Uxin Limited Group (UXIN.US) Q2 2026 Earnings Conference Call

CEO DK introduced the overall market trends for the auto sector in Q2 2026, highlighting a 20% YoY decline in domestic new car sales and a near 40% drop in ICE car sales. The used car market showed better resilience with only a 1.4% YoY decline, despite pressure from falling new car prices, leading to accelerated industry consolidation. Nearly 30,000 used car dealerships exited the market in H1, with an estimated 50,000-60,000 expected to leave by year-end.

CEO DK noted that Usen outperformed the market in Q2 with retail sales reaching 19,610 units, marking an 89% YoY and 19% QoQ growth. The company’s NPS remained at an industry-high of 68. Despite price fluctuations affecting gross profits temporarily, active inventory adjustments and fast vehicle clearances led to swift recovery in single-car profitability post-Q2. The company expects Q3 gross profit margins to return to over 6%.

CEO DK discussed Usen's focus on digitalization and systematic upgrades. Enhanced pricing systems led to improved accuracy, coverage, and response times. Operational efficiency saw significant improvements, reducing inventory turnover days from 30 to approximately 20 days.

CEO DK shared insights on the changing dynamics of the used car industry, predicting a shift from fragmented, non-standard operations to a more scalable, standardized, and digitized retail model. The coming years are expected to be crucial in redefining the market landscape, with Usen poised to maintain its leading position.

CEO DK provided a Q3 outlook, forecasting retail sales of 20,500-21,000 units, nearly 50% YoY growth. Gross profit margin is expected to recover to over 6%, driven by cautious inventory management and faster turnover.

CFO John Lin reported Q2 2026 financial performance, highlighting a total revenue of RMB 11.51 billion, a YoY growth of 75% and QoQ growth of 7%. Retail vehicle sales revenue reached RMB 1.08 billion, with an average selling price of RMB 55,000. Gross margin declined to -0.7% due to rapid fuel car price adjustments, but is expected to recover to over 6% in Q3.

CFO John provided updates on recent financing activities, highlighting a $4 million investment from Neo Capital and anticipated receipt of an additional $4 million at $2.86 per ADS, in line with the plan. Joy Capital is also advancing ODI filings for its investment in the company.

CEO DK explained the reduced inventory turnover from 30 to 20 days as a result of AI-driven optimization in key processes such as pricing, adjustments, and risk management, alongside the integration of end-to-end operational systems that enhance efficiency.

CEO DK discussed recent market pressures, including a 20% YoY drop in July and August passenger vehicle sales, and a 40% decline in ICE vehicles. While used car market prices stabilized in Q3, around 50,000-60,000 used car dealerships are expected to exit the market by the end of 2026.