Uxin's Q3 2025 Earnings Call: Emerging Contradictions on Superstore Breakeven Timelines, Inventory Strategies, and Capital Raise Plans

Date of Call: December 18, 2025

Financials Results

• Revenue: RMB 879 million, up 77% YOY and 34% QoQ (retail RMB 820M, wholesale RMB 33.2M; retail transactions 14,020 units, +134% YOY, +35% QoQ)
• Gross Margin: 7.5%, up 0.5 percentage points YOY (from 7%) and up 2.3 percentage points QoQ (from 5.2%); highest level in past 3 years

Guidance:

• Retail transaction volume for Q4 expected to exceed 18,500 units (>110% YoY)
• Total revenue for Q4 expected to exceed RMB 1.15 billion
• Full-year 2025 retail transactions expected to exceed 50,000 units (>130% YoY)
• Plan to open 4–6 additional superstores in 2026

Business Commentary:

* Retail Transaction Growth: - Uxin achieved 14,020 units in retail transaction volume in Q3 2025, a 134% year-over-year increase, marking the sixth consecutive quarter of growth above 130%. - The growth was driven by strong customer satisfaction, high inventory turnover, and expansion of the superstore network.

• Gross Margin Improvement:
• Uxin's gross margin reached 7.5% in Q3 2025, the highest level in the past 3 years, representing a 0.5 percentage point increase from the previous year and 2.3 percentage points from the prior quarter.

• The improvement was attributed to easing price competition in the new car segment, profitability ramp-up at the Wuhan Superstore, and improved pricing capabilities.

• Superstore Performance:

• Uxin's Wuhan and Zhengzhou superstores have shown rapid growth, with the former expecting nearly 1,800 retail units in December and the latter achieving approximately 900 retail units in December.

• This performance is due to Uxin's integrated logistics model, efficient pricing systems, and a focus on customer satisfaction, leading to faster ramp-up and better profitability control.

• Expansion and Strategic Partnerships:

• Uxin plans to open 4 to 6 additional superstores in 2026, marking a transition into a phase of accelerated nationwide expansion.
• The expansion is supported by strategic partnerships with local governments for investing in and operating new used car superstores, enhancing service coverage in Northern, Northwestern, and Southern China.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management stated they "continue to build strong growth momentum"; reported retail volumes +134% YOY and revenue +77% YOY; gross margin rose to 7.5% (3-year high) and CFO said adjusted EBITDA loss narrowed 43% YOY and 68% QoQ, while projecting strong Q4 and full-year targets.

Q&A:

• Question from Wenjie Dai (SWS Research Co., Ltd.): Congratulation and now we see gross margin reached 7.5% this quarter, 3 years high. How does management view the sustainability of the current margin level? And what factors could further drive margin improvement going forward?
  Response: Management said margin improvement is sustainable with further upside toward a ~10% target, driven by stabilized new-car pricing, improving data-driven pricing accuracy (fewer pricing errors) and higher penetration of value-added, higher-margin services.

• Question from Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division): Following the opening of the Zhengzhou Superstore, both sales and profitability ramp up seems to be faster than what we saw in Wuhan. Could management share what key initiatives drove this outperformance? And looking ahead, how long do you expect the newly opened superstores to take to reach stable operations?
  Response: Outperformance attributed to learnings from Wuhan (better execution) and stronger pricing from larger transaction data; management expects a standard superstore to breakeven in ~9 months and reach planned inventory capacity in ~18–24 months.

• Question from Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division): U.S. used car company, Carvana recently surpassed $100 billion market cap. Could management comment on the key similarities and difference between Carvana's model and Uxin's?
  Response: Key difference is sales channel—Uxin is offline-first (~70% offline, ~30% online) due to local consumer preferences; similarities include own-inventory model, large-scale reconditioning and focus on precise pricing; management expects to scale from ~50k to Carvana's ~500k annual volume within 4–5 years.

Contradiction Point 1

Breakeven Timeline for New Superstores

It involves differing expectations for the time it takes for new superstores to reach breakeven, which impacts financial performance projections and operational efficiency.

What key initiatives drove the faster sales and profitability growth compared to Wuhan, and how long will newly opened superstores take to stabilize operations? - Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division)

2025Q3: New superstores are expected to reach breakeven in about 9 months, with inventory capacity planned for approximately 18 to 24 months. - Unknown Executive

What is the timeline for the two new stores planned in Zhengzhou and Wuhan from construction to operation and individual store profitability? How will this impact the company's 2025 financial performance? - Fei Dai (TF Securities)

2025Q2: We expect these new stores to reach breakeven within 6 to 12 months after opening. - Feng Lin(CFO)

Contradiction Point 2

Breakeven Timeline for New Superstores

The timeline for new superstores to reach breakeven varies between the quarters, impacting financial projections and investor expectations.

What key initiatives drove faster sales and profitability growth at the Zhengzhou Superstore compared to Wuhan, and how long will it take for new superstores to reach stable operations? - Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division)

2025Q3: New superstores are expected to reach breakeven in about 9 months. - Unknown Executive

How do you balance short-term profitability with expansion needs given rapid superstore openings? Will additional financing be required? - Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division)

2025Q2: 2-3 years to reach breakeven. - Feng Lin(CFO)

Contradiction Point 3

Inventory Planning and Turnover Rates

It involves differing explanations of how the company balances inventory levels and turnover rates, which affects operational strategies and financial planning.

What key initiatives drove the faster sales and profitability growth compared to Wuhan, and how long will it take for new superstores to reach stable operations? - Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division)

2025Q3: Our inventory planning is tied to local car ownership levels and targeted market share. - Dai Kun(CEO)

How do you plan for inventory level caps in different cities? Will increased inventory reduce the 30-day turnover rate? How does the company balance inventory levels with turnover rates? - Fei Dai (TF Securities)

2025Q2: Since March, we have increased inventory levels, with sales growth outpacing inventory growth. This has led to an acceleration in inventory turnover, maintaining an approximate 30-day turnover rate. - Dai Kun(CEO)

Contradiction Point 4

Capital Raise Potential

There seems to be a shift in Uxin's approach to capital raising and expansion funding, which could influence the company's financial strategy and investor perception.

What is management's view on the sustainability of current gross margins, and what factors may drive future margin improvement? - Wenjie Dai (SWS Research Co., Ltd.)

2025Q3: Uxin remains confident in its ability to raise capital and support expansion plans. - Unknown Executive

How do you balance short-term profitability with rapid expansion? Will you need additional financing? - Fei Dai (Tianfeng Securities Brokerage Co., Ltd., Research Division)

2025Q2: The company seeks measured incremental equity financing over the next 2-3 years. - Feng Lin(CFO)

Contradiction Point 5

Inventory Expansion and Sales Growth Sustainability

It involves differing perspectives on the sustainability of sales growth and the role of inventory expansion, which are crucial factors for business performance and investor expectations.

How sustainable is the current gross margin level, and what factors could drive further margin improvement? - Wenjie Dai (SWS Research Co., Ltd.)

2025Q3: We expect our sales growth to remain robust. We are working to expand our inventory base. We expect to reach 1x to 2x the inventory base by the end of the year. - Unknown Executive

What factors are driving the strong retail sales growth? Is this growth rate sustainable? Given the low cash position, what are your financial management plans to support future growth? - Fei Dai (TF Securities)

2025Q1: We will continue to maintain our current pace of inventory expansion. This will likely result in a 1x to 2x increase in inventory levels by the end of the year, providing a solid foundation for supportive growth in the months ahead. - Feng Lin(CFO)