Highlights for the Quarter Ended
- 2C transaction volume was 3,887 units for the three months ended
June 30, 2020 , compared with 24,585 in the same period last year. - 2C GMV1 was
RMB426 million for the three months endedJune 30, 2020 , compared withRMB2,864 million in the same period last year. - Total revenues were
RMB62.2 million (US$8.8 million ) for the three months endedJune 30, 2020 , compared withRMB389.3 million in the same period last year.- 2C revenue was
RMB51.7 million (US$7.3 million ) for the three months endedJune 30, 2020 , compared withRMB341.0 million in the same period last year.
- 2C revenue was
- Gross margin was negative 28.4% for the three months ended
June 30, 2020 , compared with a gross margin of 55.9% in the same period last year. - Loss from continuing operations was
RMB128.4 million (US$18.2 million ) for the three months endedJune 30, 2020 , compared withRMB223.2 million in the same period last year. - Non-GAAP adjusted loss from continuing operations was
RMB133.0 million (US$18.8 million ) for the three months endedJune 30, 2020 , compared withRMB196.1 million in the same period last year. - Net loss from continuing operations was
RMB152.4 million (US$21.6 million ) for the three months endedJune 30, 2020 , compared withRMB240.8 million in the same period last year. - Non-GAAP adjusted net loss from continuing operations was
RMB157.1 million (US$22.2 million ) for the three months endedJune 30, 2020 , compared withRMB213.7 million in the same period last year.
Mr.
“Under the previous financing-driven approach, we experienced rapid transaction volume growth, but we were also weighed down by taking on significant underlying credit risk from the guarantee liabilities which ultimately placed constraints on our cashflow. With this impediment behind us, we have entered into a new phase of development as a transaction-oriented online used car dealer, focusing squarely on offering high-quality value-for-money used cars and premium purchasing services. We believe that our focus on continuously enhancing used car quality and purchasing services is the best way to gain more customer trust and word-of-mouth referrals. Although this approach requires more time to achieve optimal scale, we believe it is key for maintaining our long-term competitive advantages and achieving sustainable growth. In order to create the best value and experience across the entire value chain for our customers, we upgraded our used car transaction process and migrated every sales step online. In transforming our business, the strategic focus has been on selecting value-for-money used cars from across the country, ensuring the highest standards of quality by careful inspection, simplifying our pricing structure, offering professional consulting and purchasing services in a timely fashion from our online sales consultants, working with more financing partners to offer diversified used car finance products and improve overall loan approval rates for our customers, and making the purchasing process more convenient and efficient for our customers. So far, our efforts have translated into better customer satisfaction and greater trust in the
Mr.
Financial Results for the Quarter Ended
Total revenues were
2C revenue was
- Commission revenue was
RMB28.6 million (US$4.0 million ) for the three months endedJune 30, 2020 , compared withRMB178.9 million in the same period last year. The decrease was primarily due to decreases in transaction volume and GMV. Commission rate2 expanded slightly to 6.7% for the three months endedJune 30, 2020 from 6.2% in the same period last year as a result of the Company’s continuous efforts to offer a nationwide selection of best value-for-money used cars as well as quality transaction services to consumers. - Value-added service revenue was
RMB23.1 million (US$3.3 million ) for the three months endedJune 30, 2020 , compared withRMB162.1 million in the same period last year. The decrease was primarily due to decreases in transaction volume and GMV. VAS take rate3 decreased slightly to 5.4% for the three months endedJune 30, 2020 from 5.7% in the same period last year as a result of pricing adjustment during the COVID-19 period.
Other revenue4 was
Cost of revenues was
Gross margin was negative 28.4% for the three months ended
Total operating expenses were
- Sales and marketing expenses decreased by 60.6% year-over-year to
RMB115.8 million (US$16.4 million ) for the three months endedJune 30, 2020 . The decrease was mainly due to a decrease in salaries and benefits expenses as a result of the adoption of a flexible workload-based staffing program and some termination of employment contracts resulting from the Company’s business model upgrade as well as a decrease in traffic acquisition cost. Sales and marketing expenses excluding the impact of share-based compensation wereRMB110.7 million .
- General and administrative expenses decreased by 29.0% year-over-year to
RMB86.9 million (US$12.3 million ) for the three months endedJune 30, 2020 . The decrease was mainly due to a decrease in salaries and benefits as a result of the adoption of a flexible workload-based staffing program and some termination of employment contracts resulting from the Company’s business model upgrade as well as a decrease in share-based compensation expenses and partially offset by severance costs as a result of some termination of employment contracts and a goodwill impairment ofRMB9.5 million recorded in the reported quarter. General and administrative expenses excluding the impact of share-based compensation wereRMB97.7 million .
- Research and development expenses decreased by 28.5% year-over-year to
RMB22.8 million (US$3.2 million ) for the three months endedJune 30, 2020 . The decrease was primarily due to a decrease in salaries and benefits expenses as a result of the adoption of a flexible workload-based staffing program and some termination of employment contracts resulting from the Company’s business model upgrade. Research and development expenses excluding the impact of share-based compensation wereRMB23.9 million .
- Gain from guarantee liabilities was nil for the three months ended
June 30, 2020 . The Company incurred guarantee liabilities associated with the remaining guarantee obligations from its historically-facilitated loans that were not transferred toGolden Pacer . The Company adopted Accounting Standards Update (ASU) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” onJanuary 1, 2020 under a modified retrospective method. Before the adoption of ASC 326, gain or loss related to guarantee liabilities accounted for the under the greater of the amount determined based on ASC 460 and the amount determined under ASC 450 was recorded as “gain or loss from guarantee liabilities”. After the adoption of ASC 326, expected credit losses of contingent guarantee liabilities shall be accounted for in addition to and separately from the stand ready guarantee liabilities accounted for under ASC 460, and the provision for contingent guarantee liabilities is currently recorded within “provision for credit losses”; and the gain released from the stand ready guarantee liabilities accounted for under ASC 460 is currently recorded within “other operating income”.
- Provision for credit losses, net was
RMB74.0 million (US$10.5 million ) for the three months endedJune 30, 2020 . The reversals of provision for credit losses were primarily due to a release of guarantee liabilities ofRMB86.0 million as a result of a supplemental agreement reached between the Company and one of its major financing partners inApril 2020 with regards to the Company’s historically-facilitated loans. Pursuant to this supplemental agreement, this financing partner agreed to set a cap on the amount of cash the Company would use to fulfil its guarantee liabilities with this financing partner from 2020 to 2022.
Loss from continuing operations was
Non-GAAP adjusted loss from continuing operations which excludes the impact of share-based compensation was
Net loss from continuing operations was
Non-GAAP adjusted net loss from continuing operations which excludes the impact of share-based compensation was
As of
Liquidity
The COVID-19 pandemic has caused a general slowdown in economic activity, and the weakened consumer confidence and spending power resulted in a relatively slow recovery in transaction volumes. These factors have materially and adversely affected the Company’s business, results of operations, financial condition and cash flows. Although China’s economy has been gradually recovering in the past few months, and the used car market has been slowly picking up since
In response to the current economic situation, the Company has taken actions to improve its liquidity and cash position. As disclosed in the earnings release for the quarter ended
However, the continuing impact of the COVID-19 pandemic continues to create significant challenges and uncertainties for the market environment, which could continue to negatively impact the demand for used cars. Also, the Company’s business plan includes several significant assumptions. These assumptions include the increasing demand for used cars over the next twelve months, the successful implementation of the Company’s program to build used car inventory, the ability to successfully negotiate with financing partners and the ability to control costs and outgoing cash flows. In addition, the financing projects that the Company is working on are subject to certain uncertainties. These conditions and uncertainties cast substantial doubt on the Company’s ability to pay obligations as they become due over the next twelve months, which would impact the Company’s ability to continue as a going concern. With the COVID-19 pandemic evolving continuously, if the Company is successful in the aforementioned business plan and the ongoing development of the financing projects, management believes that the Company will have sufficient liquidity for at least the next twelve months of operations.
Business Outlook
From
Conference Call
The Company’s management will host an earnings conference call at
Due to the outbreak of COVID-19, operator assisted conference calls are not available at the moment. All participants must preregister online prior to the call to receive the dial-in details.
Conference Call Preregistration
Participants can register for the conference call by navigating to http://apac.directeventreg.com/registration/event/2587769. Once preregistration has been completed, participants will receive dial-in numbers, an event passcode, and a unique registrant ID.
To join the conference, please dial the number you receive, enter the event passcode followed by your unique registrant ID, and you will be joined to the conference instantly.
A telephone replay of the call will be available after the conclusion of the conference call until
U.S.: +1 646 254 3697
International: +61 2 8199 0299
Conference ID: 2587769
A live webcast and archive of the conference call will be available on the Investor Relations section of Uxin’s website at http://ir.xin.com.
About
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses a non-GAAP measure, adjusted loss from continuing operations, adjusted net (loss)/income from continuing operations and adjusted net (loss)/earnings from continuing operations per share, as a supplemental measure to review and assess its operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted loss from continuing operations excluding share-based compensation. The Company defines adjusted net (loss)/income from continuing operations as net (loss)/income from continuing operations excluding share-based compensation. The Company presents the non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Adjusted net (loss)/income from continuing operations enables management to assess the Company’s operating results without considering the impact of share-based compensation, which is non-cash charges. The Company also believes that the use of the non-GAAP measure facilitates investors' assessment of its operating performance as this measure excludes certain expenses that are not expected to result in cash payments.
The non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using adjusted net (loss)/income from continuing operations is that it does not reflect all items of income and expense that affect the Company’s operations. Share-based compensation has been and may continue to be incurred in the business and is not reflected in the presentation of adjusted net loss. Further, the non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.
The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.
Reconciliations of Uxin’s non-GAAP financial measures to the most comparable
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Uxin’s strategic and operational plans, contain forward-looking statements.
For investor and media enquiries, please contact:
Uxin Investor Relations
Tel: +86 10 5691-6765
Email: ir@xin.com
Christensen
Tel: +86 10 5900 1548
Email: uxin@christensenir.com
1 GMV is gross merchandise value as measured by gross selling price of used cars, excluding service fees charged.
2 Commission rate is measured by 2C commission revenue divided by 2C GMV.
3 VAS take rate is measured by 2C VAS revenue divided by 2C GMV.
4 Other revenue mainly consists of revenue streams from advertising and the selling of sales leads in relation to consumers who want to sell their existing cars.
Unaudited Consolidated Statements of Comprehensive (Loss)/Income | |||||||
(In thousands except for number of shares and per share data) | |||||||
For the three months ended | |||||||
2019 | 2020 | ||||||
RMB | RMB | US$ | |||||
Revenues | |||||||
To consumers (“2C”) | |||||||
- Commission revenue | 178,901 | 28,582 | 4,046 | ||||
- Value-added service revenue | 162,054 | 23,131 | 3,274 | ||||
Others | 48,343 | 10,515 | 1,488 | ||||
Total revenues | 389,298 | 62,228 | 8,808 | ||||
Cost of revenues | (171,693 | ) | (79,912 | ) | (11,311 | ) | |
Gross profit/(loss) | 217,605 | (17,684 | ) | (2,503 | ) | ||
Operating expenses | |||||||
Sales and marketing | (293,664 | ) | (115,750 | ) | (16,383 | ) | |
General and administrative | (122,369 | ) | (86,898 | ) | (12,300 | ) | |
Research and development | (31,897 | ) | (22,805 | ) | (3,228 | ) | |
Gain from guarantee liabilities | 7,147 | - | - | ||||
Provision for credit losses, net (i) | - | 74,022 | 10,477 | ||||
Total operating expenses | (440,783 | ) | (151,431 | ) | (21,434 | ) | |
Other operating income (ii) | - | 40,752 | 5,768 | ||||
Loss from continuing operations | (223,178 | ) | (128,363 | ) | (18,169 | ) | |
Interest income | 3,988 | 1,136 | 161 | ||||
Interest expenses | (26,440 | ) | (28,969 | ) | (4,100 | ) | |
Other income | 5,853 | 1,897 | 269 | ||||
Other expenses | (5,425 | ) | (4,097 | ) | (580 | ) | |
Foreign exchange losses | 76 | 274 | 39 | ||||
Gain from disposal of investments, net | 28,257 | - | - | ||||
Impairment of long-term investment | (37,775 | ) | - | - | |||
Loss from continuing operations before income tax expense | (254,644 | ) | (158,122 | ) | (22,380 | ) | |
Income tax credit/(expense) | 5,632 | (32 | ) | (5 | ) | ||
Equity in income of affiliates | 8,207 | 5,754 | 814 | ||||
Net loss from continuing operations, net of tax | (240,805 | ) | (152,400 | ) | (21,571 | ) | |
Less: net loss attributable to non-controlling interests shareholders | (346 | ) | (5 | ) | (1 | ) | |
Net loss from continuing operations, attributable to | (240,459 | ) | (152,395 | ) | (21,570 | ) | |
Discontinued operations | |||||||
Net (loss)/income from discontinued operations before income tax (including a net disposal gain of months ended | (124,930 | ) | 295,744 | 41,860 | |||
Income tax expense | (268 | ) | - | - | |||
Net (loss)/income from discontinued operations | (125,198 | ) | 295,744 | 41,860 | |||
Net (loss)/income from discontinued operations attributable to | (125,198 | ) | 295,744 | 41,860 | |||
Net (loss)/income | (366,003 | ) | 143,344 | 20,289 | |||
Less: net loss attributable to non-controlling interests shareholders | (346 | ) | (5 | ) | (1 | ) | |
Net (loss)/income attributable to | (365,657 | ) | 143,349 | 20,290 | |||
Net (loss)/income attributable to ordinary shareholders | (365,657 | ) | 143,349 | 20,290 | |||
Net (loss)/income | (366,003 | ) | 143,344 | 20,289 | |||
Foreign currency translation | (12,859 | ) | 1,687 | 239 | |||
Total comprehensive (loss)/income | (378,862 | ) | 145,031 | 20,528 | |||
Less: total comprehensive loss attributable to non-controlling interests shareholders | (346 | ) | (5 | ) | (1 | ) | |
Total comprehensive (loss)/income attributable to | (378,516 | ) | 145,036 | 20,529 | |||
Net (loss)/income attributable to ordinary shareholders | (365,657 | ) | 143,349 | 20,290 | |||
Weighted average shares outstanding – basic | 882,761,118 | 891,184,665 | 891,184,665 | ||||
Weighted average shares outstanding – diluted | 882,761,118 | 1,179,129,118 | 1,179,129,118 | ||||
(Loss)/earnings per share for ordinary shareholders, basic | |||||||
Continuing operations | (0.27 | ) | (0.17 | ) | (0.02 | ) | |
Discontinued operations | (0.14 | ) | 0.33 | 0.05 | |||
(Loss)/earnings per share for ordinary shareholders, diluted | |||||||
Continuing operations | (0.27 | ) | (0.17 | ) | (0.02 | ) | |
Discontinued operations | (0.14 | ) | 0.27 | 0.04 | |||
(i) The reversals of provision for credit losses were primarily due to a release of contingent guarantee liabilities of | |||||||
(ii) We have adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (“ASU 2016-13”) effective | |||||||
(iii) We recorded an additional impairment of | |||||||
On | |||||||
Unaudited Consolidated Balance Sheets | |||||||
(In thousands except for number of shares and per share data) | |||||||
As of | As of | ||||||
2020 | 2020 | ||||||
RMB | RMB | US$ | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | 342,504 | 240,775 | 34,079 | ||||
Restricted cash | 454,931 | 348,308 | 49,300 | ||||
Accounts receivable, net | 6,397 | 2,928 | 416 | ||||
Amounts due from related parties (i) | 28,070 | 151,751 | 21,479 | ||||
Loan recognized as a result of payment under the guarantee, net of provision for credit losses of RMB2,190,575 and | 404,174 | 423,483 | 59,940 | ||||
Advance to sellers, net | 132,526 | 70,579 | 9,990 | ||||
Other receivables, net of provision for credit losses of | 287,753 | 240,584 | 34,052 | ||||
Inventory | 10,314 | 11,586 | 1,640 | ||||
Prepaid expenses and other current assets | 137,148 | 137,066 | 19,400 | ||||
Financial lease receivables, net of provision for credit losses of | 15,048 | 7,624 | 1,079 | ||||
Net assets transferred (iii) | 420,000 | - | - | ||||
Total current assets | 2,238,865 | 1,634,684 | 231,375 | ||||
Non-current assets | |||||||
Property, equipment and software, net | 87,558 | 66,256 | 9,378 | ||||
Intangible assets, net | 139 | 93 | 13 | ||||
9,541 | - | - | |||||
Long term investments | 276,762 | 278,525 | 39,423 | ||||
Other non-current assets (iv) | - | 45,000 | 6,369 | ||||
Right-of-use assets, net (v) | 34,466 | 57,254 | 8,104 | ||||
Total non-current assets | 408,466 | 447,128 | 63,287 | ||||
Total assets | 2,647,331 | 2,081,812 | 294,662 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | |||||||
Current liabilities | |||||||
Short-term borrowings and current portion of long- term borrowings | 119,069 | 50,919 | 7,207 | ||||
Accounts payable | 132,357 | 113,464 | 16,060 | ||||
Guarantee liabilities, current (vi) | 910,949 | 462,322 | 65,437 | ||||
Deposit of interests from consumers and payable to financing partners | 25,968 | 11,103 | 1,572 | ||||
Advance from buyers collected on behalf of sellers | 110,493 | 105,303 | 14,905 | ||||
Other payables and accruals | 1,175,914 | 879,541 | 124,491 | ||||
Deferred revenue | 50,348 | 46,941 | 6,644 | ||||
Convertible notes, current (vii) | 375,449 | 386,360 | 54,686 | ||||
Amounts due to related parties (viii) | - | 9,434 | 1,335 | ||||
Operating lease liabilities, current | 32,842 | 8,479 | 1,200 | ||||
Liabilities held for sale (ix) | 143,009 | - | - | ||||
Total current liabilities | 3,076,398 | 2,073,866 | 293,537 | ||||
Non-current liabilities | |||||||
Long-term borrowings | 234,585 | 233,000 | 32,979 | ||||
Convertible bonds, non-current | 1,679,130 | 1,693,026 | 239,632 | ||||
Operating lease liabilities, non-current (v) | 1,865 | 44,451 | 6,292 | ||||
Guarantee liabilities, non-current (vi) | - | 241,758 | 34,219 | ||||
Total non-current liabilities | 1,915,580 | 2,212,235 | 313,122 | ||||
Total liabilities | 4,991,978 | 4,286,101 | 606,659 | ||||
Shareholders’ deficit | |||||||
Ordinary shares | 581 | 581 | 82 | ||||
Additional paid-in capital | 13,036,989 | 13,032,316 | 1,844,605 | ||||
Accumulated other comprehensive income | 106,764 | 108,451 | 15,350 | ||||
Accumulated deficit | (15,488,827 | ) | (15,345,478 | ) | (2,172,011 | ) | |
Total Uxin’s shareholders’ deficit | (2,344,493 | ) | (2,204,130 | ) | (311,974 | ) | |
Non-controlling interests | (154 | ) | (159 | ) | (23 | ) | |
Total shareholders’ deficit | (2,344,647 | ) | (2,204,289 | ) | (311,997 | ) | |
Total liabilities and shareholders’ deficit | 2,647,331 | 2,081,812 | 294,662 | ||||
- | - | - | |||||
(i) Amounts due from related parties mainly represented the consideration receivables from | |||||||
(ii) Other receivables mainly included the remaining consideration receivable of | |||||||
(iii) Pursuant to the supplemental agreements we entered into with | |||||||
(iv) Other non-current assets represented our prepayment for financial solution advisory services. We entered into a long-term strategic cooperation agreement with | |||||||
(v) It mainly represented a 5-year lease agreement for our headquarters office building in | |||||||
(vi) We entered into the first supplemental agreement with WeBank in | |||||||
(vii) All short-term convertible notes were converted into 136,279,973 Class A ordinary shares on | |||||||
(viii) Amounts due to related parties mainly represented the advertising and marketing expenses payable to | |||||||
(ix) Liabilities held for sales were related to the divestiture of our B2B online used car auction business. The divestiture was completed in | |||||||
* Share-based compensation expenses from continuing operations are as follows: | |||||||
For the three months ended | |||||||
2019 | 2020 | ||||||
RMB | RMB | US$ | |||||
Cost of revenues | - | 2,142 | 303 | ||||
Sales and marketing | - | 5,056 | 716 | ||||
General and administrative | 26,767 | (10,752 | ) | (1,522 | ) | ||
Research and development | 309 | (1,121 | ) | (159 | ) | ||
Unaudited Reconciliations of GAAP And Non-GAAP from Continuing Operation Results | |||||||
(In thousands except for number of shares and per share data) | |||||||
For the three months ended | |||||||
2019 | 2020 | ||||||
RMB | RMB | US$ | |||||
Loss from continuing operations | (223,178 | ) | (128,363 | ) | (18,169 | ) | |
Add: Share-based compensation expenses | 27,076 | (4,675 | ) | (662 | ) | ||
- Cost of revenues | - | 2,142 | 303 | ||||
- Sales and marketing | - | 5,056 | 716 | ||||
- General and administrative | 26,767 | (10,752 | ) | (1,522 | ) | ||
- Research and development | 309 | (1,121 | ) | (159 | ) | ||
Non-GAAP adjusted loss from continuing operations | (196,102 | ) | (133,038 | ) | (18,831 | ) | |
For the three months ended | |||||||
2019 | 2020 | ||||||
RMB | RMB | US$ | |||||
Net loss from continuing operations | (240,805 | ) | (152,400 | ) | (21,571 | ) | |
Add: Share-based compensation expenses | 27,076 | (4,675 | ) | (662 | ) | ||
- Cost of revenues | - | 2,142 | 303 | ||||
- Sales and marketing | - | 5,056 | 716 | ||||
- General and administrative | 26,767 | (10,752 | ) | (1,522 | ) | ||
- Research and development | 309 | (1,121 | ) | (159 | ) | ||
Non-GAAP adjusted net loss from continuing operations | (213,729 | ) | (157,075 | ) | (22,233 | ) | |
Non-GAAP adjusted net loss from continuing operations per share – basic | (0.24 | ) | (0.18 | ) | (0.02 | ) | |
Non-GAAP adjusted net loss from continuing operations per share – diluted | (0.24 | ) | (0.18 | ) | (0.02 | ) | |
Weighted average shares outstanding – basic | 882,761,118 | 891,184,665 | 891,184,665 | ||||
Weighted average shares outstanding – diluted | 882,761,118 | 1,179,129,118 | 1,179,129,118 | ||||
Note: The conversion of Renminbi (RMB) into | |||||||
Source:
2020 GlobeNewswire, Inc., source