BEIJING, June 10, 2019 (GLOBE NEWSWIRE) -- Uxin Limited (“Uxin” or the “Company”) (Nasdaq: UXIN), the largest used car e-commerce platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2019.

Changes in Certain Operational Metrics Disclosure
Starting from the first quarter of 2019, Uxin will only disclose the transaction volume and the corresponding GMV for the transactions which generate revenues, in order to better reflect the Company’s ability to enhance monetization and the development of its 2C cross-regional and intra-regional services. This new method of disclosure has been applied to the transaction volume, GMV and take rate calculations, as well as all the corresponding year-over-year comparisons discussed in this earnings release.

First Quarter 2019 Operational Highlights

First Quarter 2019 Financial Highlights

Mr. Kun Dai, Founder, Chairman and Chief Executive Officer of Uxin, said, “We are excited to start the year by delivering another strong quarter of growth with total revenues exceeding the high end of our guidance. More encouragingly, our 2C cross-regional business continued the robust growth momentum from the peak season in the fourth quarter, and recorded transaction volume of over 20,000 used cars in the first quarter, an increase of almost 50 times from the same period last year. The cross-regional business is playing an increasingly integral role in driving the overall growth of our 2C business and, in the first quarter of 2019, cross-regional transactions contributed 26% of total 2C transaction volume and 32% of total 2C revenues, with both percentages being only 1% in the same period last year.”

Mr. Dai added, “Over the past several years, we have continuously evolved Uxin’s business model to better meet consumer demand and have experienced rapid growth in both transaction volume and revenues. As we continue to expand our business, we will increase our focus on achieving more sustainable growth by implementing the following three initiatives. First, we will continue shifting our resources to the cross-regional business, where we see great market opportunities. In addition to targeting this significant growth potential, our strategic focus on cross-regional transactions will enable us to generate greater revenue and take us one step closer to profitability. Second, we will continue to improve our operational efficiency by taking a more rigorous approach to cost control and expense management. Third, we will adopt more stringent risk-control procedures and concentrate our resources on used car assets with better risk profiles. This will ensure that we build an even stronger foundation and improve cashflow. With our commitment to executing these strategic initiatives and continuing to enhance our value proposition, we are confident that we can extend our market leadership in China’s used car e-commerce sector and build a sustainable business over the long term.”

Mr. Zhen Zeng, Chief Financial Officer of Uxin, said, “We are pleased to see another quarter of rapid growth in our 2C business with the corresponding revenue increasing by 94% to RMB883 million in the first quarter. The growth of our cross-regional business far outpaced the overall 2C business, with related revenue increasing by 54 times year-over-year to RMB284 million. Moreover, benefiting from greater economies of scale and more effective cost control, gross margin improved to 70% from 66% in the same period a year ago. In addition, we continued to gain operating leverage during the quarter, which enabled us to cut adjusted net loss by over 50% year-over-year to RMB231 million, and significantly reduce adjusted net loss as a percentage of total revenues to 23% from 74% in the same period last year. Looking ahead, we will take more prudent measures to control costs and manage expenses, maximize the impact of every dollar we spend and continue to optimize operational efficiency. We are confident that this will drive sustainable growth, better position us to achieve profitability and create long-term value for our shareholders.”

First Quarter 2019 Financial Results

Total revenues increased to RMB1,003.9 million (US$149.1 million) in the first quarter of 2019, representing an increase of 54.6% from RMB649.4 million in the same period last year, primarily due to the increases in 2C transaction volume, GMV, transaction facilitation take rate2 and amount of loans facilitated.

2C Business: Revenue of the 2C business increased to RMB882.9 million (US$131.1 million) in the first quarter of 2019, representing an increase of 94.4% from RMB454.1 million in the same period last year.

2B Business:

Cost of revenues increased to RMB296.3 million (US$44.0 million) in the first quarter of 2019, representing an increase of 33.3% from RMB222.3 million in the same period last year, primarily due to the increase in costs of fulfillment, title transfer and registration which were correspondingly driven by the increase in the transaction volume, as well as the increase in salaries and benefits of employees engaged in car inspection, quality control, customer service and after-sales service.

Gross profit increased to RMB707.5 million (US$105.1 million) in the first quarter of 2019, representing an increase of 65.6% from RMB427.2 million in the same period last year. Gross margin increased to 70.5% in the first quarter of 2019 from 65.8% in the same period last year.

Total operating expenses were RMB968.8 million (US$143.9 million) in the first quarter of 2019. Total operating expenses excluding share-based compensation expenses were RMB915.0 million.

Loss from operations was RMB261.2 million (US$38.8 million) in the first quarter of 2019, a decrease from RMB452.9 million in the same period last year.

Non-GAAP adjusted loss from operations was RMB207.5 million (US$30.8 million) in the first quarter of 2019, a decrease from RMB450.5 million in the same period last year.

Fair value change of derivative liabilities was nil in the first quarter of 2019, compared to a loss of RMB359.1 million in the same period last year. The impact of derivative liabilities will no longer exist going forward as the preferred shares were converted into ordinary shares at the time of IPO.

Net loss was RMB285.0 million (US$42.3 million) in the first quarter of 2019, a decrease from RMB839.4 million in the same period last year. The narrowed net loss was primarily due to the Company’s greater operating leverage and a decrease in the loss from the fair value change of derivative liabilities.

Non-GAAP adjusted net loss, which excludes share-based compensation expenses of RMB53.7 million, was RMB231.3 million (US$34.3 million) in the first quarter of 2019, a decrease from RMB478.0 million in the same period last year.

As of March 31, 2019, the Company had cash and cash equivalents of RMB454.9 million (US$67.6 million), short-term investment in the form of other investment products of RMB597.5 million (US$88.7 million), and restricted cash of RMB2,025.4 million (US$300.8 million).

Recent Update
The Company recently entered into a convertible note purchase agreement with affiliates of 58.com, Warburg Pincus, TPG and certain other investors, pursuant to which Uxin will issue and sell convertible notes in an aggregate principal amount of US$230 million to the investors through a private placement. The transaction is expected to close soon. The Company and 58.com also have entered into strategic cooperation in areas including traffic and inventory acquisition, used-car inspections, big data analysis and SaaS.

Business Outlook
In order to achieve more sustainable growth, the Company will increase its focus on its core business and further expand 2C cross-regional services, adopt more rigorous measures to control costs and manage expenses to enhance operational efficiency, and take a more stringent approach to risk control to improve overall asset quality and cashflow.

Taking into account the effects of these measures, Uxin expects total revenues for the second quarter of 2019 to be in the range of RMB900 million to RMB950 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

1 M3+ delinquency rate is defined as the outstanding principal balance of used car loans that were 90 or more calendar days past due as a percentage of the sum of total outstanding principal balance of the used car loans facilitated through the Company’s 2C business (including the principal of loans it paid financing partners under its guarantee to financing partners) as of a specific date.
2 Take rate is measured by the revenue of the 2C/2B used car business divided by the GMV of the 2C/2B used car business.

Conference Call
The Company’s management will host an earnings conference call at 8:00 AM on June 10, 2019 U.S. Eastern Time (8:00 PM on June 10, 2019 Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

U.S.: +1 866 519 4004 or +1 845 675 0437
International: +65 6713 5090
Mainland China: 400 620 8038 or 800 819 0121 
Hong Kong: 800 906 601 or +852 3018 6771
Conference ID: 4478162

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.xin.com.

A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until June 25, 2019, by dialing the following telephone numbers:

U.S.: +1 646 254 3697
International: +61 2 8199 0299
Conference ID: 4478162

About Uxin
Uxin Limited (Nasdaq: UXIN) is the largest used car e-commerce platform in China. Uxin’s mission is to enable people to buy the car of their choice, no matter where they are located or what their budget is. Uxin enables consumers and dealers to buy and sell cars through an innovative integrated online and offline platform that addresses each step of the transaction and covers the entire value chain. Its online presence is bolstered by an offline network of more than 1,300 service centers in over 400 prefecture-level cities throughout China.

Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses a non-GAAP measure, adjusted loss from operations, adjusted net loss and adjusted net loss 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 operations excluding share-based compensation. The Company defines adjusted net loss as net (loss)/income excluding share-based compensation and fair value change of derivative liabilities. 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 enables the management to assess the Company’s operating results without considering the impact of share-based compensation and fair value change of derivative liabilities, which are non-cash charges. The Company also believes that the use of the non-GAAP measure facilitates investors' assessment of its operating performance. 

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 is that it does not reflect all items of income and expense that affect the Company’s operations. Share-based compensation and fair value change of derivative liabilities have 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 U.S. GAAP measure are included at the end of this press release.

Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader, except for those transaction amounts that were actually settled in U.S. dollars. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.7468 to US$1.00, representing the index rate as of the end of March 2019 stipulated by the People’s Bank of China. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

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. Uxin may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Uxin’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Uxin’s goal and strategies; its expansion plans; its future business development, financial condition and results of operations; Uxin’s expectations regarding demand for, and market acceptance of, its services; its ability to provide differentiated and superior customer experience, maintain and enhance customer trust in its platform, and assess and mitigate various risks, including credit; its expectations regarding maintaining and expanding its relationships with business partners, including financing partners; trends and competition in China’s used car e-commerce industry; the laws and regulations relating to Uxin’s industry; the general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Uxin’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Uxin does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor enquiries, please contact:
Nancy Song
Uxin Investor Relations
Tel: +86 10 5691-6765
Email: ir@xin.com

For media enquiries, please contact:
Yi-Ke Hong
Brunswick Group
Tel: +86 10 5960-8600
Email: uxin@brunswickgroup.com

 

     
Uxin Limited 
Unaudited Consolidated Statements of Comprehensive Loss
(In thousands except for number of shares and per share data)
     
 For the three months ended March 31,
 2018 2019
 RMB RMBUS$
Revenues    
To consumers (“2C”) – cross-regional  5,152     284,315    42,224  
- Transaction facilitation revenue  2,927    140,011   20,793 
- Loan facilitation revenue  2,225    144,304   21,431 
To consumers (“2C”) – intra-regional  448,941     598,537    88,889  
- Transaction facilitation revenue  92,208    168,433   25,014 
- Loan facilitation revenue  356,733    430,104   63,875 
To businesses (“2B”)  109,045     69,556    10,330  
- Transaction facilitation revenue  109,045    69,556   10,330 
Others  86,302    51,476   7,645 
Total revenues  649,440     1,003,884    149,088  
     
Cost of revenue  (222,286)   (296,348)  (44,011)
Gross profit  427,154     707,536    105,077  
     
Operating expenses    
Sales and marketing  (633,071)   (681,167)  (101,161)
General and administrative  (161,208)   (187,821)  (27,894)
Research and development  (68,063)   (79,956)  (11,874)
Losses from guarantee liability  (17,665)   (19,825)  (2,944)
Total operating expenses  (880,007)   (968,769)  (143,873)
     
Loss from operations  (452,853)   (261,233)  (38,796)
     
Interest expenses  (21,723)   (32,019)  (4,755)
Other (expenses)/income  (3,950)   17,070   2,535 
Foreign exchange gains/(losses)  1,225    (779)  (116)
Fair value change of derivative liabilities  (359,115)   -    -  
Loss before income tax expense  (836,416)   (276,961)  (41,132)
Income tax expense  (3,021)   (13,978)  (2,076)
Equity in gains of affiliates  -     5,956   885 
Net loss  (839,437)   (284,983)  (42,323)
     
Less: net loss attributable to non-controlling interests shareholders  (7,734)   (445)  (66)
Net loss attributable to UXIN LIMITED  (831,703)   (284,538)  (42,257)
Accretion on redeemable preferred shares  (157,539)   -    -  
Deemed dividend to preferred shareholders  (544,773)   -    -  
     
Net loss attributable to ordinary shareholders  (1,534,015)   (284,538)  (42,257)
     
Net loss  (839,437)   (284,983)  (42,323)
Foreign currency translation  12,135    6,027   895 
     
Total comprehensive loss  (827,302)   (278,956)  (41,428)
Less: total comprehensive loss attributable to non-controlling interests shareholders  (7,755)   (445)  (66)
Total comprehensive loss attributable to Uxin’s shareholders  (819,547)   (278,511)  (41,362)
     
Net loss attributable to ordinary shareholders  (1,534,015)   (284,538)  (42,257)
Weighted average shares outstanding – basic  49,318,860    881,704,014   881,704,014 
Weighted average shares outstanding – diluted  49,318,860    881,704,014   881,704,014 
Net loss per share – basic  (31.10)   (0.32)  (0.05)
Net loss per share – diluted  (31.10)   (0.32)  (0.05)


     
* Share-based compensation charges included are as follows: 
     
 For the three months ended March 31,
 2018 2019
 RMB RMBUS$
Cost of revenue-  - - 
Sales and marketing-  - - 
General and administrative(2,331) (53,170)(7,896)
Research and development-  (552)(82)
     


     
Uxin Limited
Unaudited Consolidated Balance Sheets 
(In thousands except for number of shares and per share data)
     
 As of December 31, As of March 31,
 2018 2019
RMB RMBUS$
ASSETS    
Current assets    
Cash and cash equivalents  800,997    454,890   67,556 
Restricted cash  2,013,030    2,025,382   300,792 
Accounts receivable  51,610    54,441   8,085 
Short-term investments  596,078    597,474   88,732 
Advance to consumers on behalf of financing partners  521,908    357,731   53,127 
Loan recognized as a result of payment under the guarantee, net  553,688    769,127   114,224 
Advance to sellers  692,714    665,915   98,896 
Other receivables, net  707,404    741,974   110,191 
Inventory  19,380    15,773   2,344 
Prepaid expenses and other current assets  417,314    316,268   46,969 
Financial lease receivables, net  294,511    166,862   24,781 
Total current assets  6,668,634     6,165,837    915,697  
     
Non-current assets    
Property, equipment and software, net  199,271    181,769   26,995 
Intangible assets, net  21,179    18,958   2,815 
Goodwill  110,424    110,424   16,399 
Long term investments  349,882    354,596   52,661 
Operating lease right-of-use assets, net (1)  -     267,709   39,758 
Total non-current assets  680,756     933,456    138,628  
     
Total assets  7,349,390     7,099,293    1,054,325  
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current liabilities    
Short-term borrowings  624,588    515,106   76,499 
Accounts payable  156,320    157,474   23,387 
Guarantee liabilities  321,255    426,432   63,330 
Deposit of interests from consumers and payable to financing partners – current  482,827    299,168   44,430 
Advance from buyers collected on behalf of sellers  375,803    204,141   30,317 
Other payables and accruals  1,197,300    1,395,648   207,269 
Deferred revenue  115,160    64,632   9,599 
Convertible bonds  1,188,192    1,165,737   173,125 
Operating lease liability, current (1)  -     62,281   9,249 
Total current liabilities  4,461,445     4,290,619    637,205  
     
Non-current liabilities    
Long-term borrowings  481,801    452,542   67,208 
Deposit of interests from consumers and payable to financing partners – non-current  29,742    21,903   3,253 
Deferred tax liabilities  4,759    4,278   635 
Operating lease liability, non-current (1)  -     183,529   27,256 
Total non-current liabilities  516,302     662,252    98,352  
     
Total liabilities  4,977,747     4,952,871    735,557  
     
Shareholders’ equity    
Ordinary shares  575    577   86 
Additional paid-in capital  12,967,986    13,021,718   1,933,871 
Accumulated other comprehensive income  86,061    92,088   13,676 
Accumulated equity  (10,680,489)   (10,965,027)  (1,628,429)
Total Uxin’s shareholders’ equity  2,374,133     2,149,356    319,204  
Non-controlling interests  (2,490)   (2,934)  (436)
Total shareholders' equity  2,371,643     2,146,422    318,768  
     
Total liabilities and shareholders’equity  7,349,390     7,099,293    1,054,325  
     
Note:    
(1) The Company adopted ASC 842 using the additional transition method with an effective date of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. No cumulative effect adjustment to the opening balance of retained earnings was required.


     
Uxin Limited
 
Unaudited Reconciliations of GAAP And Non-GAAP Results 
(In thousands except for number of shares and per share data)
     
     
 For the three months ended March 31,
2018 2019
RMB RMBUS$
Loss from operations  (452,853)   (261,233)  (38,796)
Add: Share-based compensation expenses  2,331     53,722    7,978  
-  Cost of revenue-    -    -  
-  Sales and marketing-    -    -  
-  General and administrative  2,331    53,170   7,896 
-  Research and development-    552   82 
     
Non-GAAP adjusted loss from operations(450,522) (207,511)(30,818)
     
 For the three months ended March 31,
2018 2019
RMB RMBUS$
Net loss(839,437) (284,983)(42,323)
     
Add: Share-based compensation expenses2,331   53,722  7,978  
- Cost of revenue-    -   - 
- Sales and marketing-    -   - 
- General and administrative2,331  53,170 7,896 
- Research and development-  552 82 
     
Fair value change of derivative liabilities359,115     -    -  
     
Non-GAAP adjusted net loss(477,991) (231,261)(34,345)
     
Non-GAAP adjusted net loss per share – basic(9.69) (0.26)(0.04)
Non-GAAP adjusted net loss per share – diluted(9.69) (0.26)(0.04)
Weighted average shares outstanding – basic 49,318,860  881,704,014 881,704,014 
Weighted average shares outstanding – diluted 49,318,860  881,704,014 881,704,014 
     
Note: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00 = RMB6.7335 as of the end of March 2019 stipulated by the People’s Bank of China.