Ladies and gentlemen, thank you for standing by. And welcome to Uxin’s Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management prepared remarks, there will be a question-and-answer session. Today’s conference call is being recorded. If you have any objections you may disconnect at this time. I will now turn the call over to Nancy Song, Investor Relations Director of Uxin. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to Uxin third quarter 2018 conference call. Today, DK, our Founder and CEO; and Zhen Zeng, our CFO will discuss our financial results for the third quarter. Following the prepared remarks, Henry Tsai, our Head of Corporate Finance will join DK and Zhen to address any questions. Before we start, I’d like to remind you that our statements today will contain forward-looking statements that we make enter the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s current knowledge and assumptions about future events that involve risks and uncertainties, which could cause actual results to differ materially from our expectations. Uxin does not undertake any obligations to update any forward-looking statements, except as required under applicable laws. For more information about the potential risks and uncertainties, please refer to the company’s filings with the SEC. With that, I will now turn the call over to our CEO, DK please.

Thank you, Nancy. Hello, everyone. We are pleased to report another strong performance for the third quarter of 2018. Our focus on providing a broader selection of used car, digital transparency and a one-stop solution continues to translate into an outstanding user experience and a growing demand from both consumer and dealers. We again delivered our robust top-line growth with revenue up 60% year-over-year, which exceeded the high-end of our guidance. This reflects the increase in the transaction volume number of loans facilitated and the take rate during the quarter. Our 2C business remained the premium gross driver for the business. The revenue for our 2C business, including both transaction facilitation and the loan facilitation increased by 109% year-over-year. Transaction volume for our 2C business reached 129,000 used cars, up 53% year-over-year. This is equivalent to GMV of RMB10.2 billion. Our transaction facilitation take rate was 1.4% compared to 0.7% in Q3 last year. The increase reflects the strength of our brand and the pricing power as well as increasing traction of our service among users. As a result, our transaction facilitation revenue increased by 165% year-over-year during the quarter. Loan facilitation continued to important for consumer and increased together with the growth in volume and the transactions. The average service fee rate for loan facilitation increased to 6.9%, up from 6.1% a year ago with loan facilitation revenue growth by 96% year-over-year. The increase in service fee rate was mainly due to the ongoing diversification of our loan products. We also enhanced our risk management through NOIs of large volume of transaction and the user behavior data collected by our platform as well as enhancement in our pre- and post-financing management capability. This leads to an improvement in our M3+ delinquency rate to 1.43% as of the end of…

Well, thanks DK. Hello, everyone. Thanks for joining us. Now let me walk you through our financial performance in the third quarter of 2018. Note that all numbers are in RMB unless otherwise stated. Also please note that some numbers I refer to our non-GAAP. You can find a reconciliation of these numbers in our earning release. In the third quarter, total revenues increased by 50% to RMB864 million from RMB541 million in the third quarter of 2017. The increase was a primarily due to the increase in the transaction volume, amount of a loan facilitated and the take rate, particularly from our 2C business. Filing down to our 2C and 2B business units. 2C transaction facilitation revenue was RMB 139 million, an increase of 165% from RMB 52 million in the third quarter of 2017, primarily due to a 53% increase in the transaction volume and a 35% increase in GMV of used cars sold through our 2C business. Our 2C transaction facilitation take rate was 1.4% in the third quarter of 2018, up from 0.7% in the third quarter of 2017. 2C loan facilitation revenue increased by 96% to RMB 474 million, primarily driven by the increase in the volume and amount of loan facilitated. Our service fee rate was 6.9% during the quarter, up from 6.1% in the third quarter of 2017. The increase in service fee rate was primarily driven by the ongoing diversification of our loan product with more payment and the down payment options. The attach rate of the loan facilitation service remained relatively stable at around 46% in the quarter. In terms of our 2B business, our 2B transaction facilitation revenue reached RMB 191 million, representing an increase of 21% year-over-year, primarily due to the increase in take rate. Our take rate for…

Thank you, Mr. Zeng. Operator, please right now, open now the call for questions.

[Operator instructions] Our first question comes from Eddie Wong from Morgan Stanley. Please ask your question.

Thank you for taking my question and congratulations on the good results. So I have 3 questions. The first one is about the 2C business take rate. We have witnessed a quite impressive increasing trend of 2C take rate this year. Especially for the third quarter, take rate increased around 20 bps sequentially, while the volume growth was also higher than that of the year's second quarter. So will you please give more details about how you are managing to achieve this and how we could expect the take rate trend in the fourth quarter and onwards? This is my first question. And my second question is about the delinquency rate. The third quarter delinquency rate also improved 10 bps versus the second quarter. So also, I would like to management give more details about how we can achieve this and how is the trend in the next few quarters. On a separate note, I noticed that the restricted cash balance at third quarter-end, actually are quite similar at the -- versus the second quarter-end. So I'm just wonder if there is any -- I mean, the -- our auto finance partners have lowered their requirements in terms of the deposit as a percentage of the outstanding loan balance we facilitated. So basically which means that if there's any -- the more favorable terms from this -- our auto finance partners. This is second one. And the last question is about the overall market because we have noticed that the new car industry demand in the third quarter has been weak. So do you expect any impact from this weak demand to the used car industry in the short term? Although so far, I think our third quarter volume growth and fourth quarter guidance seems quite immune from this weak demand in China, but just want to hear your thoughts about any -- the -- thoughts of the weak new car auto demand, the impact to the used car industry? Thank you.

Okay. Thank you, Eddie. This is DK. And, all right, we get all three questions. I think I would like to take your question three first and then just -- okay. Is that okay? I turn into Chinese and Henry will help me to translate. Okay. [Foreign Language]

Sure. Thanks, Eddy. I think, number one, that was a great question. New cars obviously saw an impact on the broader economy in Q3 focused -- and with all new cars worldwide trend actually declined in 2018. Now obviously, as we look in our business in used cars, we feel that used car environment is a lot more constructive than new cars, especially when a lot of consumers are very focused on affordability, which actually plays to used car strength.

[Foreign Language]

And then in terms of our home business, we feel that our model is unique in a way whereby we are providing users with a great, new coverage of experience by moving people's buying behavior from offline to online. So that will actually accelerate our own growth. And also with our strength and scalability of business model, we continue to expand our market share. So we feel that not only is used cars more constructive than in broader new car environment, we will continue to outgrow the broader used car market as well.

Okay, Zhen Zeng.

Okay, Eddie, Michael here. So I would like to address your concern on take rate and delinquency rate and also the cash. So for the 2C take rate drivers in this quarter, our 2C transaction facilitation take rate was 1.4% compared to 0.7% in the same period last year. This is mainly because we have been enhancing our service capabilities to better cater to car buyers' different needs. This also demonstrates consumers' higher appreciation of Uxin's unique value proposition. That is, a broader car selection enabled by the cross-regional transactions and a better car condition and the price transparency and one-stop services. With this integrated offering, we have been able to gain greater pricing power while increasing scale. This also enables us to deliver more value to dealers as we help them increase inventory turnover efficiency. And for the loan, our service fee rate for our loan facilitation also increased to 6.9% in this quarter compared to 6.1% in the third quarter last year. This is mainly because we provided more diversification selection of loan products to meet various consumer needs and continue to optimize our loan product offering mix. And for the long run, we are confident that we can continue to increase our 2C take rate by adding more value-added service and optimizing our product mix. And for the delinquency rate improvement, so in this quarter, our M3+ delinquency rate continued to improve as we are enhancing our rate management capability as well as the pre- and post-financing management capability. We're also taking a prudent approach to providing assessment, especially when entering new fields. As China's largest used car transaction platform, Uxin has aggregated massive transaction and user behavior data as well as used car condition data. We have a deeply understanding not only of the -- also for the people, which gives us unique advantages in evaluating used car residual value and assessing user credit risk profile. As we're expanding our used car financing business, we have also accumulated rich experience in risk management and optimizing our pre- and post-financing management capabilities. So we will continue to invest and strengthen our risk management system and strive to enhance spread performance to loan facilitation through our platform.

For your last question for the restricted cash, our financing partner has been pleased with the credit performance of our user and our collateral management capability. As a result, we have been able to negotiate a better term with them such as deposit values required to hold advanced escrow accounts. We are confident that -- as they learn more about our platform and get more confident of our track record, we will be able to continue to improve the terms. In addition, we are looking for a new way to work together with financing partners that will enhance our liquidation -- liquidity position. We will have more on this for you in the coming quarters.

[Operator Instructions] As there are no questions at this time, I'll hand the call back to Nancy. Please continue.

Thank you, everyone, for joining today’s call and for your continued support for Uxin. We look forward to speaking to you again in the near future. Thank you.