase, providing vehicle purchase, inspection, refurbishment, demonstration, sales and after-sales service. In terms of vehicle procurement, we have expanded our vehicle pool to include leading electric vehicle brands at home and abroad. We are establishing our electric vehicle business operations by establishing procurement channels, inspection standards and refurbishment procedures, especially for electric vehicle designs. This will enable us to provide customers with high-quality and reliable second-hand electric vehicles. We believe this will provide Uxin with new growth drivers for electric vehicles in the next few years. At the same time, we also hope to use our extensive inspection and repair capabilities to promote the healthy development of China's second-hand electric vehicle market. In terms of vehicle transformation capabilities, we continue to optimize and streamline work processes to improve quality and efficiency. According to our market research, most second-hand car dealers in China only provide very limited or basic maintenance services before selling their vehicles to customers. At Uxin, we have accumulated a comprehensive database of complete refurbishment standards and procedures. By using operations, we can use our scale advantage in procurement to optimize refurbishment costs and can provide our customers with high-quality vehicles at attractive prices. At the same time, we actively invest in the transformation of equipment and technology to further improve efficiency. In Hefei IRC, the average time and cost for repairing cars is reduced by more than 50% compared to the Xi’an IRC just launched. We will continue to focus on improving each business process to achieve a good balance between quality, cost and efficiency. Recently, we completed part of the second-phase financing transaction ahead of schedule. We will expand vehicle purchases, improve refurbishment capabilities, and optimize the supply chain in accordance with the development plan. Investments in these key areas will allow us to increase the available inventory of used cars and further improve the customer's car buying experience. Finally, once again thank our customers and shareholders for their continued support, and thank our team for their hard work and dedication. This will be a long and fruitful journey, and we still have a long way to go. The smooth operation of Xi'an IRC in the past six months and the newly established Hefei Iron and Steel have given us full confidence in our business. Looking to the future, we will continue to devote ourselves to the current development direction and contribute to the long-term and healthy development of China's second-hand car industry. We believe that all our efforts and investments today will be rewarded in the future. With this, I would like to invite our Chief Financial Officer John to speak and introduce you to the financial results. John, please go on. -------------------------------------------------- ------------------------------ Lin Feng, Uxin Co., Ltd.-Chief Financial Officer[4] ------- --- ----------------------------------------------- --- - - - - - - - - - - OK. Thank you, DK, everyone. Let me take you through our financial performance for the quarter ending September 30, 2021. Business has grown steadily this quarter. We started to increase our available-for-sale inventory at Xi’an Iron River Spot, because we received the first batch of new investments in early July, and then reached full capacity production of about 600 vehicles in mid-August. Improved inventory levels have allowed us to increase retail sales. Retail sales increased by 51% month-on-month, and overall sales increased by 21% month-on-month. As a result, our revenue increased by 24.5% compared to the previous quarter. At the same time, we have made great efforts to minimize our cost and expense structure, establish a lean organization and promote efficient operating processes. This impact has been reflected in our continuously improving operating model. One thing I want to comment in particular is the impact of the issuance of high-level convertible preferred shares on fair value due to our financing agreements with NIO Capital and Joy Capital. Since the company announced on April 1, 2021 to sign a binding term list with these two investors, the stock price has risen sharply, resulting in a book loss of RMB 1,654.9 million, or USD 256.8 million, affecting net profit. This loss is purely caused by accounting treatment. This is a non-cash item that has no impact on our cash flow and has nothing to do with our business operations. Regarding our previously announced financing transaction with Weilai Capital and Yuelai Capital, as part of the second US$50 million transaction, we have received US$27.5 million in cash in advance. We expect to receive the remaining USD 22.5 million as planned in the coming months. As DK said before, we will use funds to continue to invest in key business plans, including increasing car inventory, optimizing refurbishment technology and our supply chain to further promote high-quality business growth. As we previously announced, Uxin has been included in the MSCI Global Small-Cap Index-China Index, effective from November 30, 2021. This is the first time Uxin has joined the MSCI index. We think this is a recognition of Uxin's business performance and the potential of China's used car industry. China’s second-hand car industry has huge opportunities, and we believe Uxin is in a favorable position to lead the vigorous development of this promising market. Our earnings release provides complete details for the quarter ending September 30, 2021. So now, I will introduce some key figures. Unless otherwise stated, all figures are in RMB. The transaction volume for the three months ended September 30, 2021 was 3,648 vehicles, compared with 3,011 vehicles in the previous quarter and 2,653 vehicles in the same period last year. The total revenue for the three months ended September 30, 2021 was RMB 345.9 million, compared with RMB 277.8 million in the previous quarter and RMB 76.4 million in the same period last year. The gross profit margin for the three months ended September 30, 2021 was 4.2%, compared with 4% in the previous quarter and negative 22.4% in the same period last year. The continuing operating loss for the three months ended September 30, 2021 was RMB 45.9 million, compared with RMB 50.7 million in the previous quarter and RMB 162.6 million in the same period last year. The three-month non-GAAP-adjusted continuous operating loss for this quarter was RMB 43.2 million, compared with RMB 44.6 million in the previous quarter and RMB 178.3 million in the same period last year. The fair value impact of the issuance of preferred convertible preferred shares resulted in a loss of RMB 1,654.9 million for the three months ended September 30, 2021. As mentioned earlier, the impact is mainly due to the [massive] sharp rise in stock prices since the company announced a press release regarding the deal. The fair value impact is non-cash expenses. Driven by this, the net loss from continuing operations for the three months ended September 30, 2021 was RMB 1,714.6 million, compared with RMB 258.9 million in the same period last year. Excluding the effects of fair value adjustments, the non-GAAP adjusted net loss from continuing operations for the three months ended September 30, 2021 was RMB 56.9 million, compared with RMB 274.6 million in the same period last year. Then it's about our cash position. As of September 30, 2021, we have RMB 230.6 million in cash and cash equivalents. Continue our guidance. We expect total revenue for the three months ended December 31, 2021 to be between RMB 480 million and RMB 500 million. This forecast reflects our current and preliminary views on the market and operating conditions, and may change. This concludes our prepared comments. thanks. So, operator, we are ready to accept the problem. thank you. ================================================== =============================== Questions and answers ----------------- -------------------------------------------------- ------------- Operator[1] -------------------------------- ------------------------Of course, sir. (Operator instructions) We have the first question. This is the route of Fei Dai from TF Securities. -------------------------------------------------- ------------------------------ Dai Fei, Tianfeng Securities Brokerage Co., Ltd., Research Department-Research Analyst[2] -------------------------------------------------- ------------------------------(Foreign language) Repeat my question in English. Judging from the financial situation of the previous quarter, we noticed that the whole vehicle wholesale business contributed a lot to the company's overall performance. Judging from this quarter, this ratio is being further optimized. How does the company understand the development of the business? What impact will it have on the retail automotive business in the future? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [3] ------ -------------------------------------------- ------ ------------------------ [Interpretation] In Uxin, the current sales breakdown of our retail and wholesale business is 1 :2. In view of our brand influence and market reputation, many customers come to us to sell their used cars. However, at present, for some reasons, we do not sell all used cars purchased from individual car owners through our retail business. First, we must consider the base capacity. At the same time, we want to control the level of cash in inventory. In addition, it takes time to improve our sales capabilities. Therefore, in terms of cost, they do not meet our retail standards and exceed our inventory capacity. We will sell through our wholesale business and speed up our inventory turnover rate. In the long run, as our retail inventory levels gradually increase and both wholesale and Xi'an IRC are operating, this percentage breakdown will gradually change. Our retail sales will surely rise gradually. We interpret the sales breakdown between retail and wholesale as an ideal 2:1, which means that retail sales will be twice the wholesale sales. -------------------------------------------------- ------------------------------ Joyce Tang, [4] -------------- -------------------------------------------------- ---------------- Operator, let's move on to the next question. -------------------------------------------------- ------------------------------ Operator[5] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is Jay Chen from China Securities. -------------------------------------------------- ------------------------------ Chen Jie, [6] -------------- -------------------------------------------------- ---------------- (foreign language) -​​---------------------------- -------------------------------------------------- -Feng Lin, Uxin Limited-CFO [7] --------------------------------------- - - - - - - - - - - - - - - - - - - - - - Yes. Sorry, can you repeat your question in English? No? -------------------------------------------------- ------------------------------ Joyce Tang, [8] -------------- -------------------------------------------------- ---------------- [Let me] translate for him. -------------------------------------------------- ------------------------------ Chen Jie, [9] -------------- -------------------------------------------------- - - - - - - - - OK. I have two questions. The first is about the net loss. Can you explain the impact of changes in fair value on net losses? The second question is about cash flow. What are your expectations for cash flow in the next quarter? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [10] ------ -------------------------------------------- ------ ------------------------ [Explanation] Okay. This is the book loss associated with the financing transaction we announced earlier this year. Due to changes in stock prices, this is a pure accounting treatment under the US GAAP. After announcing the transactions with NIO Capital and Yuelai Capital, the rise in Uxin’s share price resulted in the loss of our statements. However, this project is a non-cash item and will not have any impact on the company's cash flow, and has nothing to do with our business development. In terms of cash flow, after receiving funds from investors, we have ample cash on our balance sheet. We received the first batch of US$100 million in July, and we are closing the second batch of US$50 million, which is also ahead of schedule. This reflects investors' full recognition and confidence in our operations and business development. At the same time, the follow-up warrants as part of the transaction are progressing smoothly in close cooperation with investors. These funds will support our future business development. Up to now, our business has performed well and has been expanding as our vehicle inventory continues to grow. In general, because we have made careful planning for the use of cash, I believe that our cash balance is sufficient. -------------------------------------------------- ------------------------------ Joyce Tang, [11] -------------- -------------------------------------------------- ---------------- Operator, please proceed to the next question. -------------------------------------------------- ------------------------------ Operator[12] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is a line from [Wu Ting] from CITIC Securities. -------------------------------------------------- ------------------------------ Wu Ting, [13] -------------- -------------------------------------------------- ---------------- (Foreign language) Let me translate it into English. My question is about used electric cars. On the one hand, it is growing very fast, very fast, but there are other problems, such as discounts or how to estimate its value. I want to hear your plan and views on second-hand electric vehicles? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [14] ------ -------------------------------------------- ------ ------------------------ [Interpretation] We launched a second-hand electric car business. Electric vehicles are a major trend in the automotive industry. Although the number of existing electric vehicles is still relatively large, there is a clear sign that the demand for electric vehicle owners to replace or upgrade their vehicles is increasing, and second-hand electric vehicles are popular and popular in the market. The potential market size of second-hand electric vehicles will be as large as traditional gasoline-powered second-hand vehicles, although there are some differences in inspection, refurbishment, pricing and sales between these categories. We have started our second-hand electric car business. At present, we provide second-hand electric vehicles from a number of well-known electric vehicle brands. At the same time, we continue to build an electric vehicle service system and improve the testing, pricing and after-sales service capabilities of multiple brands. We are also developing the best way to sell used electric cars. We hope to contribute to the healthy development of China's second-hand electric vehicle market by leveraging our extensive expertise and capabilities in the construction of the second-hand car market, and through the use of operations. -------------------------------------------------- ------------------------------ Operator[15] --------------- -------------------------------------------------- - - - - - - - - thanks. We currently have no further questions. I want to return the meeting to our host for any closing comments. Please take over. -------------------------------------------------- ------------------------------ Joyce Tang, [16] -------------- -------------------------------------------------- ---------------- Thank you operator. Thank you to all investors who joined us today. We look forward to seeing you next time. goodbye. -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [17] ------ -------------------------------------------- ------ - - - - - - - - - - - - goodbye. -------------------------------------------------- ------------------------------ Lin Feng, Uxin Co., Ltd.-Chief Financial Officer [18] ------- --- ----------------------------------------------- --- - - - - - - - - - - goodbye. thanks. -------------------------------------------------- ------------------------------ Operator[19] --------------- -------------------------------------------------- - - - - - - - - thanks. This concludes our conference call today. Thank you all for participating. You can disconnect now. [The part marked [Interpreted] in this transcript was read aloud by an interpreter during the live call. ] Investments in these key areas will allow us to increase the available used car inventory and further improve the customer’s car buying experience. Finally, once again thank our customers and shareholders for their continued support, and thank our team for their hard work and dedication. This will be a long and fruitful journey, and we still have a long way to go. The smooth operation of Xi'an IRC in the past six months and the newly established Hefei Iron and Steel have given us full confidence in our business. Looking to the future, we will continue to devote ourselves to the current development direction and contribute to the long-term and healthy development of China's second-hand car industry. We believe that all our efforts and investments today will be rewarded in the future. With this, I would like to invite our Chief Financial Officer John to speak and introduce you to the financial results. John, please go on. -------------------------------------------------- ------------------------------ Lin Feng, Uxin Co., Ltd.-Chief Financial Officer[4] ------- --- ----------------------------------------------- --- - - - - - - - - - - OK. Thank you, DK, everyone. Let me take you through our financial performance for the quarter ending September 30, 2021. Business has grown steadily this quarter. We started to increase our available-for-sale inventory at Xi’an Iron River Spot, because we received the first batch of new investments in early July, and then reached full capacity production of about 600 vehicles in mid-August. Improved inventory levels have allowed us to increase retail sales. Retail sales increased by 51% month-on-month, and overall sales increased by 21% month-on-month. As a result, our revenue increased by 24.5% compared to the previous quarter. At the same time, we have made great efforts to minimize our cost and expense structure, establish a lean organization and promote efficient operating processes. This impact has been reflected in our continuously improving operating model. One thing I want to comment in particular is the impact of the issuance of high-level convertible preferred shares on fair value due to our financing agreements with NIO Capital and Joy Capital. Since the company announced on April 1, 2021 to sign a binding term list with the two investors, the stock price has risen sharply, resulting in a book loss of RMB 1,654.9 million, equivalent to US$256.8 million, affecting net profit. This loss is purely caused by accounting treatment. This is a non-cash item that has no impact on our cash flow and has nothing to do with our business operations. Regarding our previously announced financing transaction with Weilai Capital and Yuelai Capital, as part of the second US$50 million transaction, we have received US$27.5 million in cash in advance. We expect to receive the remaining USD 22.5 million as planned in the coming months. As DK said before, we will use funds to continue to invest in key business plans, including increasing car inventory, optimizing refurbishment technology and our supply chain to further promote high-quality business growth. As we previously announced, Uxin has been included in the MSCI Global Small-Cap Index-China Index, effective from November 30, 2021. This is the first time Uxin has joined the MSCI index. We think this is a recognition of Uxin's business performance and the potential of China's used car industry. China’s second-hand car industry has huge opportunities, and we believe Uxin is in a favorable position to lead the vigorous development of this promising market. Our earnings release provides complete details for the quarter ending September 30, 2021. So now, I will introduce some key figures. Unless otherwise stated, all figures are in RMB. The transaction volume for the three months ended September 30, 2021 was 3,648 vehicles, compared with 3,011 vehicles in the previous quarter and 2,653 vehicles in the same period last year. The total revenue for the three months ended September 30, 2021 was RMB 345.9 million, compared with RMB 277.8 million in the previous quarter and RMB 76.4 million in the same period last year. The gross profit margin for the three months ended September 30, 2021 was 4.2%, compared with 4% in the previous quarter and negative 22.4% in the same period last year. The continuing operating loss for the three months ended September 30, 2021 was RMB 45.9 million, compared with RMB 50.7 million in the previous quarter and RMB 162.6 million in the same period last year. The three-month non-GAAP-adjusted continuous operating loss for this quarter was RMB 43.2 million, compared with RMB 44.6 million in the previous quarter and RMB 178.3 million in the same period last year. The fair value impact of the issuance of preferred convertible preferred shares resulted in a loss of RMB 1,654.9 million for the three months ended September 30, 2021. As mentioned earlier, the impact is mainly due to the [massive] sharp rise in stock prices since the company announced a press release regarding the deal. The fair value impact is non-cash expenses. Driven by this, the net loss from continuing operations for the three months ended September 30, 2021 was RMB 1,714.6 million, compared with RMB 258.9 million in the same period last year. Excluding the effects of fair value adjustments, the non-GAAP adjusted net loss from continuing operations for the three months ended September 30, 2021 was RMB 56.9 million, compared with RMB 274.6 million in the same period last year. Then it's about our cash position. As of September 30, 2021, we have RMB 230.6 million in cash and cash equivalents. Continue our guidance. We expect total revenue for the three months ended December 31, 2021 to be between RMB 480 million and RMB 500 million. This forecast reflects our current and preliminary views on the market and operating conditions, and may change. This concludes our prepared comments. thanks. So, operator, we are ready to accept the problem. thank you. ================================================== =============================== Questions and answers ----------------- -------------------------------------------------- ------------- Operator[1] -------------------------------- ------------------------Of course, sir. (Operator instructions) We have the first question. This is the route of Fei Dai from TF Securities. -------------------------------------------------- ------------------------------ Dai Fei, Tianfeng Securities Brokerage Co., Ltd., Research Department-Research Analyst[2] -------------------------------------------------- ------------------------------(Foreign language) Repeat my question in English. Judging from the financial situation of the previous quarter, we noticed that the whole vehicle wholesale business contributed a lot to the company's overall performance. Judging from this quarter, this ratio is being further optimized. How does the company understand the development of the business? What impact will it have on the retail automotive business in the future? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [3] ------ -------------------------------------------- ------ ------------------------ [Interpretation] In Uxin, the current sales breakdown of our retail and wholesale business is 1 :2. In view of our brand influence and market reputation, many customers come to us to sell their used cars. However, at present, for some reasons, we do not sell all used cars purchased from individual car owners through our retail business. First, we must consider the base capacity. At the same time, we want to control the level of cash in inventory. In addition, it takes time to improve our sales capabilities. Therefore, in terms of cost, they do not meet our retail standards and exceed our inventory capacity. We will sell through our wholesale business and speed up our inventory turnover rate. In the long run, as our retail inventory levels gradually increase and both wholesale and Xi'an IRC are operating, this percentage breakdown will gradually change. Our retail sales will surely rise gradually. We interpret the sales breakdown between retail and wholesale as an ideal 2:1, which means that retail sales will be twice the wholesale sales. -------------------------------------------------- ------------------------------ Joyce Tang, [4] -------------- -------------------------------------------------- ---------------- Operator, let's move on to the next question. -------------------------------------------------- ------------------------------ Operator[5] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is Jay Chen from China Securities. -------------------------------------------------- ------------------------------ Chen Jie, [6] -------------- -------------------------------------------------- ---------------- (foreign language) -​​---------------------------- -------------------------------------------------- -Feng Lin, Uxin Limited-CFO [7] --------------------------------------- - - - - - - - - - - - - - - - - - - - - - Yes. Sorry, can you repeat your question in English? No? -------------------------------------------------- ------------------------------ Joyce Tang, [8] -------------- -------------------------------------------------- ---------------- [Let me] translate for him. -------------------------------------------------- ------------------------------ Chen Jie, [9] -------------- -------------------------------------------------- - - - - - - - - OK. I have two questions. The first is about the net loss. Can you explain the impact of changes in fair value on net losses? The second question is about cash flow. What are your expectations for cash flow in the next quarter? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [10] ------ -------------------------------------------- ------ ------------------------ [Explanation] Okay. This is the book loss associated with the financing transaction we announced earlier this year. Due to changes in stock prices, this is a pure accounting treatment under the US GAAP. After announcing the transactions with NIO Capital and Yuelai Capital, the rise in Uxin’s share price resulted in the loss of our statements. However, this project is a non-cash item and will not have any impact on the company's cash flow, and has nothing to do with our business development. In terms of cash flow, after receiving funds from investors, we have ample cash on our balance sheet. We received the first batch of US$100 million in July, and we are closing the second batch of US$50 million, which is also ahead of schedule. This reflects investors' full recognition and confidence in our operations and business development. At the same time, the follow-up warrants as part of the transaction are progressing smoothly in close cooperation with investors. These funds will support our future business development. Up to now, our business has performed well and has been expanding as our vehicle inventory continues to grow. In general, because we have made careful planning for the use of cash, I believe that our cash balance is sufficient. -------------------------------------------------- ------------------------------ Joyce Tang, [11] -------------- -------------------------------------------------- ---------------- Operator, please proceed to the next question. -------------------------------------------------- ------------------------------ Operator[12] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is a line from [Wu Ting] from CITIC Securities. -------------------------------------------------- ------------------------------ Wu Ting, [13] -------------- -------------------------------------------------- ---------------- (Foreign language) Let me translate it into English. My question is about used electric cars.一方面，它的增长非常快，非常快，但是，还有一些其他问题，例如折扣或如何估算其价值。我想听听您对二手电动汽车的计划和看法？ -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[14] ------ -------------------------------------------------- ------------------------ [解读]我们推出了二手电动汽车业务。电动汽车是汽车行业的一大趋势。尽管现有电动汽车的保有量仍处于相关的更多数量，但有一个明显迹象表明，电动汽车车主更换或升级车辆的需求正在增加，二手电动汽车在市场上受欢迎且畅销。二手电动汽车的潜在市场规模将与传统的汽油动力二手车一样大，尽管这些类别之间在检查、翻新、定价和销售方面存在一些差异。我们已经启动了我们的二手电动汽车业务。目前，我们提供多个知名电动汽车品牌的二手电动汽车。同时，我们继续构建电动汽车服务体系，完善多个品牌的检测、定价和售后服务能力。我们还在开发销售二手电动汽车的最佳方式。我们希望通过利用我们在二手车市场建设方面的广泛专业知识和能力，通过使用运营，为中国二手电动车市场的健康发展做出贡献。 -------------------------------------------------- ------------------------------ 操作员[15] ---------------- -------------------------------------------------- - - - - - - - 谢谢。目前我们没有进一步的问题。我想把会议交还给我们的东道主，以征求任何结束意见。请接管。 -------------------------------------------------- ------------------------------ Joyce Tang, [16] -------------- -------------------------------------------------- ---------------- 谢谢接线员。感谢今天加入我们的所有投资者。我们期待下次再见。再见。 -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[17] ------ -------------------------------------------------- - - - - - - - - - - - - 再见。 -------------------------------------------------- ------------------------------ 林峰，优信有限公司- 首席财务官[18] ---------- -------------------------------------------------- - - - - - - - - - - 再见。谢谢。 -------------------------------------------------- ------------------------------ 操作员[19] ---------------- -------------------------------------------------- - - - - - - - 谢谢。我们今天的电话会议到此结束。感谢大家的参与。您现在可以断开连接。 [此抄本中标记为[Interpreted] 的部分由现场通话中的一名口译员朗读。 ]在这些关键领域的投资将使我们能够增加可用的二手车库存，并进一步改善客户的购车体验。最后，再次感谢我们的客户和股东一直以来的支持，感谢我们团队的辛勤工作和奉献。这将是一段漫长而富有成果的旅程，我们还有很长的路要走。西安铁江现货过去六个月的顺利运作以及新成立的合肥铁钢，让我们对我们的业务充满信心。展望未来，我们将继续致力于当前的发展方向，为中国二手车行业的长期健康发展做出贡献。我们相信我们今天所有的努力和投资都会在未来得到回报。有了这个，我想请我们的首席财务官约翰发言，向您介绍财务结果。约翰，请继续。 -------------------------------------------------- ------------------------------ 林峰，优信有限公司- 首席财务官[4] ---------- -------------------------------------------------- - - - - - - - - - - 好的。谢谢，DK 大家好。让我带您了解我们在截至2021 年9 月30 日的季度的财务业绩。本季度业务稳步增长。我们在西安铁江现货开始增加可供出售的库存，因为我们在7月初收到了第一批新投资，然后在8月中旬达到了600辆左右的满负荷生产。库存水平的改善使我们能够提高零售量。零售量环比增长51%，整体销量环比增长21%。因此，我们的收入与上一季度相比增长了24.5%。与此同时，我们付出了巨大的努力来最小化我们的成本和费用结构，建立一个精益的组织并推动高效的运营流程。这种影响已反映在我们不断改进的运营模式中。我想特别评论的一件事是，由于我们与NIO Capital 和Joy Capital 的融资协议，发行高级可转换优先股对公允价值的影响。由于自该公司于2021 年4 月1 日宣布与这两位投资者签署具有约束力的条款清单以来，股价大幅上涨，导致账面亏损人民币16.549 亿元，折合2.568 亿美元，影响净利润。这种损失纯粹是由会计处理引起的。这是一项非现金项目，对我们的现金流量没有影响，与我们的业务运营无关。关于我们之前宣布的与蔚来资本和悦来资本的融资交易，作为第二次5000万美元交易的一部分，我们已经提前收到了2750万美元的现金。我们预计将在未来几个月按计划收到剩余的2250 万美元。正如DK之前所说，我们将利用资金继续投资于关键业务计划，包括增加汽车库存、优化翻新技术和我们的供应链，以进一步推动高质量的业务增长。正如我们之前宣布的，优信已被纳入MSCI全球小盘股指数-中国指数，自2021年11月30日起生效。这是优信首次加入MSCI指数。我们认为这是对优信业务表现和中国二手车行业潜力的认可。中国的二手车行业拥有巨大的机遇，我们相信优信处于有利地位，可以引领这个前景广阔的市场的蓬勃发展。我们的收益发布中提供了截至2021 年9 月30 日的季度的完整详细信息。所以现在，我将介绍一些关键数字。除非另有说明，所有数字均以人民币为单位。截至2021 年9 月30 日的三个月交易量为3,648 辆，上一季度为3,011 辆，去年同期为2,653 辆。截至2021 年9 月30 日止三个月的总收入为人民币3.459 亿元，上一季度为人民币2.778 亿元，去年同期为人民币7,640 万元。截至2021 年9 月30 日止三个月的毛利率为4.2%，上一季度为4%，去年同期为负22.4%。截至2021 年9 月30 日止三个月的持续经营亏损为人民币4,​​590 万元，上一季度为人民币5,070 万元，去年同期为人民币1.626 亿元。本季度三个月的非美国通用会计准则调整后持续经营亏损为人民币4,​​320 万元，上一季度为人民币4,​​460 万元，去年同期为人民币1.783 亿元。发行优先可转换优先股的公允价值影响导致截至2021 年9 月30 日止三个月亏损人民币16.549 亿元。如前所述，该影响主要是由于股价[大规模]大幅上涨自从该公司宣布有关达成交易的新闻稿以来。公允价值影响为非现金费用。受此推动，截至2021年9月30日止三个月的持续经营净亏损为人民币1,714.6百万元，而去年同期为人民币258.9百万元。如果剔除公允价值调整影响，截至2021 年9 月30 日止三个月的非美国通用会计准则调整后持续经营亏损净额为人民币56.9 百万元，而去年同期为人民币274.6 百万元。然后是关于我们的现金状况。截至2021年9月30日，我们拥有现金及现金等价物人民币2.306亿元。继续我们的指导。我们预计截至2021 年12 月31 日止三个月的总收入将在人民币4.8 亿元至人民币5 亿元之间。该预测反映了我们对市场和经营状况的当前和初步看法，可能会发生变化。我们准备好的评论到此结束。谢谢。所以，接线员，我们准备好接受问题了。谢谢你。 ================================================== ============================== 问题和答案----------------- -------------------------------------------------- ------------- 操作员[1] --------------------------------- - - - - - - - - - - - - - - - - - - - - - - - - 当然，先生. （操作员说明）我们有第一个问题。这是来自TF Securities的Fei Dai的路线。 -------------------------------------------------- ------------------------------ 戴飞，天风证券经纪有限公司，研究部——研究分析师[2] -------------------------------------------------- ------------------------------（外语）用英语重复我的问题。从上一季度的财务状况来看，我们注意到整车批发业务对公司整体业绩的贡献较大。从本季度来看，这一比例正在进一步优化。公司如何理解业务的发展？未来对零售汽车业务又会产生怎样的影响？ -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[3] ------ -------------------------------------------------- ------------------------ [解读]在优信，目前我们的零售和批发业务的销售细分为1：2。鉴于我们的品牌影响力和市场声誉，许多客户来找我们出售他们的二手车。但是，目前，出于某些原因，我们并未通过零售业务销售从个人车主采购的所有二手车。首先，我们必须考虑基础容量。同时，我们希望控制库存中的现金水平。此外，提高我们的销售能力也需要时间。因此，就成本而言，它们不符合我们的零售标准，并且超出了我们的库存能力。我们将通过我们的批发业务进行销售并加快我们的库存周转率。从长远来看，随着我们的零售库存水平逐渐增加以及批发和西安铁江现货都在运营，这一百分比细分将逐渐改变。我们的零售额肯定会逐渐攀升。我们将零售和批发之间的销售细分解释为理想的2:1，这意味着零售销售额将是批发销售额的两倍。 -------------------------------------------------- ------------------------------ Joyce Tang, [4] -------------- -------------------------------------------------- ---------------- 接线员，我们进入下一个问题。 -------------------------------------------------- ------------------------------ 操作员[5] ---------------- -------------------------------------------------- - - - - - - - 当然。我们有下一个问题。这是来自中国证券的Jay Chen。 -------------------------------------------------- ------------------------------ 陈杰, [6] -------------- -------------------------------------------------- ----------------（外语）-​​----------------------------- -------------------------------------------------- Feng Lin, Uxin Limited - CFO [7] ---------------------------------------- - - - - - - - - - - - - - - - - - - - - 是的。对不起，你能用英语重复一下你的问题吗？不？ -------------------------------------------------- ------------------------------ Joyce Tang, [8] -------------- -------------------------------------------------- ---------------- [让我] 为他翻译。 -------------------------------------------------- ------------------------------ 陈杰, [9] -------------- -------------------------------------------------- - - - - - - - - 好的。我有两个问题。第一个是关于净损失。您能否解释公允价值变动对净亏损的影响？第二个问题是关于现金流的。对下一季度现金流的预期如何？ -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[10] ------ -------------------------------------------------- ------------------------ [解释] 好的。这是与我们今年早些时候宣布的融资交易相关的账面损失。由于股票价格的变化，这是美国公认会计准则下的纯粹会计处理。在宣布与蔚来资本和悦来资本的交易后，优信股价的上涨导致我们的报表丢失。但该项目为非现金项目，不会对公司现金流状况产生任何影响，与我们的业务发展无关。在现金流状况方面，我们在收到投资者的资金后，资产负债表上有充裕的现金。我们在7 月份收到了第一批1 亿美元，我们正在关闭第二批5000 万美元，这也比原定计划提前。这体现了投资者对我们经营和业务发展的充分认可和信心。同时，作为交易一部分的后续权证也在与投资者密切合作的情况下进展顺利。该等资金将支持我们未来的业务发展。截至目前，我们的业务表现良好，并随着我们车辆库存的不断增长而不断扩大。总体来说，由于我们对现金的使用做了周密的规划，我相信我们的现金余额是足够的。 -------------------------------------------------- ------------------------------ Joyce Tang, [11] -------------- -------------------------------------------------- ---------------- 接线员，请继续下一个问题。 -------------------------------------------------- ------------------------------ 操作员[12] ---------------- -------------------------------------------------- - - - - - - - 当然。我们有下一个问题。这是来自中信证券的【吴廷】的台词。 -------------------------------------------------- ------------------------------ 吴廷, [13] -------------- -------------------------------------------------- ---------------- （外语）让我翻译成英文。我的问题是关于电动车二手车。一方面，它的增长非常快，非常快，但是，还有一些其他问题，例如折扣或如何估算其价值。我想听听您对二手电动汽车的计划和看法？ -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[14] ------ -------------------------------------------------- ------------------------ [解读]我们推出了二手电动汽车业务。电动汽车是汽车行业的一大趋势。尽管现有电动汽车的保有量仍处于相关的更多数量，但有一个明显迹象表明，电动汽车车主更换或升级车辆的需求正在增加，二手电动汽车在市场上受欢迎且畅销。二手电动汽车的潜在市场规模将与传统的汽油动力二手车一样大，尽管这些类别之间在检查、翻新、定价和销售方面存在一些差异。我们已经启动了我们的二手电动汽车业务。目前，我们提供多个知名电动汽车品牌的二手电动汽车。同时，我们继续构建电动汽车服务体系，完善多个品牌的检测、定价和售后服务能力。我们还在开发销售二手电动汽车的最佳方式。我们希望通过利用我们在二手车市场建设方面的广泛专业知识和能力，通过使用运营，为中国二手电动车市场的健康发展做出贡献。 -------------------------------------------------- ------------------------------ 操作员[15] ---------------- -------------------------------------------------- - - - - - - - 谢谢。目前我们没有进一步的问题。我想把会议交还给我们的东道主，以征求任何结束意见。请接管。 -------------------------------------------------- ------------------------------ Joyce Tang, [16] -------------- -------------------------------------------------- ---------------- 谢谢接线员。感谢今天加入我们的所有投资者。我们期待下次再见。再见。 -------------------------------------------------- ------------------------------ 戴坤，优信有限公司- 创始人、董事长兼首席执行官[17] ------ -------------------------------------------------- - - - - - - - - - - - - 再见。 -------------------------------------------------- ------------------------------ 林峰，优信有限公司- 首席财务官[18] ---------- -------------------------------------------------- - - - - - - - - - - 再见。谢谢。 -------------------------------------------------- ------------------------------ 操作员[19] ---------------- -------------------------------------------------- - - - - - - - 谢谢。我们今天的电话会议到此结束。感谢大家的参与。您现在可以断开连接。 [此抄本中标记为[Interpreted] 的部分由现场通话中的一名口译员朗读。 ](Operator instructions) We have the first question. This is the route of Fei Dai from TF Securities. -------------------------------------------------- ------------------------------ Dai Fei, Tianfeng Securities Brokerage Co., Ltd., Research Department-Research Analyst[2] -------------------------------------------------- ------------------------------(Foreign language) Repeat my question in English. Judging from the financial situation of the previous quarter, we noticed that the whole vehicle wholesale business contributed a lot to the company's overall performance. Judging from this quarter, this ratio is being further optimized. How does the company understand the development of the business? What impact will it have on the retail automotive business in the future? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [3] ------ -------------------------------------------- ------ ------------------------ [Interpretation] In Uxin, the current sales breakdown of our retail and wholesale business is 1 :2. In view of our brand influence and market reputation, many customers come to us to sell their used cars. However, at present, for some reasons, we do not sell all used cars purchased from individual car owners through our retail business. First, we must consider the base capacity. At the same time, we want to control the level of cash in inventory. In addition, it takes time to improve our sales capabilities. Therefore, in terms of cost, they do not meet our retail standards and exceed our inventory capacity. We will sell through our wholesale business and speed up our inventory turnover rate. In the long run, as our retail inventory levels gradually increase and both wholesale and Xi'an IRC are operating, this percentage breakdown will gradually change. Our retail sales will surely rise gradually. We interpret the sales breakdown between retail and wholesale as an ideal 2:1, which means that retail sales will be twice the wholesale sales. -------------------------------------------------- ------------------------------ Joyce Tang, [4] -------------- -------------------------------------------------- ---------------- Operator, let's move on to the next question. -------------------------------------------------- ------------------------------ Operator[5] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is Jay Chen from China Securities. -------------------------------------------------- ------------------------------ Chen Jie, [6] -------------- -------------------------------------------------- ---------------- (foreign language) -​​---------------------------- -------------------------------------------------- -Feng Lin, Uxin Limited-CFO [7] --------------------------------------- - - - - - - - - - - - - - - - - - - - - - Yes. Sorry, can you repeat your question in English? No? -------------------------------------------------- ------------------------------ Joyce Tang, [8] -------------- -------------------------------------------------- ---------------- [Let me] translate for him. -------------------------------------------------- ------------------------------ Chen Jie, [9] -------------- -------------------------------------------------- - - - - - - - - OK. I have two questions. The first is about the net loss. Can you explain the impact of changes in fair value on net losses? The second question is about cash flow. What are your expectations for cash flow in the next quarter? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [10] ------ -------------------------------------------- ------ ------------------------ [Explanation] Okay. This is the book loss associated with the financing transaction we announced earlier this year. Due to changes in stock prices, this is a pure accounting treatment under the US GAAP. After announcing the transactions with NIO Capital and Yuelai Capital, the rise in Uxin’s share price resulted in the loss of our statements. However, this project is a non-cash item and will not have any impact on the company's cash flow, and has nothing to do with our business development. In terms of cash flow, after receiving funds from investors, we have ample cash on our balance sheet. We received the first batch of US$100 million in July, and we are closing the second batch of US$50 million, which is also ahead of schedule. This reflects investors' full recognition and confidence in our operations and business development. At the same time, the follow-up warrants as part of the transaction are progressing smoothly in close cooperation with investors. These funds will support our future business development. Up to now, our business has performed well and has been expanding as our vehicle inventory continues to grow. In general, because we have made careful planning for the use of cash, I believe that our cash balance is sufficient. -------------------------------------------------- ------------------------------ Joyce Tang, [11] -------------- -------------------------------------------------- ---------------- Operator, please proceed to the next question. -------------------------------------------------- ------------------------------ Operator[12] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is a line from [Wu Ting] from CITIC Securities. -------------------------------------------------- ------------------------------ Wu Ting, [13] -------------- -------------------------------------------------- ---------------- (Foreign language) Let me translate it into English. My question is about used electric cars. On the one hand, it is growing very fast, very fast, but there are other problems, such as discounts or how to estimate its value. I want to hear your plan and views on second-hand electric vehicles? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [14] ------ -------------------------------------------- ------ ------------------------ [Interpretation] We launched a second-hand electric car business. Electric vehicles are a major trend in the automotive industry. Although the number of existing electric vehicles is still relatively large, there is a clear sign that the demand for electric vehicle owners to replace or upgrade their vehicles is increasing, and second-hand electric vehicles are popular and popular in the market. The potential market size of second-hand electric vehicles will be as large as traditional gasoline-powered second-hand vehicles, although there are some differences in inspection, refurbishment, pricing and sales between these categories. We have started our second-hand electric car business. At present, we provide second-hand electric vehicles of a number of well-known electric vehicle brands. At the same time, we continue to build an electric vehicle service system and improve the testing, pricing and after-sales service capabilities of multiple brands. We are also developing the best way to sell used electric cars. We hope to contribute to the healthy development of China's second-hand electric vehicle market by leveraging our extensive expertise and capabilities in the construction of the second-hand car market, and through the use of operations. -------------------------------------------------- ------------------------------ Operator[15] --------------- -------------------------------------------------- - - - - - - - - thanks. We currently have no further questions. I want to return the meeting to our host for any closing comments. Please take over. -------------------------------------------------- ------------------------------ Joyce Tang, [16] -------------- -------------------------------------------------- ---------------- Thank you operator. Thank you to all investors who joined us today. We look forward to seeing you next time. goodbye. -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [17] ------ -------------------------------------------- ------ - - - - - - - - - - - - goodbye. -------------------------------------------------- ------------------------------ Lin Feng, Uxin Co., Ltd.-Chief Financial Officer [18] ------- --- ----------------------------------------------- --- - - - - - - - - - - goodbye. thanks. -------------------------------------------------- ------------------------------ Operator[19] --------------- -------------------------------------------------- - - - - - - - - thanks. This concludes our conference call today. Thank you all for participating. You can disconnect now. [The part marked [Interpreted] in this transcript was read aloud by an interpreter during the live call. ] Investments in these key areas will allow us to increase the available used car inventory and further improve the customer’s car buying experience. Finally, once again thank our customers and shareholders for their continued support, and thank our team for their hard work and dedication. This will be a long and fruitful journey, and we still have a long way to go. The smooth operation of Xi'an IRC in the past six months and the newly established Hefei Iron and Steel have given us full confidence in our business. Looking to the future, we will continue to devote ourselves to the current development direction and contribute to the long-term and healthy development of China's second-hand car industry. We believe that all our efforts and investments today will be rewarded in the future. With this, I would like to invite our Chief Financial Officer John to speak and introduce you to the financial results. John, please go on. -------------------------------------------------- ------------------------------ Lin Feng, Uxin Co., Ltd.-Chief Financial Officer[4] ------- --- ----------------------------------------------- --- - - - - - - - - - - OK. Thank you, DK, everyone. Let me take you through our financial performance for the quarter ending September 30, 2021. Business has grown steadily this quarter. We started to increase our available-for-sale inventory at Xi’an Iron River Spot, because we received the first batch of new investments in early July, and then reached full capacity production of about 600 vehicles in mid-August. Improved inventory levels have allowed us to increase retail sales. Retail sales increased by 51% month-on-month, and overall sales increased by 21% month-on-month. As a result, our revenue increased by 24.5% compared to the previous quarter. At the same time, we have made great efforts to minimize our cost and expense structure, establish a lean organization and promote efficient operating processes. This impact has been reflected in our continuously improving operating model. One thing I want to comment in particular is the impact of the issuance of high-level convertible preferred shares on fair value due to our financing agreements with NIO Capital and Joy Capital. Since the company announced on April 1, 2021 to sign a binding term list with the two investors, the stock price has risen sharply, resulting in a book loss of RMB 1,654.9 million, equivalent to US$256.8 million, affecting net profit. This loss is purely caused by accounting treatment. This is a non-cash item that has no impact on our cash flow and has nothing to do with our business operations. Regarding our previously announced financing transaction with Weilai Capital and Yuelai Capital, as part of the second US$50 million transaction, we have received US$27.5 million in cash in advance. We expect to receive the remaining USD 22.5 million as planned in the coming months. As DK said before, we will use funds to continue to invest in key business plans, including increasing car inventory, optimizing refurbishment technology and our supply chain to further promote high-quality business growth. As we previously announced, Uxin has been included in the MSCI Global Small-Cap Index-China Index, effective from November 30, 2021. This is the first time Uxin has joined the MSCI index. We think this is a recognition of Uxin's business performance and the potential of China's used car industry. China’s second-hand car industry has huge opportunities, and we believe Uxin is in a favorable position to lead the vigorous development of this promising market. Our earnings release provides complete details for the quarter ending September 30, 2021. So now, I will introduce some key figures. Unless otherwise stated, all figures are in RMB. The transaction volume for the three months ended September 30, 2021 was 3,648 vehicles, compared with 3,011 vehicles in the previous quarter and 2,653 vehicles in the same period last year. The total revenue for the three months ended September 30, 2021 was RMB 345.9 million, compared with RMB 277.8 million in the previous quarter and RMB 76.4 million in the same period last year. The gross profit margin for the three months ended September 30, 2021 was 4.2%, compared with 4% in the previous quarter and negative 22.4% in the same period last year. The continuing operating loss for the three months ended September 30, 2021 was RMB 45.9 million, compared with RMB 50.7 million in the previous quarter and RMB 162.6 million in the same period last year. The three-month non-GAAP-adjusted continuous operating loss for this quarter was RMB 43.2 million, compared with RMB 44.6 million in the previous quarter and RMB 178.3 million in the same period last year. The fair value impact of the issuance of preferred convertible preferred shares resulted in a loss of RMB 1,654.9 million for the three months ended September 30, 2021. As mentioned earlier, the impact is mainly due to the [massive] sharp rise in stock prices since the company announced a press release regarding the deal. The fair value impact is non-cash expenses. Driven by this, the net loss from continuing operations for the three months ended September 30, 2021 was RMB 1,714.6 million, compared with RMB 258.9 million in the same period last year. Excluding the effects of fair value adjustments, the non-GAAP adjusted net loss from continuing operations for the three months ended September 30, 2021 was RMB 56.9 million, compared with RMB 274.6 million in the same period last year. Then it's about our cash position. As of September 30, 2021, we have RMB 230.6 million in cash and cash equivalents. Continue our guidance. We expect total revenue for the three months ended December 31, 2021 to be between RMB 480 million and RMB 500 million. This forecast reflects our current and preliminary views on the market and operating conditions, and may change. This concludes our prepared comments. thanks. So, operator, we are ready to accept the problem. thank you. ================================================== =============================== Questions and answers ----------------- -------------------------------------------------- ------------- Operator[1] -------------------------------- ------------------------Of course, sir. (Operator instructions) We have the first question. This is the route of Fei Dai from TF Securities. -------------------------------------------------- ------------------------------ Dai Fei, Tianfeng Securities Brokerage Co., Ltd., Research Department-Research Analyst[2] -------------------------------------------------- ------------------------------(Foreign language) Repeat my question in English. Judging from the financial situation of the previous quarter, we noticed that the whole vehicle wholesale business contributed a lot to the company's overall performance. Judging from this quarter, this ratio is being further optimized. How does the company understand the development of the business? What impact will it have on the retail automotive business in the future? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [3] ------ -------------------------------------------- ------ ------------------------ [Interpretation] In Uxin, the current sales breakdown of our retail and wholesale business is 1 :2. In view of our brand influence and market reputation, many customers come to us to sell their used cars. However, at present, for some reasons, we do not sell all used cars purchased from individual car owners through our retail business. First, we must consider the base capacity. At the same time, we want to control the level of cash in inventory. In addition, it takes time to improve our sales capabilities. Therefore, in terms of cost, they do not meet our retail standards and exceed our inventory capacity. We will sell through our wholesale business and speed up our inventory turnover rate. In the long run, as our retail inventory levels gradually increase and both wholesale and Xi'an IRC are operating, this percentage breakdown will gradually change. Our retail sales will surely rise gradually. We interpret the sales breakdown between retail and wholesale as an ideal 2:1, which means that retail sales will be twice the wholesale sales. -------------------------------------------------- ------------------------------ Joyce Tang, [4] -------------- -------------------------------------------------- ---------------- Operator, let's move on to the next question. -------------------------------------------------- ------------------------------ Operator[5] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is Jay Chen from China Securities. -------------------------------------------------- ------------------------------ Chen Jie, [6] -------------- -------------------------------------------------- ---------------- (foreign language) -​​---------------------------- -------------------------------------------------- -Feng Lin, Uxin Limited-CFO [7] --------------------------------------- - - - - - - - - - - - - - - - - - - - - - Yes. Sorry, can you repeat your question in English? No? -------------------------------------------------- ------------------------------ Joyce Tang, [8] -------------- -------------------------------------------------- ---------------- [Let me] translate for him. -------------------------------------------------- ------------------------------ Chen Jie, [9] -------------- -------------------------------------------------- - - - - - - - - OK. I have two questions. The first is about the net loss. Can you explain the impact of changes in fair value on net losses? The second question is about cash flow. What are your expectations for cash flow in the next quarter? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder, Chairman and Chief Executive Officer [10] ------ -------------------------------------------- ------ ------------------------ [Explanation] Okay. This is the book loss associated with the financing transaction we announced earlier this year. Due to changes in stock prices, this is a pure accounting treatment under the US GAAP. After announcing the transactions with NIO Capital and Yuelai Capital, the rise in Uxin’s share price resulted in the loss of our statements. However, this project is a non-cash item and will not have any impact on the company's cash flow, and has nothing to do with our business development. In terms of cash flow, after receiving funds from investors, we have ample cash on our balance sheet. We received the first batch of US$100 million in July, and we are closing the second batch of US$50 million, which is also ahead of schedule. This reflects investors' full recognition and confidence in our operations and business development. At the same time, the follow-up warrants as part of the transaction are progressing smoothly in close cooperation with investors. These funds will support our future business development. Up to now, our business has performed well and has been expanding as our vehicle inventory continues to grow. In general, because we have made careful planning for the use of cash, I believe that our cash balance is sufficient. -------------------------------------------------- ------------------------------ Joyce Tang, [11] -------------- -------------------------------------------------- ---------------- Operator, please proceed to the next question. -------------------------------------------------- ------------------------------ Operator[12] --------------- -------------------------------------------------- - - - - - - - - Of course. We have the next question. This is a line from [Wu Ting] from CITIC Securities. -------------------------------------------------- ------------------------------ Wu Ting, [13] -------------- -------------------------------------------------- ---------------- (Foreign language) Let me translate it into English. My question is about used electric cars. On the one hand, it is growing very fast, very fast, but there are other problems, such as discounts or how to estimate its value. I want to hear your plan and views on second-hand electric vehicles? -------------------------------------------------- ------------------------------ Dai Kun, Uxin Co., Ltd.-Founder,

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