UXIN

Ladies and gentlemen, thank you for standing by, and welcome to Uxin's earnings conference call for the quarter ended March 31st, 2026. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host for today's conference call, Ms. Ali Wong. Please go ahead, Ali.

Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the first quarter ended March 31st, 2026. On the call with me today, we have D.K., our founder and CEO, and John Lin, our CFO. D.K. will review business operations and company highlights, followed by John, who will discuss financials and guidance.

They will both be available to answer your questions during the Q&A session that follows. Before we proceed, I would like to remind you that this call may contain forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC. With that, I'll turn the call over to our CEO, D.K. Please go ahead, sir.

[Non-English content]

Hello, everyone, and thank you for joining Uxin's earnings conference call today. It is a pleasure to reconnect with our investors through this call, and we appreciate your continued interest and support. To better facilitate communication with both our domestic and international investors, I will be sharing our latest business updates in both Chinese and English.

[Non-English content]

In the first quarter of 2026, our business continued its strong growth momentum. Despite the seasonal impact of the Chinese New Year holiday on used car sales, retail transaction volume reached 16,530 units, representing a 119% year-over-year increase. This marks the eighth consecutive quarter in which our retail transaction volume grew by more than 110% year-over-year. While sustaining rapid sales growth, we maintained inventory turnover at approximately 30 days, and gross margin was 7.7%, remaining stable overall compared with the previous quarter. Our net promoter score further improved to 68 during the quarter and remained above 65, continuing to rank among the highest in the industry.

[Non-English content]

The recent developments in China's automotive market have attracted considerable attention from investors, and I would like to share some of my observations. Since the beginning of 2026, China's auto market has indeed experienced a slowdown. Cumulative new vehicle sales declined by 20% year-over-year during the first five months, with internal combustion engine or ICE vehicle sales facing even greater pressure. In both April and May, new ICE vehicle sales fell by more than 35% year-over-year.

The used car market also saw significant price adjustments starting in April, with prices of mainstream used ICE vehicles declining by 10%-15% within one to two months. Under such market conditions, used car retailers must meet much higher requirements in pricing, inventory turnover, capital efficiency, and risk management.

[Non-English content]

Although declining vehicle prices have created short-term pressure on profitability, China's used car market still achieved a modest 2% increase in transaction volume during the first five months of the year, significantly outperforming the new vehicle market. Consumer acceptance of used cars in China continues to improve. In particular, following fluctuations in new car pricing and the rapid adjustment in residual values of ICE vehicles, high value for money used vehicles are expected to become even more attractive to consumers.

[Non-English content]

Looking at a longer term perspective, the United States experienced a similar cycle during the global financial crisis from 2007-2009. Cumulative new vehicle sales declined by roughly 35% during that period, and many new car dealerships and used car retailers went out of business. However, leading independent used car retailers emerged stronger from the downturn, delivering years of sustained growth in sales volume, profitability, and market share.

[Non-English content]

Therefore, we believe that industry adjustments often lead to a reshaping of the competitive landscape. Once the current volatility in China's automotive market eases, the country's large vehicle ownership base, the still low level of used car transactions relative to vehicle ownership compared with developed markets, and consumers' growing demand for affordable, high-quality vehicles will continue to support the long-term growth of the used car industry. We are highly confident that our superstore model, built over the past several years on disciplined inventory turnover, stringent quality control, and superior customer service, will further strengthen our competitive advantages during this period of industry adjustment, and position Uxin to emerge as the biggest winner from the transformation of China's used car retail industry.

[Non-English content]

In addition, our Tianjin superstore officially commenced operations in March. As our first project in North China, the superstore can accommodate more than 3,000 vehicles for display and sales. With the opening of the Tianjin superstore, we now operate six superstores nationwide. Furthermore, we recently announced strategic partnerships with the municipal governments of Chongqing and Shijiazhuang to jointly invest in and operate used car superstores. As our nationwide superstore network continues to expand, we expect our service coverage, regional synergy, and brand influence to further strengthen, reinforcing our leadership in China's used car retail market.

[Non-English content]

Looking ahead to the second quarter, we expect retail transaction volume to exceed 18,000 units, continuing our strong growth trajectory. At the same time, we reaffirm our target of achieving more than 100% year-over-year growth in retail transaction volume for the full year of 2026.

[Non-English content] John, please.

With that, I'll turn the call over to our CFO to walk you through the financial results. John, please.

Thank you D.K. [Non-English content]

Thank you D.K., and hello everyone. I will now walk you through our financial results for the quarter.

[Non-English content]

The first quarter is traditionally a slower season for used car sales due to the Chinese New Year holiday. Nevertheless, our business continued to deliver strong performance during the quarter. Retail transaction volume reached 16,530 units, representing a 119% year-over-year increase. Sales volume at our existing superstores continued to ramp up while new superstores gradually commenced operations. We expect our retail transaction volume to maintain a strong growth trajectory over the coming quarters.

[Non-English content]

Retail vehicle sales revenue totaled RMB 1.01 billion, up 118% year-over-year and down 10% sequentially. The significant increase in retail transaction volume was the primary driver of the year-over-year growth in retail revenue. The average selling price, or ASP, of retail vehicles was RMB 61,000, compared with RMB 59,000 in the previous quarter and RMB 62,000 in the same period last year, remaining generally stable.

[Non-English content]

Turning to our wholesale business. Our wholesale transaction volume was 1,681 units in the first quarter, representing a 134% year-over-year increase and a 32% decline sequentially. Total wholesale revenue was RMB 27.9 million. Combining both retail and wholesale, total revenue for the quarter reached RMB 1.074 billion, up 113% year-over-year and down 10% sequentially.

[Non-English content]

Gross margin for the quarter was 7%, remaining at a relatively stable level. This represented a 0.2 percentage point increase from 6.8% in the prior quarter, and remained consistent with 7% a year ago. In general, newly opened superstores naturally operate at lower gross margin levels than our more mature locations. However, the larger sales contribution from our mature superstores offset this impact and helped maintain a stable overall gross margin.

[Non-English content]

Adjusted EBITDA loss for the quarter was RMB 34.3 million, compared with RMB 27.2 million in the previous quarter. The sequential increase was primarily attributable to the seasonal impact of the Chinese New Year holiday on sales volume. Compared with the same period last year, adjusted EBITDA loss increased by roughly RMB 25 million, mainly because our newly opened superstores are still in the early stages of ramping up operations, and we also made upfront investments in staffing to support our future superstore expansion plans.

[Non-English content]

Looking ahead to the second quarter of 2026, we expect retail transaction volume to be between 18,000 and 19,000 units, representing year-over-year growth of 73%-83%. We expect total revenue, including retail vehicle sales revenue, wholesale vehicle sales revenue, and other revenue to be between RMB 1.05 billion and RMB 1.1 billion.

[Non-English content]

That concludes our prepared remarks for today. Thank you everyone. Operator, we're now ready to begin the Q&A session.

Thank you. To ask a question, please press star then one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Today's first question comes from Bin Wang with Deutsche Bank. Please go ahead.

[Non-English content] My question is about the second quarter. So why suddenly in the second quarter you can probably start to decline and used car start to decline as well. Why second quarter, not the first quarter? Secondly, because you mentioned about the pressure in the second quarter, what's roughly gross margin change in the second quarter we have? Thank you.

[Non-English content]

Hi, this is John. I'll take your question. The overall vehicle sales volume in China from January to March is in line with our expectation. Since starting from April to May, ICE vehicles saw a 35% drop in sales volume. Used cars started to see a 10%-15% drop starting April. This is why we are seeing a drop in the second quarter.

[Non-English content]

Since April, we have seen rapid price adjustments in the new car market, particularly for ICE vehicles. This has also pressured gross margin across the used car industry. Under such volatile market conditions, we have become more cautious in our operations. We will prioritize healthy inventory turnover over short term gross margin optimization, and as a result, gross margin will face greater pressure in the second quarter.

[Non-English content]

If ICE vehicle prices continue to decline significantly from current levels, our gross margin will remain under pressure. However, based on what we have seen since early June, new car prices have generally stabilized. Given our fast inventory turnover, inventory affected by earlier price volatility is being gradually cleared. As a result, we expect gross margin to improve meaningfully in the third quarter and potentially return to normal levels.

[Non-English content]

That's my answer to your question. Thank you.

Thank you.

Thank you. Our next question today comes from Wenjie Dai with SWS Research. Please go ahead.

[Non-English content] OK. As we can see, the company has been accelerating its store, especially this year. Could the management rate how the operating performance of newly opened superstores compares with that of the Xi'an superstore when it first opened, specifically such as sales ramp, revenue growth, and profitability involved as the superstore model measured? Thank you.

[Non-English content]

Thank you for the question. This is John. I'll take your question. Xi'an was our first superstore, and officially commenced operations in December 2022. At that time, we were still building and validating the entire superstore operating model, including vehicle sourcing, pricing, reconditioning, inventory management, sales conversion and customer service. Now the Xi'an superstore is in a much more mature stage. Last year, its monthly retail transaction volume peaked at 2,700 units, representing roughly 25% local market share, and it has already achieved profitability at the store level.

[Non-English content]

What we have clearly seen is that with several years of operating experience, the ramp-up periods for new superstores has become significantly shorter. Take Wuhan and Zhengzhou as examples. The Wuhan superstore opened in March 2025, and its monthly retail transaction volume exceeded 1,000 units within about six months. The Zhengzhou superstore opened in September 2025, and its monthly retail transaction volume surpassed 1,000 units in about four months. Zhengzhou is particularly encouraging because it's both a highly competitive and highly active used car market. Achieving that level of sales growth within such a short period demonstrates that our model is becoming increasingly scalable and replicable across different cities.

[Non-English content]

This improvement is driven by several factors. First, our procurement, pricing and inventory management systems have become much more mature, allowing us to establish the right inventory mix for each local market more quickly. Second, our sales and operations teams have become much more standardized, allowing new superstores to replicate operating practices that have already been proven successful. Third, as the Uxin brand continues to gain recognition, new superstores are able to attract customers and build trust much faster than in the early days. In addition, our site selection and project evaluation capabilities have improved significantly. We are also benefiting from the current real estate market environment, which helps us secure better locations for new superstores.

[Non-English content]

From a revenue perspective, faster sales ramp-up naturally drives faster revenue growth. From profitability perspective, new superstores still require upfront investments in facilities and staffing, so profitability typically lags sales growth. However, as sales volume scales up, inventory turnover stabilizes, gross margin increases, and operating efficiency improves, new superstores will gradually move closer to the performance levels of mature locations.

[Non-English content]

Overall, the Xi'an superstore proves that the single store model can achieve profitability, while the Wuhan and Zhengzhou superstores demonstrate that the model is becoming increasingly efficient to replicate across new markets. As we continue opening new superstores, we will closely monitor sales ramp-up, gross margin, inventory turnover, and store-level EBITDA to ensure that our expansion remains high quality and sustainable.

[Non-English content]

Thank you, that's my answer.

[Non-English content] Thank you.

Thank you. Our next question comes from Xingxing Li, or I'm sorry, Xingxing Li with CMS. Please go ahead.

[Non-English content] We notice the company has recently announced a number of strategic partnerships with local governments. Could you provide more color on your store opening plans for this year? If market conditions do not improve, would the company consider slowing down the pace of new store opening?

[Non-English content]

Thank you for your questions. This is D.K., I will take your questions. Regarding our expansion plan, we expect to open four to six new superstores in 2026. The Tianjin superstore officially commenced operations in March, and it is our first project in North China. We have also announced projects in Chongqing, Shijiazhuang, Yinchuan, Wuxi and Guangzhou. At the same time, we are in discussions with a number of other local governments across China regarding future cooperation opportunities. These projects are at different stages of development. Some are approaching trial operations, while others are still in the facility preparation, team building and inventory sourcing stages.

[Non-English content]

As for market conditions, we have certainly seen volatility in both new and used vehicle prices this year, which creates short term pressure across the industry. However, industry adjustments also tend to accelerate consolidation. For companies with strong inventory turnover, pricing capabilities, standardized reconditioning processes, and trusted customer service, periods like this can create opportunities to gain market share.

[Non-English content]

Therefore, we will not change our long term strategy of nationwide expansion because of short term market volatility. At the same time, we will remain flexible and disciplined in execution. If market conditions remain challenging, we may take a more conservative approach to the pace of new store openings, inventory ramp up, and operating expenses. Our priority will remain cash efficiency, inventory turnover, and store-level operating quality.

[Non-English content]

At this point, our plan to open four to six new super stores this year remains unchanged. Our target of achieving more than 100% year-over-year growth in retail transaction volume for 2026 also remains unchanged. We will continue to manage the rollout of each project based on market conditions and ensure that our expansion remains high quality and sustainable. Thank you.

[Non-English content]

That answers your question.

[Non-English content]

Thank you. Our next question today comes from George Zhao with TF Securities. Please go ahead.

[Non-English content] We have seen some growing divergence between the performance of the ICE vehicles and NEVs in the new car segments this year. Are you seeing a similar trend in used car sales?

[Non-English content]

Thank you for your question. This is D.K. I'll take your question. Overall, China's auto market has been under pressure this year. Taking May as an example, passenger vehicle sales declined by nearly 22% year-over-year. Within that, ICE vehicle sales fell by 39%, while NEV sales declined by 7.5%. While NEV sales also declined, the decline was much less severe than that of ICE vehicles. As a result, NEV retail penetration exceeded 60%.

[Non-English content]

The used car market is fundamentally built on vehicle ownership, and the supply of used cars is closely tied to the ownership structure. Based on what we have seen over the past several months and in the market today, used ICE vehicles have been affected primarily by pricing pressure. However, from an overall sales mix perspective, we have not seen a meaningful increase in the share of NEVs in the used car market. The reason is quite simple: NEVs still account for less than 15% of total vehicle ownership in China.

[Non-English content]

What really drives the used car market is pricing. Unlike the new car market, used cars can continuously adjust their prices to restore their value proposition for consumers. In our view, the current market correction is actually a very important sign that China's auto market is becoming more mature. Used car prices have fallen sharply during this cycle, but in many ways, this adjustment represents a one-time reset in residual value. The residual value of a three-year-old used vehicle in China, measured against current new vehicle prices, used to be around 68%-72%. Today, that figure has declined to roughly 58%-60%, down 10 percentage, bringing it much closer to levels seen in mature markets such as the United States, Europe, and Japan.

[Non-English content]

Globally, for used cars to fully demonstrate their value for money advantage, residual values need to return to more reasonable levels. Once this pricing adjustment is completed, we expect not only more trade-ins for new vehicles, but also a growing number of used for used replacement purchases. Most vehicle purchases driven by practical needs will be satisfied by used cars, and China's used car market will move closer to the supply and demand dynamics seen in mature markets.

[Non-English content]

That's my answer to your question. Thank you.

Thank you. That concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

Thank you again for joining today's call and for your continued support in Uxin. We look forward to speaking to you again soon in the future.

Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Ladies and gentlemen, thank you for standing by. Welcome to Uxin's Earnings Conference Call for the Quarter Ended December 31st, 2025. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to your host for today's conference call, Ms. Allie Wang. Please go ahead, Allie.

Thank you, operator. Hello, everyone. Welcome to Uxin's Earnings Conference Call for the Fourth Quarter and Full-Year Ended December 31st, 2025. On the call with me today, we have DK, our Founder and CEO, and John Lin, our CFO. DK will review business operations and company highlights, followed by John, who will discuss financials and guidance. They will both be available to answer your questions during the Q&A session that follows. Before we proceed, I would like to remind you that this call may contain forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our filings with the SEC. Now, with that, I will turn the call over to our CEO, DK. Please go ahead, sir.

[Non-English content]

Good day to everyone, and thank you for your continued interest and support. It's a pleasure to welcome you on our earnings call today. To better communicate with our domestic and international investors, I will be discussing our performance over the last year, as well as providing insights into our prospects in both Chinese and English.

[Non-English content]

China's vehicle ownership has approached 370 million units, forming a large and growing base that continues to unlock significant potential for vehicle recirculation. In 2025, used car transaction volume in China exceeded 20 million units for the first time, accounting for approximately 5.5% of total vehicle ownership, well below the 10%-15% level typically seen in more mature markets. As this percentage rises towards that level, annual used car transaction volume could reach 35 million-50 million units, based on current vehicle ownership alone.

[Non-English content]

Consumer expectations for products, services, and overall experience in the used car industry continue to rise. We have observed that they are no longer satisfied with availability alone, and increasingly value transparency in vehicle conditions, fair pricing, professional service, and reliable after-sales support. We believe that in this trillion RMB market, which remains at an early stage of development, those who can systematically address these pain points will be well positioned to lead the transformation and upgrading of China's used car industry。

[Non-English content]

Against this backdrop, Uxin is redefining used car transactions through a modern retail approach. We leverage our advanced self-operated reconditioning factories to ensure vehicle quality and provide a one-stop purchasing experience and comprehensive after-sales support through our offline superstores and online marketplace. As a result, buying and selling used cars could become as simple, transparent, and trustworthy as purchasing standardized retail products。

[Non-English content]

In 2025, despite continued intense price competition in the new car market, which created challenges for the used car industry, our business maintained strong growth momentum. Our full-year retail transaction volume reached 51,110 units, up 135% year-over-year, marking the second consecutive year of more than 130% growth. Total revenues reached RMB 3.24 billion, representing a 79% increase year-over-year. Meanwhile, as both inventory and sales continued to scale up, our inventory turnover days for vehicles available for sale remained stable at approximately 30 days.

[Non-English content]

During the year, we also began large-scale replication and nationwide expansion of our super store model. Building on our existing super stores in Hefei and Xi'an, we opened three new super stores in Wuhan, Zhengzhou, and Jinan, establishing a scalable operating system that can be replicated across regions. Our mature super stores in Xi'an and Hefei continued to ramp up, each achieving over 20% market share in their respective cities. Wuhan, as the first replicated super store after our model had been validated, delivered stronger sales growth and profitability than our earlier super stores at the same stage. Zhengzhou and Jinan super stores further improved upon Wuhan's performance.

[Non-English content]

These achievements are supported by core capabilities that we have built over time and continue to strengthen. First, our pricing capability continues to evolve. We have accumulated the industry's largest set of real transaction data from our self-operated used car sales, and this data continues to grow, roughly doubling each year. This enables our pricing model to become increasingly precise. Our digital systems respond rapidly to market changes, allowing us to maintain real-time pricing competitiveness on both sourcing and sales. As a result, we are well positioned to navigate industry volatility and systematically improve vehicle-level profitability while sustaining high inventory and turnover efficiency.

[Non-English content]

Second, we have built an innovative integrated factory warehousing retail business model. Each of our superstores is supported by a used car reconditioning factory, forming China's largest, most advanced and most efficient supply system for high-quality used vehicles. We have established scalable advantages over traditional dealers in quality control, reconditioning, efficiency and cost optimization. Leveraging the reconditioning capabilities at our self-operated factories, we have expanded the used car service value chain and are able to provide full-lifecycle vehicle services including financing, insurance, extended warranties, accessories and repair and maintenance services similar to those offered by new car dealers. Compared with traditional used car dealers that primarily offer financing services, our revenue streams are more diversified with greater potential for profitability improvement.

[Non-English content]

Meanwhile, most of our superstores carry inventory of more than 2,000 vehicles and serves as a landmark used car retail destination in its local market. Landmark superstores help build customer trust. Through our in-store service, vehicle display and experience design, customers can enjoy a professional, transparent and trustworthy retail experience at our superstores. Our Net Promoter Score has reached 67, and customer satisfaction and brand reputation remain at industry-leading levels. We believe that our sales conversion efficiency, together with our ability to generate organic traffic through strong word of mouth, provides us with significant advantages over traditional used car dealers.

[Non-English content]

We clearly see that Uxin is advancing rapidly along a validated and continuously strengthening development path. Looking ahead to 2026, we will continue to increase inventory and sales across our existing five superstores, and we plan to open four to six additional superstores during the year, further strengthening our nationwide network. Based on these plans, we expect both our full-year retail transaction volume in 2026 and revenue to grow by more than 100%.

[Non-English content]

The modernization of China's used car industry has only just begun, and Uxin is positioned to benefit from a significant market opportunity. We also recognize that truly sustainable growth is not simply about speed, but is built on the coordinated improvement of scalability, operational efficiency, and customer value. We will remain focused on delivering better products and more professional services to our customers, while driving higher standards for solutions across the industry and creating long-term value for our shareholders.

[Non-English content]

Once again, thank you for your trust and support.

[Non-English content] John, please。

With that, I'd like to turn the call over to our CFO to walk you through the financial results. John, please.

[Non-English content]

Thank you, DK, and hello, everyone. I will now share an update on our financial performance.

[Non-English content]

We delivered another quarter of strong results in the fourth quarter of 2025. Retail transaction volume reached 19,160 units, representing a 37% sequential increase and a 124% increase year-over-year, significantly outperforming the overall China used car market, which reported a year-over-year growth rate of approximately 6% during the same period. This demonstrates that our retail business remains firmly on a path of rapid growth.

[Non-English content]

Total retail revenue for the quarter was RMB 1.129 billion, up 38% sequentially and 104% year-over-year. Our average selling price, or ASP for retail vehicles, decreased from RMB 65,000 in the same quarter last year to RMB 59,000 this quarter, but slightly increased from RMB 58,000 in the last quarter. While ASP declined as we shifted toward a more affordable inventory mix, the strong growth in transaction volume largely offset the pricing impact and supported overall revenue expansion. Our current inventory structure is well aligned with mainstream consumer demand, and we believe pricing has now stabilized at a rational level. As such, we expect ASP to remain relatively steady in the near term.

[Non-English content]

On the wholesale side, we sold 2,474 units in the fourth quarter, up 31% sequentially and 180% year-over-year. Wholesale revenue for the quarter was RMB 38.2 million. Combining retail and wholesale operations, total revenue for the fourth quarter was RMB 1.198 billion, representing a 36% sequential increase and a 101% year-over-year increase.

[Non-English content]

Our gross margin for the fourth quarter was 6.8%, down 0.7 percentage points from 7.5% in the last quarter. This was primarily due to promotional activities in the new car market during the fourth quarter, which put pressure on profitability across the used car industry. In addition, we opened a new superstore in Zhengzhou in September and another in Jinan in December. A newly opened superstore typically operate at lower gross margins during their early stages of ramp up.

[Non-English content]

Operating expenses also increased during the quarter, primarily due to the initial ramp-up of our new superstores, including investments in staffing and infrastructure. As a result, our Adjusted EBITDA loss was RMB 27.2 million.

[Non-English content]

Turning to our full-year 2025 results. Retail transaction volume totaled 51,110 units, representing a 135% year-over-year increase. Full-year retail revenue was RMB 3.021 billion, up 19% year-over-year. Total revenue reached RMB 3.24 billion, an increase of 79% year-over-year. In 2025, we opened three new super stores in Wuhan, Zhengzhou and Jinan, marking a new phase of rapid nationwide replication and expansion. These new super stores have ramped up more quickly than our earlier locations, continuing to drive growth in both our sales volume and overall financial performance.

[Non-English content]

Gross margin for the full-year was 6.7%, remaining stable compared with last year. Despite lower margins during the early ramp-up stages of newly opened superstores, this continued improvement in profitability from our mature superstores enabled us to maintain stable margins while expanding rapidly.

[Non-English content]

Turning to expenses as SG&A and R&D expenses totaled RMB 450 million, representing 13.9% of total revenue, a significant improvement from 24.3% last year, reflecting meaningful progress in cost control and operating leverage.

[Non-English content]

Adjusted EBITDA loss for the full-year was RMB 57.9 million, narrowing by 28% year-over-year. Adjusted EBITDA margin was -1.8%, an improvement of 2.7 percentage points from last year. We have disclosed additional details regarding our full-year financial performance and our recently published fourth quarter and annual results, so I will not repeat all the figures here.

[Non-English content]

Turning to our outlook for the first quarter of 2026. While the first quarter is traditionally a seasonally soft period for the used car industry due to the Chinese New Year holiday, we expect retail transaction volume to be between 16,200 units and 16,500 units, representing year-over-year growth of over 110%. Total revenue is expected to be between RMB 1.05 billion and RMB 1.07 billion.

[Non-English content]

Lastly, to reiterate Kun Dai's comments on our full-year outlook. In 2026, we plan to open fourt to six new superstores with sales volume and inventory continuing to ramp up at our existing superstores. Along with new store openings, we are confident in achieving over 100% year-over-year growth in both retail transaction volume and revenues in 2026.

[Non-English content]

This concludes our prepared remarks today. Operator, we're ready for question.

We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Dai Wenjie with SWS. Please go ahead.

Okay, thank you. Thank you for your comments. I'm Dai Wenjie. My first question is the company delivered another quarter of strong growth in both sales volume and revenue. Management also provide some color on the changes in gross margin. As you plan to open to 46 new superstores in this year, how should we think about the gross margin growing into 2026 and our ASP? Could Management share your latest view on used car pricing trends this year? Are you starting to see some signs of stabilization? Thank you.

[Non-English content]

[Non-English content]

Thank you for the question. Let me take this one.

[Non-English content]

Gross margin declined sequentially in the fourth quarter, mainly due to the ramp-up of newly opened superstores. We opened our Zhengzhou Superstore in September and our Jinan Superstore in December. During the initial ramp-up phase, we adopt a more competitive pricing strategy to drive traffic and establish market presence, resulting in a narrower spread between sourcing costs and selling prices compared to our mature stores. In addition, the penetration of value-added services also takes time to ramp up as our market share and brand recognition improve in these markets. It generally takes around six to nine months for new stores to reach the gross margin level of our mature stores. At the same time, our new car market experienced a slowdown in sales last December, and dealers stepped up promotional activities which put pressure on used car margins.

[Non-English content]

According to our operating data for the first quarter of 2026, we have already seen meaningful improvement in the gross margins of our newly opened superstores in Zhengzhou and Jinan. Overall gross margin has begun to recover compared to the fourth quarter of 2025, and we expect it to return to above 7%.

[Non-English content]

Regarding ASP, according to data from the China Automobile Dealers Association, the national average transaction price of used cars has started to recover since the fourth quarter of last year. We are seeing a similar trend in our own operating data. Our retail ASP increased sequentially for two consecutive quarters, reaching RMB 59,000 in the fourth quarter of 2025, and we expect it to exceed RMB 61,000 in the first quarter of 2026.

[Non-English content]

In addition, due to factors such as rising raw material costs, the phase-out of purchase tax incentives and government subsidies, as well as regulatory guidance aimed at reducing excessive price competition, we expect new car pricing to become more stable in 2026 compared with the past three years. More stable new car pricing will also support used car prices. As a result, we expect our retail ASP to show a stable to upward trend in 2026 compared with 2025. Given that we expect retail transaction volume to grow by over 100% year-over-year in 2026, revenue growth is expected to outpace transaction volume growth.

[Non-English content]

That's my answer. Thank you.

[Non-English content]

[Non-English content]

Thank you.

The next question comes from Fei Dai with TF Securities. Please go ahead.

[Non-English content]

I have a question on customer acquisition. How should we think about the customer acquisition channels for new superstores compared with your mature stores? Are there any key differences? Thank you.

[Non-English content]

Thank you for the question. Let me address your question. Customer acquisition for new superstores mainly comes from three channels. First, Uxin is a well-recognized brand in China's used car market. As a result, whenever we enter a new city, we already have a certain level of traffic accumulation on the Uxin used car app in that market. This is a key difference compared with many regional dealers. In other words, during the initial ramp-up phase of a new superstore, we are able to leverage our existing brand awareness and online traffic base to reactivate and reengage existing users, bringing in the first batch of users and leads into the new market.

[Non-English content]

Second, we typically carry out a series of marketing and PR campaigns around new superstore openings. In addition to targeted marketing on digital platforms, we also collaborate with local governments when launching new superstores. Local governments often provide promotional resources and local media support, which helps us quickly build awareness and reach potential customers in the new market.

[Non-English content]

Third, we also partner with vertical automotive platforms and media to capture traffic and leads from third-party channels. Given the competitiveness of our vehicle quality and pricing, we are able to achieve strong exposure and conversion on these platforms.

[Non-English content]

As the new stores continue to operate and mature in local markets, the cities where our superstores are located gradually become destination markets for car purchases and walk-in traffic increases over time. At the same time, as transaction volume scales up, customer satisfaction and brand reputation continue to build, and referrals from existing customers also increase, further improving conversion and creating a positive customer acquisition cycle.

[Non-English content]

Overall, as new superstores continue to mature, the proportion of traffic generated by our strong product offering, service quality and customer experience continues to increase, and our customer acquisition costs continue to decline.

[Non-English content]

That's my answer. Thank you.

[Non-English content]

The next question comes from Li Xinxin with China Merchants Securities. Please go ahead.

[Non-English content] Congratulations on entering a new phase of nationwide expansion. From a long-term perspective, could management share some color on your store expansion potential across China, and how many superstores you think you can automatically roll out over time?

[Non-English content]

Thank you for the question. Let me take this one. As of the end of 2025, we had five superstores in operation. In March this year, we opened a new superstore in Tianjin. We expect to open four to six superstores in 2026, with a goal of having more than 10 stores in operation by the end of 2026.

[Non-English content]

We are very confident in our long-term store expansion potential across China, primarily because of the sheer size of the used car market. China's vehicle ownership has already exceeded 350 million units. On top of this large base, there are many cities that are well suited for deploying Uxin large-scale used car superstores. Our assessment of store expansion potential is mainly based on the level of vehicle ownership in each city, as well as our target market share.

[Non-English content]

At a high level, for a city with vehicle ownership of 500,000, we believe it can support a Uxin superstore with around 1,000 units of inventory. Assuming 10%-15% of vehicle ownership is transacted as used cars annually, such a city would generate annual used car transactions of approximately 50,000-80,000 units. Based on the over 20% market share that our mature stores have already achieved, a Uxin superstore could achieve annual sales of over 10,000 units, which corresponds to an inventory level of around 1,000 units.

[Non-English content]

Applying the framework today there are more than 30 cities in China with vehicle ownership exceeding three million, which can support super stores with over 5,000 units of inventory. There are more than 70 cities with vehicle ownership exceeding one million, which can support super stores with over 2,000 units of inventory. In addition, there are more than 100 cities with vehicle ownership exceeding 500,000, which can support super stores with over 1,000 units of inventory. In the long run, we believe there are more than 200 cities across China where we can potentially operate, supporting annual retail transaction volume of over three million units. Thank you. That was my answer.

[Non-English content]

[Non-English content]

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you all for participating on today's conference call. We look forward to reporting to you soon.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.