Ladies and gentlemen, thank you for standing by, and welcome to Uxin's Earnings Conference Call for the quarter ended December 31, 2025. [Operator Instructions] 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 Wang ]. Please go ahead, [ Ali ].

Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the fourth quarter and full year ended December 31, 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] 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. 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% to 15% level typically seen in more mature markets. As such percentage rises towards that level, annual used car transaction volume could reach 35 million to 50 million units based on current vehicle ownership alone. 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 and vehicle conditions, fare pricing, professional service and reliable after-sales support. We believe that in the 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. Against this backdrop, Uxin is redefining used car transactions through a modern retail approach. We leveraged our advanced self-operated reconditioning factory to ensure vehicle quality and provide a one-stop purchasing experience and comprehensive after-sales support through our off-line superstores and online marketplace. As a result, buying and selling used cars could become a simple, transparent and trustworthy as purchasing standardized retail products. In 2025, despite continued intense price competition in the new car market, which…

[Interpreted] Thank you, D.K., and hello, everyone. I will now share an update on our financial performance. 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 recorded 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. 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. 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. 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…

[Operator Instructions] The first question today comes from Dai Wenjie with SWS.

[Interpreted] 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. So as you plan to open 4 to 6 new superstores in this year, how should we think about the gross margin going into 2026 and ASP? Could management share your latest view on used car pricing trends this year? Are you starting to see some signs of stabilization?

[Interpreted] Thank you for the question. Let me take this one. Okay. It's John. 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 6 to 9 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. 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%. 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're seeing a similar trend in our own operating data. Our retail ASP increased sequentially for 2 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. In addition, due to factors such as rising raw material costs, the phaseout 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 3 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. That's my answer. Thank you.

The next question comes from Fei Dai with TF Securities.

[Interpreted] 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 for the question. Let me address your question. Customer acquisition for new superstores mainly comes from 3 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. 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. Third, we also partnered 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. As the new stores continue to operate and mature in local markets, the cities where our superstores are located to gradually become destination markets for car purchases and walking traffic increases over time. At the same time, as transaction volume scales up, customer distraction and brand reputation continue to build. And referrals from existing customers also increased, further improving conversion and creating a positive customer acquisition cycle. Service quality and customer experience continues to increase, and our customer acquisition costs continue to decline. That's my answer. Thank you. .

The next question comes from [ Shinjing Li ] with China Merchant Securities.

[Interpreted] 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 stores do you think you can ultimately roll out over time?

Thank you for the question. Let me take this one. As of the end of 2025, we had 5 superstores in operation. In March this year, we opened a new superstore in Tianjin. We expect to open 4 to 6 superstores in 2026 with a goal of having more than 10 stores in operation by the end of 2026. 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. And on top of this large base, there are many cities that are well suited for deploying Uxin's 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. At a high level, for a city with vehicle ownership of 500,000, we believe it can support Uxin superstore with around 1,000 units of inventory, assuming 10% to 15% of vehicle ownership is transacted as used cars annually, such a city would generate annual used car transactions of approximately 50,000 to 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. Applying this framework today, there are more than 30 cities in China with vehicle ownership exceeding 3 million, which can support super stores with over 5,000 units of inventory. There are more than 70 cities with vehicle ownership exceeding 1 million, which can support superstores with over 2,000 units of inventory. In addition, there are more than 100 cities with vehicle ownership exceeding 500,000, which can support superstores 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 3 million units. Thank you. That was my answer.

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 has now concluded. Thank you for attending today's presentation. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]