Ladies and gentlemen, thank you for standing by, and welcome to Uxin's Earnings Conference Call for the Quarter Ended September 30, 2021. 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 would 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 September 30, 2021. On the call today are D.K., Founder and CEO of Uxin; and John Lin, CFO of Uxin. 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 start, I would like to remind you that this call may contain forward-looking statements made under 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 known or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. Uxin does not 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, D.K. D.K, 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 prepared remarks today will still be in both English and Chinese. [Foreign Language] In the second quarter of fiscal year 2022 which ended on September 30, we maintained solid growth in terms of both sales volume and revenue. Total transaction volume in the quarter was 3648 units, which is an increase of 21% compared with last quarter. The retail transaction volume was 1027 units an increase of 51% compared with last quarter. [Foreign Language] In terms of our reputation in customer, our persistent efforts to improve vehicle quality and service experience are generated through results. In the quarter, our sales Net Promoter Score or NPS increased for the fourth consecutive quarter to 56 a new record high versus 42 in the previous quarter. Going forward, we will continue to optimize and upgrade the quality of our products and services in order to provide best-in-class one full shop purchasing experience to our customers and drive high-quality sales growth through positive word of mouth. [Foreign Language] We completed an important milestone in our business development in this November, with our IRC successfully launched and running. We launched our second IRC in Hefei, Anhui Province. If China has the largest amount of used car transactions, and Hefei province is one of the fastest growing areas for car consumption in the region. The rollout of our second IRC in Hefei which will present a key strategic step in our business expansion. Specifically, this one of Hefei IRC covers a total area of about 1000 square meters with a warehousing capacity of up to 2000 vehicles. Currently, the combined number of vehicles available for sale in Hefei is roughly 1500, covering 52…

Okay. Thanks, D. K. Hello, everyone. Let me walk you through our financial performance in the quarter ended September 30, 2021. The business was growing steadily in this quarter. We started to increase our available for sales inventory in Xi’an IRC since we received the first tranche of the new investment in early July, and then reached the full capacity at around 600 cars in mid-August. The improved inventory level enabled us to ramp up our retail sales volume. The retail volume increased to 51% quarter-to-quarter and overall sales volume increased to 21% quarter-to-quarter. As a result, our revenues increased by 24.5% compared to last quarter. Meanwhile, we spend a tremendous amount of efforts to minimize our cost and expense structure, build a lean organization and drive efficient operational processes. The impact has been reflected in our continuous improving operational line. I would like to comment specifically, is the fair value adjustment impact of the issuance of senior convertible preferred stock as a result of our financing deal with NIO Capital and Joy Capital, because the stock price rose significantly since the company announced entering into [indiscernible] with these two investors on April 1, 2021, this will lead to a paper loss of RMB 1654.9 million or U.S.$256.8 million which impacted the net profit. This loss is purely driven by accounting treatment. It is a non-cash item and it has no impact on our cash flow. And it is not related to our business operation. With respect to the financing transaction with NIO Capital and the Joy Capital that we announced earlier, as part of the segment closing of the U.S.$50 million, we have received U.S.$ 27.5 million cash ahead of schedule. With respect to receive the remaining U.S.$22.5 million in the coming months as planned. As D.K. said earlier,…

So, operator, we are ready to receive the questions. Thank you.

Certainly, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] We have the first question, this is coming from the line of Fei Dai from TF Securities. Please go ahead.

[Foreign Language] Repeat my question in English. Judging from the financial situation of the last quarter, we noticed that the wholesale vehicle business has contributed more revenue to the overall performance of the company. Judging from this quarter, this proportion is being further optimized. How does the company understand the development of the business and what will be the impact on the retail vehicle business in the future? Thank you.

[Foreign Language] In Uxin, currently the sales breakdown between our retail and the wholesale business is 1:2. Given our brand impact and market reputation, many customers come to us to sell their used vehicles. However, currently, we don't sell all the used cars sourcing from individual car owners through our retail business for the few reasons. First, we have to consider the space capacity, meanwhile, we would like to control the level of cash tie-up in our inventory, also, it takes time to increase our sales capacity. Therefore, for the cars that are not up to our retail vendors and those stay beyond our inventory capacity, we will sell through our wholesale business and accelerate our inventory turnover rate. [Foreign Language] In the long run, this percentage breakdown will gradually change as our retail inventory level gradually increase and the Hefei and Xi'an IRC have both been in operation, our retail sales will for sure gradually climb. We expand the sales breakdown between retail and wholesale to be 1 to -- to be 2:1 ideally, which means retail sales will be twice as much as wholesale sales.

[Foreign Language]

Thank you. Shall we go to the next --

Operator, please go ahead to next question.

Certainly. We have the next question, this is coming from the line of Jay Jin from China Securities. Please go ahead.

[Foreign Language]

Yes. Sorry, could you please repeat your question in English?

I can translate for you.

Okay. I have two questions. First one is about the net loss, could you explain the impact of the fair value change for the net loss? The second question is about the cash flow, what's the expectation of the following quarter's cash flow, okay?

[Foreign Language] Okay. This is a people loss related to our financing transaction, which was announced earlier this year. It's a purely accounting treatment under the U.S. GAAP reconciliation. Due to the change in stock price after the announcement of the deal with NIO Capital and Joy Capital, the price of Uxin stocks resulted in the loss on our incoming statements. However, this is a non-cash item, which will not have any impact on the company's cash flow status and it's not related to our business development. [Foreign language] In terms of the cash flow condition after receiving the funding for our investors, we have ample cash on the balance sheet. We received the first tranche of $100 million in July and we are closing the second tranche of $50 million, which is also ahead of original schedule. This reflects the investors' true reputation and confidence of our operation and business development. Meanwhile, the follow-on warrant, a part of the transaction also focused well as we are working close with investors. Such funding will support our future business development. As of the date, our business is doing well and keep expanding with the continuous growth of our vehicle inventory. Overall speaking, as we have made our plan of the usage of our cash, I believe our cash balance is sufficient. [Foreign Language]

[Foreign Language]

Operator, please go ahead to next question.

Certainly. We have the next question, this is coming from the line of Tengwei Liu from CITIC Securities. Please go ahead.

[Foreign Language]

[Foreign Language]

[Foreign Language] Let me translate to English. And my question is about the electric vehicle used cars, and on the one hand, it's very fast -- very -- cost growth very fast, and however there's some other problems, for example, the discount or how to estimate its values. And I would like to hear from you about what our plans and views about the secondhand electric vehicles? Thank you.

[Foreign Language] We have launched our used EV business. EV is a major trend in auto industry, although the tool of existing EVs is still in the relevance more amount, but there is a clear sign that the demand from owners of the EV cars to switch or upgrade their vehicles is increasing and used in electronic vehicles are popular and sellable in the market. The potential market size for used electronics vehicles will be as large as conventional gas power used cars. Although, there are some differences between this category in terms of inspection, reconditioning, pricing and sales. [Foreign Language] We have already launched our used electronic vehicle business. Currently, we offer used EV of multiple well-known EV brands. Meanwhile, we continue to build out our electronic vehicles service systems and refine our capabilities on a number of fronts, including in fashion pricing and aftersales service. We are also evolving the best way to sell used electronic vehicles. We hope to contribute to the healthy development of the used electronic vehicle markets in China by leveraging our extensive know-how and capabilities in used vehicle market build that through use of operations. [Foreign Language]

[Foreign Language]

Thank you. We have no further questions at this moment. I would like to hand the conference back to our host for any ending remarks. Please take over.

Thank you, operator. Thank you for all the investors joining us today. We look forward to see you next time. Goodbye.

Goodbye.

Goodbye. Thanks.

Thank you. That concludes our conference call for today. Thank you all for your participation. You may disconnect now.