Ladies and gentlemen, thank you for standing by and welcome to Uxin Earnings Call for the Fourth Quarter and Fiscal Year Ended March 31, 2022. 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'd now like to turn the call over to your host for today's conference call, Ms. Joyce Tang, IR Director of the company. Please go ahead, ma'am.

Thank you, operator. Hello, everyone. Welcome to Uxin's Earnings Conference Call for the quarter ended March 31, 2022. On the call today are DK, Founder and CEO, and John Lin, CFO. DK will review business operations and company highlights, followed by John, who will discuss financial and guidance. They will both be available to answer your questions during the Q&A session that follows. Before we start, I would like to remind you that this call may contain forward-looking statements made under the Safe Harbor Provision of the US Private Securities Litigation Reform Act of 1995. These statements are based on management's current knowledge and assumptions about future events that involve knowing or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. Uxin does undertake any obligations to update any forward-looking statements, except as required under applicable law. For more information about the potential risks and uncertainties, please refer to our filings with the SEC. With that, I will now turn the call over to our CEO, DK. Please go ahead.

[Foreign Language]

Hello everyone. Thank you for joining our earnings conference call today. To better communicate with both domestic and international investors, my clear remark today will still be in both English and Chinese. In the first quarter last year, I elaborated on our growth strategies and business model transformation in order to provide our customers a hassle-free use card purchase experience with massive high quality and valuable money vehicle connections, as well as superior before and after self-services. Having successfully transitioning from a third party commission based model to inventory-only model, we open here, IRC, our first vehicle inspection and reconditioning center, as well as a warehouse superstore. In the year 2022, we have continued in the same direction and remain committed to our mission of creating and industry-leading youth car buying experience is the customer centric approach is find the variety challenges we face, such as the research of COVID we've made significant progress in called to use car offering once what service Customer-centric experience and social responsibility. In fiscal year 2022, we achieved our business skills for the year. Total transaction volume for the year was 15,755 units. We're presenting a 49% year-over-year growth. Total retail transaction volume for the year was 5,111 units. Continue sequential growth momentum in our quarter of the year, total revenues were RMB1,464 billion representing a 149% year-over-year growth. Our Xi’an IRC’s operations were disrupted by COVID countermeasures in the fourth quarter, which is also the traditional used car off-season due to the Spring Festival holidays. However, we achieved a higher retail transaction volume as a result of the sales ramp-up in our Hefei IRC. While we still occasionally face COVID-related challenges, we are committed to executing our development plan and sustaining our growth momentum. After building our first IRC in Xi’an, we opened…

Okay. Thanks DK. Hello everyone. Thank you all for joining us today. I will walk you through some key financial results in the quarter and in the March 31, 2032, as well as the full fiscal year 2022. During the fourth quarter, despite the COVID and off season impact detail shared earlier, our total revenues were RMB507 million, pretty much the same level compared to the third quarter since the retail sales volume ramp up in the survey IRC. Specifically, our retail revenue were RMB319 million representing a 37% quarter-over-quarter growth and 156% year-over-year, driven by higher retail. As for overall fiscal year 2022, it was our first full year of operation under the inventory owning model. Driven by our continued sales growth momentum, our total transaction bottom was 15,755 units representing a 49% year-over-year growth and our total four year revenues were RMB1.6 billion, representing a 150% year-over-year growth. When we look at the gross margin of fourth quarter, as you can see in the three quarters, our gross margin was stable at around 4%. However, in the fourth quarter it fell to 0.2%. The reason was that the experience to see IRC lockdown for more than one month due to COVID and February was the traditional Chinese New Year off season. So used car transactions were almost a frozen for month. So we help to proactively restructure our inventories and accelerate the sales of the long age vehicles through pricing adjustments. The inventory management actions compressed our gross margin in the first quarter. As a result, the overall gross margin for fiscal year 2022 was 2.9%. We observe after the Chinese New Year clear upwards traveling in our retail sales, and we do expect our gross ghost margining to gradually return to a reasonable level in the following…

We will now begin the question-and-answer session. [Operator instructions] Our first question will come from Karl Birkenfeld with American Trust Investment Services. You may not go ahead.

Good evening, gentlemen. Congratulations on your outstanding financial performance in light of the circumstances with COVID. I am the Managing Director at American Trust and I have a coverage in China. I have two questions. The first is through our news media report in the United States, we know that China continues to keep COVID zero policy that restricts travel and lockdown, the potential of risk areas. What's the economic outlook in consumer sentiment, will this affect Uxin business going forward?

The implementation of COVID measures we will still have an impact, city-wide lockdown in particular will limit people's activities. We will certainly comply with all governments COVID prevention policies. In terms of our financial results, the disrupted operation of our CIRC, which intent affect our financial performance, the closure of our IRC during the lockdown capital hour, overall sales slow our inventory turnover and compress our growth margin in the fourth quarter of this year. However, this impact are temporary. This June, our business has fully recovered after China started COVID restriction and lifted Shanghai lockdown. That's the answer to this question. Thank you.

Great. Thank you very much. The second question is can you break down your vehicle acquisition by source and what are the differences between these channels in terms of cost, average prices and turnover?

Our acquisition mainly include individual car owners, auction companies and dealerships of new cars. This dealership partner with us rent their customers, trading their vehicle. Regarding the cost, our acquisition cost only consists of the vehicles purchase price, and there are no other causes in the acquisition process. Also there's no material difference in the averaging selling price and turn over between this acquisition office. However, purchasing directly from individual car owners simplifies acquisition process. So generating a higher growth margin, as such we highly value individual car owners as acquisition score, which contributed to our 30% of our total acquisition compared to 15%, the middle of the last year percentage to continue climbing going forward. That's the answer to the question. Thank you.

Our next question will come from [indiscernible] with TF Securities. You may now go ahead.

Repeat my question in English, in 2022, what optimization has the company made on the user side online platform? What is the company's current arrangement from purchase to delivery of the car? What technic upgrading and optimizations and has been made this year compared to 2021 about the online car buying platform, what kind of competitive advantages or diverse that the company has? Thank you.

We implemented several upgrades to the online purchase of our vehicle. One of this upgrades is the complete self-service online order and purchase process for customers. The process that not require any salesmen intervention and allows the customer to make a more independent and the right decision, they can then complete the transactions smoothly. Another example, as to operate the online display of our vehicle information; now customers can view each car with basic condition and rating as well as the vehicle conditions force that we implemented under the national standard. The display of this indicators enable customers to make a more comprehensive assessment of the vehicles online to form a purchase decision. In terms of the logistic and network, our delivery network now our 20 cities network, we also plan to gradually expand our network in the future. First our resource has higher quality as we have the highest centre for the repositioning. So we can have the lowest return rate in the industry. Secondly, after years of effort, we have built a robust system for vehicle delivery and local ownership registration. Our delivery efficiency is very high. Usually our customers can receive their vehicles around 72 hours after they place the order. Thirdly, all of our vehicles are self-owned. So we have better control of the vehicles and the transaction. That's answer to the question. Thank you.

Our next question will come from Yin Ying from China Securities. You may now go ahead.

Thank you, Yin Ying from China Securities. Given the electric vehicle sales have called out with gasoline cars, can you share more about your expansion plans in this market? Are the margins different from gasoline cars and how many new vehicle -- new energy vehicles do your customer have in your inventory?

Is the critical that we are focusing on and investing in. As you know gasoline Amy vehicles are built very differently. This is why in the past few months, we have established separate systems and since for the testing and maintaining of used new vehicles. From a market perspective, China's used EV market is directly tied to the overall of the used EV market is directly tied to the overall ownership. As again for 2021, China's passenger car ownership reached $300 million while EV ownership was around $8 million or less than 3% of the total. As of now, NEV accounted for 5% to 6% of our inventory. From a business perspective, our NEV offering are quite popular among customers. NEV is in our inventory also have a stronger sales performance. Additionally, we made cover. They're welcomed by consumers, such as Tesla, Leo, Lee Auto. In the industry, we are leading the industry in both self-capacity and self-performance of new energy use cars. Thank you for your question.

Thank you. We have reached the end of question-and-answer session. I would now like to hand the conference back over to Joyce for closing remarks.

Thank you for everyone joining our call today. We look forward to -- we look forward to see you next time, bye, bye.