Ladies and gentlemen, thank you for standing by, and welcome to Uxin's Earnings Conference Call for the quarter ended June 30, 2025. [Operator Instructions] Today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to your host for today's conference call, Ms. Ellie Wang. Please go ahead, Ellie.

Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the second quarter ended June 30, 2025. 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. Now with that, I will turn the call over to our CEO, D.K. Please go ahead, sir.

[interpreted] Hello, everyone, and thank you for joining our earnings conference call. To ensure smooth communication with both our domestic and international investors, I will share our latest updates in both Chinese and English. In the second quarter of 2025, we delivered another strong set of results. Retail transaction volume reached 10,385 units, up 154% year-over-year. This marks the fifth consecutive quarter with year-over-year growth above 140%, underscoring the strong and sustainable growth potential of our model. Inventory turnover also remained healthy at roughly 30 days, reflecting our efficient operations and a balanced inventory structure. On customer satisfaction, our Net Promoter Score was 65 this quarter, maintaining the highest level in the industry for 5 consecutive quarters. Over the past few years, we have built a standardized management and operating system in our flagship superstores in Xi'an and Hefei. This framework enables new locations to ramp quickly and efficiently. Our Wuhan superstore, which opened at the end of February, has performed well above expectations in both business ramp-up and operational maturity. The one-stop used car experience offered by our large-scale superstore model has been warmly received by local consumers, starting with an initial retail inventory of 250 units in March. So Wuhan store has consistently sustained approximately 30-day inventory turnovers. By September, the store's retail transaction volume is expected to reach around 1,400 as this momentum continues to build. On the sourcing side, our capabilities have been thoroughly tested and proven. We have integrated diverse vehicle acquisition channels, improved pricing precision and ensured smooth operations at our reconditioning facilities. Together, these strengths provide a stable, sufficient vehicle supply. As such, profitability at the Wuhan store is improving quickly alongside its rapid sales growth. Compared with our superstores in Xi'an and Hefei, start-up losses in Wuhan have been meaningfully smaller. At…

[interpreted] Thank you, D.K. Hello, everyone. Since we have both domestic and international investors participating today, we will continue to present the company's performance in both Chinese and English to better communicate with all of you. In the second quarter, our retail transaction volume reached 10,385 units representing a 154% increase year-over-year and a 38% increase quarter-over-quarter, demonstrating that our retail business remains firmly on a path of rapid growth. Retail revenue for the quarter totaled RMB 610 million, up 87% year-over-year and 31% quarter-over-quarter. The average selling price or ASP for retail vehicles was RMB 59,000 compared to RMB 62,000 in the prior quarter and RMB 79,000 in the same period last year. While ASP declined as we shifted toward a more affordable inventory mix, the strong growth in transaction volume more than offset the pricing impact and drove our 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. Turning to our wholesale business. Our wholesale transaction volume was 1,221 units in the second quarter, representing a 19% decrease year-over-year but a 70% increase quarter-over-quarter. Total wholesale revenue was RMB 29.9 million. Combining both retail and wholesale, total revenue for the quarter reached RMB 658 million, representing a 64% increase year-over-year and a 31% increase quarter-over-quarter. Gross margin for the quarter was 5.2%, down 1.2 percentage points from 6.4% a year ago, and down 1.8 percentage points from 7% in the prior quarter. This decline was primarily due to the price war in the new car segment, which has exerted margin pressure on the used car market as well as the early stage ramp-up of our Wuhan superstore, which opened in February and is still in the process of scaling its profitability. However, we do not expect these factors to impact gross margin in the third quarter, and we anticipate being a rebound to around 7.5%. The increase in operating expenses this quarter was primarily related to the initial ramp-up of our Wuhan superstore, including investments in staffing and infrastructure. As a result, our adjusted EBITDA loss for the quarter was RMB 16.5 million, representing a substantial 51% reduction year-over-year. Looking ahead to the third quarter of 2025, we expect retail transaction volume to be in the range of 13,500 to 14,000 units, representing year-over-year growth of over 130%. Total revenue is expected to be between RMB 830 million and RMB 860 million with gross margin recovering to approximately 7.5%. That concludes our prepared remarks for today. Thank you, everyone. Operator, we're now ready to begin the Q&A session.

[Operator Instructions] And our first question today will come from Fei Dai of TF Securities.

Congratulations on the company's strong sales momentum and continued high growth trajectory. With new superstores opening at such rapid pace, how do you balance short-term profitability pressures with your expansion needs? Will you need additional financing?

[interpreted] Thank you for your question. Let me take this one. The rapid rollout and ramp-up of our new superstores significantly strengthened our market presence in the cities where we expand and also help us build out a nationwide sales network. This carries major strategic importance for us. Now on balancing profitability with extension fee, I want to emphasize that we will never pursue extension blindly. Every new superstore is carefully planned, both from a business and financial perspective. That said, once a new store begins operation, there will be some short-term profitability pressure. To mitigate this, we are focused on raising the level of standardization and high-quality replication across stores. By further upgrading our digital management systems and improving organizational efficiency, we can reduce early-stage cost pressure and losses and accelerate the time to break even. From a financial perspective, opening a new superstore requires about USD 8 million to USD 10 million, of which roughly $2 million is allocated to factory equipment and store preparation with the rest mainly for inventory buildup. Under our current operating model, it typically takes two to three years for a new superstore to reach breakeven and then maturity. Once matured, each store can generate enough profit to support the launch of another new store. Since our number of mature stores is still limited, we do plan to rely on measured incremental equity financing to support rapid expansion over the next two to three years. Given that our business has consistently delivered over 100% year-over-year growth and that we are seeing early signs of recovery in capital markets, we are not overly concerned about funding. We are confident in our ability to raise sufficient capital in line with our expansion plan.

[Operator Instructions] Our next question today will come from Wenjie Dai of SWS Research.

The management mentioned earlier that the Wuhan superstore has ramped up very successfully much faster than Hefei and Xi'an. Could you share what differentiation measures were taken in Wuhan?

[interpreted] Sure. Thank you for the question. This is D.K. I'll take this one. In addition to being the CEO of the company, I'm also the General Manager of the Wuhan superstore, so I personally experienced the entire journey from preparation to selling our first car to achieving today's results. I'd summarize the reasons in three areas. First, our digital business management system has been refined over more than four years of operations at the Xi'an and Hefei superstores. It is now highly mature and capable of being replicated quickly. These digital capabilities also benefit from a self-reinforcing flywheel effect, take our intelligent pricing system, for example, as powered by a vast database of real transaction data, something you can only truly accumulate if you're directly engaged in buying and selling vehicles yourselves. The more transactions we do, the more accurate our pricing becomes which in turn improves efficiency in both sourcing and sales. Thanks to the training of our Xi'an and Hefei data, this system has adapted very effectively in the Wuhan market. Second, our business processes are now fully standardized and our organizational and talent development systems are increasingly well established. The management team at Wuhan brought rich experience, which helped avoid repeating unnecessary mistakes, thereby accelerating both production and sales execution. At the same time, the talent development cycle continues to shorten. Typically within 1 to 2 years of operations, each superstore is able to develop one to two new management teams to support future expansions. That's my answer. We are confident that as we open more superstores, each new location will build upon the proven experience of earlier ones, making operations smoother and more efficient over time.

Zhengzhou, our new superstar, you've just opened. How does management view the competitive landscape in Zhengzhou? Can the success in Wuhan be replicated there and the other new superstores?

[interpreted] The competitive environment in Zhengzhou is indeed intense. There are a number of dealers there with relatively advanced operating practices and some dealers have inventories of more than 500 vehicles. At the same time, Zhengzhou is a much larger market with a population of over 13 million and more than 5 million registered vehicles and is one of the most active used car trading hubs in China. Currently, players in the market adopt different business models and target different positioning, our superstore model stands out with broader selection, better value for money, higher quality assurance and a more convenient one-stop service experience. On the customer side, for every 100 customer groups visiting the store, over 40% results in a purchase. That shows our business model with a strong omnichannel control, offers clear differentiation and resonates well with our target customers. We will continue to analyze the Zhengzhou market carefully and prepare thoroughly to compete. With our mature business processes and digital systems, we are confident that Zhengzhou can also achieve strong results. Looking further ahead, the cities we're targeting for extension are all among the top 20 in China by vehicle ownerships, which provides very favorable market conditions. So we are confident that the success of Wuhan can be replicated in Zhengzhou and in our future new superstores. That's my answer. Thank you.

At this time, we will conclude our question-and-answer session. I would like to turn the conference back over to Ellie Wang for 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.

Okay. Bye-bye.

The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.