Shares of Uxin Drop 18% After Company Posts $45.8 Million Loss in the Fourth Quarter
Looking ahead, Uxin said it expects revenue to be in the range of 900 million yuan to 950 million yuan for the first quarter of 2019.
Uxin Ltd. (Nasdaq: UXIN), a used car sales platform in China, saw its shares drop nearly 18 percent today to close at $3.79 per share in New York after the company announced its fourth quarter earnings.
The Beijing-based company said its revenue in the fourth quarter of 2018 increased more than 61 percent to $165.6 million from $105 million in the same period last year, thanks to increases in the transaction volume and Gross Merchandise Volume (GMV) of used cars sold through its retail (or its so-called "2C") business. Income of the 2C business jumped to $136.6 million in the fourth quarter, representing growth of nearly 120 percent from last year.
"We continued to attract consumers through Uxin's unique value proposition of a broad selection of used cars, digital transparency and a one-stop solution," said Kun Dai, founder and CEO of Uxin. "We facilitated over 160,000 used car transactions on our 2C platform in the fourth quarter, representing a year-on-year increase of 93.6%."
Dai added, "More importantly, we experienced an exponential growth in cross-regional transactions, with transaction volume exceeding 10,000 used cars in December alone, and over 22,000 in the fourth quarter. This reflects the revolutionary impact of our business model on China's used car supply chain, as well as growing appreciation of Uxin's brand and services."
Despite the rapid growth in 2C business, however, Uxin still recorded a net loss of $45.8 million in the fourth quarter, compared with a net loss of $135 million in the same period last year.
As of Dec. 31, 2018, the company had cash and cash equivalents of $116.7 million, short-term investment in the form of time deposit and other investment products of $86.9 million, and restricted cash of $293.3 million.
Looking ahead, Uxin expects total revenue to be in the range of 900 million yuan to 950 million yuan for the first quarter of 2019.
"Looking into 2019, we will continue to increase our focus on the 2C business. From a commercial perspective, we see much greater growth potential in the 2C business, especially in terms of cross-regional transactions. We have identified a number of strategic initiatives to strengthen our capabilities on this front," Dai said.
Uxin went public last June, raising $400 million by selling 25 million shares. In addition to its online sales platform, the company has more than 670 service centers in more than 270 cities in China.