Ladies and gentlemen, thank you for standing by and welcome to Yushin Earnings Conference Call for the quarter ended June 30th, 2026. 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. Allie Wang. Please go ahead, Allie. Thank you, Operator. Hello, everyone. Welcome to UCI's earnings conference call for the second quarter ended June 30, 2026. On the call with me today, we have DK, our founder and CEO, and John Lin, our CFO. DK 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 uncertainty, please refer to our filings with the SEC. Now, with that, I'll turn the call over to our CEO, DK. Please go ahead, sir. 大家好,很高兴再次通过电话会的形式与各位投资者交流,感谢大家来参加我们的业务电话會。 今天我想先介绍一下本季度的经营情况,并分享我们针对市场变化所做的一些调整。 Hello everyone, and thank you for joining Yujin's earnings conference call today. It is a pleasure to reconnect with our investors through this call, and we appreciate your continued interest and support. I would like to begin with an overview of our operating performance test quarter and then discuss some of the adjustments we have made in response to changing market conditions. 2026 has become a year of accelerated consolidation for China's automotive industry. The new car market has remained under pressure since the beginning of the year. In the second quarter, new passenger vehicle sales in China declined by more than 20% year-over-year, with internal combustion engine or ICE car sales down nearly 40%. By comparison, demand in the used car market had shown greater resilience, with nationwide used car transactions declining by only about 1.4% year over year in the second quarter. However, the rapid decline in new car prices, particularly for ICE cars, continue to flow through to the used car market, accelerating industry consolidation. Nearly 30,000 brick-and-mortar used car dealerships exited the market during the first half of the year, and we expect 50,000 to 60,000 dealerships to exit for the full year, representing more than 20% of the industry. Thank you. Yuxin significantly outperformed the broader market in the second quarter. Our retail transaction volume reached 19,610 units, up 89% year-over-year and 19% sequentially. Our net promoter score, or NPS, remained at 68, continuing to rank among the highest in the industry. Price volatility during the second quarter had a temporary impact on our gross margin, and we proactively accelerated inventory adjustments and sell-through. Since the beginning of the third quarter, our per-unit profitability has recovered rapidly, and we expect our overall gross margin to recover to above 6%. Since the beginning of this year, we have also continued to advance the digitalization of our business while systematically upgrading our operations. As we accumulate more transaction data, our pricing system has improved significantly in pricing accuracy, coverage, and response time, enabling us to respond to market changes more quickly and accurately. These improvements in our pricing capabilities are also reflected in our operating efficiency. Our overall inventory turnover has now shortened from approximately 30 days to approximately 20 days. We believe 2026 could mark the beginning of a new phase in the evolution of China's used car industry. Traditional operating models are rapidly losing ground, while the industry is gradually shifting from a fragmented and non-standardized model toward a more scaled, standardized, and digitalized retail model. We believe the next two to three years will be a critical period for the reshaping of China's use car market. Over the past few years, we have completed the verification of the super market model and continued to accumulate advantages in the core operation capabilities such as vehicle pricing, inspection and preparation, storage cycle and customer service. Now we can maintain a high-speed storage cycle of about 20 days and have a good level of single-car operations. 现有卖场的销量和运营效率将会持续爬坡。新卖厂包括银川、广州、无锡、重庆、石家庄和绍兴层面的六个项目正在建设。同时,我们也在稳步推进与更多城市新的合作,持继扩大优信仓土卖长在全国范围内的布局。 Throughout this transition, Yuxin will continue to maintain its leading position. Over the past several years, we have validated our Superstore model and continue to strengthen our core operating capabilities across vehicle pricing, inspection and reconditioning, inventory turnover, and customer service. Today, we are able to maintain a rapid inventory turnover of approximately 20 days while achieving healthy per-unit profitability. Sales volumes and operating efficiency at our existing superstores will continue to ramp up while six new superstores in Yinchuan, Guangzhou, Wuxi, Chongqing, Shijiazhuang, and Shaoxing are currently under development. At the same time, we're steadily advancing discussions with additional cities on new partnerships as we continue to expand our warehouse-style superstore network nationwide. Finally, I will would like to share our outlook for the third quarter. Our inventory turnover and profitability have both returned to healthy levels. However, we believe risks in the automotive market remain elevated. We are therefore maintaining a prudent operating approach, placing greater emphasis on inventory turnover per unit profitability and capital efficiency. For the third quarter, we expect retail transaction volume to reach between 20,500 and 21,000 units, representing year-over-year growth of nearly 50 percent. That's all for today. Next, our CFO, John, will show you the financial situation. John, please. With that, I will turn the call over to our CMO to walk you through the financial results. Thank you, DK. Hello, everyone. I will now walk you through our financial performance. In the second quarter, our retail transaction volume reached 19,610 units, up 89% year-over-year and 19% sequentially. Despite continued pressure across the broader automotive market, we maintained inventory turnover of approximately 30 days and delivered business growth well above industry level. The average price of car sales, which is ASP, is 5.5 million yuan. Last year's statistics were 5.9 million yuan, and the last quarter was 6.1 million yuan Although the market price decline caused ASP to fall But the rapid growth of sales is under this influence The current price range of our cars can basically cover the needs of most mainstream consumers As the price fluctuates gradually in the car market 我们预计车辆的ASP不会再出现大幅的下滑,整体将保持在相对稳定的水平。 Retail vehicle sales revenue totaled 1.08 billion RMB, up 78% year-over-year and approximately 7% sequentially. The average selling price, or AST, of our retail vehicles was 55,000 RMB compared with 59,000 RMB in the same period last year and 61,000 RNB last quarter. While lower market prices resulted in a decline in ASTs, the rapid growth in sales volume offset this impact. Our current price range covers the car buying needs of the vast majority of mainstream consumers, as price volatility in automotive market gradually eases, we do not expect ASP to decline significantly from current levels and expect it to remain relatively stable overall. turning to our wholesale business our wholesale transaction volume was 2289 units in the second quarter up 88 percent year over year and 36 percent sequentially total wholesale revenue was 37.4 million rmb combining both retail and wholesale total revenue for the quarter reached 1.151 billion RMB, up 75% year-over-year and 7% sequentially. During the second quarter, auto prices, particularly prices for new ICE cars, underwent a rapid adjustment over a relatively short period, which had a direct impact on the growth margin of our existing inventory. We also proactively accelerated the sell-through of cars affected by these price fluctuations. As a result, our gross margin fluctuated significantly during the quarter, reaching negative 0.7% compared with 5.2% in the same period last year and 7% in previous quarter. With the earlier inventory reset now largely complete and inventory turnover further accelerating, we have achieved a more stable and efficient balance between procurement and sales. Since the beginning of the third quarter, our per unit profitability has recovered significantly and we expect our overall growth margin to recover to above 6% in the third quarter. 费用方面,我们继续保持严格的成本费용管控。尽管业务规模和卖场的网络在持续的扩大,我们二季度的销售和市场费永整体是保持稳定。那经调整后的EBITDA亏损为1.2亿元人民币,主要反映了毛利率下降带来的阶段性影响。 Turning to expenses, we continue to maintain strict cost discipline. Despite the continued expansion of our business and superstore network, our sales and marketing expenses remain broadly stable during the quarter. Adjusted EBITDA loss was 120 million RMB, primarily reflecting the temporary impact of the lower growth margin. Moving to our outlook for the third quarter, we are accelerating inventory turnover while maintaining a prudent inventory procurement strategy, we expect retail transaction volume to be between 20,500 and 21,000 units, with total revenue between 1.16 billion RMB and 1.19 billion RMD, and gross margin recovering to above 6%. As our gross margin recovers and operating efficiency improves, we expect our profitability to improve further. 最后跟大家同步一下我们融资的进展 我们近期又收到来自未来资本的400万美元的投资款 未来資本剩余400万美金的投資的交割也在按计划的推进 并且未来质本已经确认将继续按照2.86美元每ADS的价格完成交削 与此同时逾越资本当在积极推进其对公司投资�的ODI的备案 Finally, I would like to provide an update on our financing. We recently received $4 million in investment proceeds from Neo Capital, and the closing of the remaining $4 billion investment is proceeding as planned. Neo Capital has confirmed that it will proceed with the remaining investment at $2.86 per ADS. Meanwhile, Joy Capital is also actively advancing the Overseas Direct Investment, or ODI, filing process for its investment in the company. 以上就是我们今天准备和大家分享的内容,谢谢各位。 主持人,我们可以开始问答环节,谢谢。 That concludes our prepared remarks for today. Thank you, everyone. Operator, we're now ready to begin the Q&A session. We will now begin the question and answer session. 我们收到了三个来自投资人的问题。 第一个问题是,公司目前库存周转已经从过去约30天进一步缩短到20天左右,想请问下这样的高周轮是如何实现的?这是特殊市场环境下主动降低库层的结果,还是未来希望长期维持的经营水平? We received three questions from investors. The first question is, Yuxin has further shortened its inventory turnover from approximately 30 days to around 20 days. Could management discuss how you have been able to achieve such rapid turnover? Is this primarily the result of proactively reducing inventory in response to the current market environment, or is this an operating level you expect to maintain over the long term? Okay. 尤其在过去的,尤起在第三季度,最近两个月是这样的一个周转的表现。 那背后首先是基于AI的运用,我们升级研发了一系列的技术能力, 正在AI相关的技術能力正被逐步的应用到定价、调价和风险预警这些核心的环节中。 那我们的定仪的准确率、覆盖率和响应速度都显著的持续的提升, 所以目前对于库存周轮效率的改善比较明显。 Thank you for the question. There are several factors behind our ability to shorten inventory turnover from approximately 30 days to around 20 days. First, we have been applying AI across our operations. A range of technology capabilities we have developed and upgraded are gradually being deployed across key areas such as pricing, price adjustments, and risk alerts. The accuracy, coverage, and response speed of our pricing capabilities have continued to improve, and we're already seeing a meaningful improvement in inventory turnover efficiency. Second, we have further integrated our end-to-end operating systems. We continue to upgrade our core systems across inspection and reconditioning, inventory management, and CRM. ERM, using technology to improve our assessment of car conditions, market demand, and customer needs, and to increase the efficiency of car matching and transactions. As these different parts of our operations become more closely connected, the overall efficiency from procurement through sales has also improved. faster cycle can significantly reduce our risk threshold. Now, when such a market is fluctuating, it will reduce the loss brought by the reduction in inventory. Therefore, from a complete economic cycle, high cycle will not only sacrifice single-car profit, but also help to achieve a stable and healthy comprehensive single-cars profit. At the same time, high cycle also means that The longer a used car remains in inventory, the greater the price risk we assume. Faster turnover significantly reduces our risk exposure and helps limit inventory impairment losses when the market fluctuates. Therefore, when viewed across a full operating cycle, faster turnover does not come at the expense of per-unit profitability. Instead, it helps us achieve more stable and healthier overall per- unit profitability. At the same time, faster turn-over allows the same amount of inventory capital and the same workforce to support a larger sales volume. As workforce and capital efficiency continue to improve, we also expect to unlock greater operating leverage. 所以对于优信 对于我们来说,20天左右的 周转不是一个 短期的防守策略,而是我们希望 长期去保持的一个 核心的运营目标。 So for us, inventory turnover of around 20 days is not a short-term defensive strategy. It is a core operating target that we intend to maintain over the long term. 谢谢,这是我对这个 问题的回答。 Thank you, that's my answer. 下一个问题 第二个问题是二季度车市经历了较大幅度调整, 想请管理层分享一下近期二手车 市场行情和竞争格局有哪些变化, 对2026年剩余时间的行业走势怎么看? The second question is the automotive market experienced a significant adjustment in the second quarter. Could management share what you have been seeing recently in terms of used car market conditions and the competitive landscape? How do you view the industry outlook for the remainder of 2026? Thank you for the question. Based on recent market performance, overall auto consumption remains relatively weak. Nationwide passenger vehicle retail sales declined by more than 20% year-over-year in both July and August, with ICE car retail sales down approximately 40%. This pressure has also carried over into the used car market. Nationwide used car transactions declined by 6% year over year in July and by 11% in August. On pricing, we believe the most severe adjustment occurred in the second quarter. new car prices, particularly prices for ICE cars, declined rapidly over a relatively short period, which has a significant impact on used car prices. Since the beginning of the third quarter, the market has remained under some pressure, but we have not seen the kind of sharp monthly declines that occurred in the second quarter. Overall market conditions are gradually stabilizing. 行业的初清仍在继续,今年上半年已有接近3万家实体奥尔车商退出了市场,我们预计全年可能会有5万到6万家退出,行与淘汰比例超过20%,那这一轮调整会加快行丶格局的重塑,市场份额也会进一步向具备规模化、标准化和数字化能力的企业去集中。 At the same time, industry consolidation is continuing. Nearly 30,000 brick-and-mortar used car dealerships exited the market in the first half of this year, and we expect 50,000 to 60,000 dealerships to exit the market for the full year, representing more than 20% of the industry. We believe this market adjustment will accelerate the reshaping of the industry, with market share becoming increasingly concentrated among companies with scale, standardized operations, and digital capabilities. For Youxin, this also creates an opportunity to gain market share. we have maintained a relatively prudent approach to inventory procurement in the third quarter, while shortening inventory turnover to around 20 days. At the same time, we expect our retail transaction volume to continue growing by nearly 50% year-over-year, significantly outperforming the broader industry. The fourth quarter is typically a peak season for the used car market. Our current view is that market volatility is unlikely to be as severe as it was in the second quarter, although risks remain. We will therefore adjust our inventory levels prudently based on market conditions. If prices stabilize further, we will accelerate inventory procurement. If volatility persists, we'll continue to maintain rapid inventory turnover and drive sales growth through faster turnover and greater capital efficiency to reduce the impact of price fluctuation. Okay, that's my answer. That's my question. The third question is, the company previously announced a plan by the CEO to increase the company's stock price. I would like to ask the management to share the current implementation progress. The third one is, the company previously announced a plan by the CEO to purchase additional company shares. Could management provide an update on the execution of this plan? Thank you for the question. Over the past few years, we have validated our warehouse-style superstore model and begun expanding our footprint nationwide. Our sales volume, operating efficiency, and core capabilities have all continued to improve. I believe the company is moving in the right direction. Given the recent performance of our share price, I decided to use my own funds to purchase additional using shares in the open market as a tangible demonstration of my confidence in the company's long-term value. As previously announced, an entity controlled by me established a Rule 10b-5-1 trading plan on June 30th to purchase up to $5 million of the company's ADS at a price of no more than $2.85 per ADS. Following the required 90-day cooling-off period, purchases under the plan will be eligible to begin on September 28. The timing and pace of purchases will be determined in accordance with the pre-established trading plan and will strictly comply with Rule 10b-5-1 and other applicable securities trading rules. The actual amount that can be purchased on any given day will also be subject to factors such as the recent trading volume of the company's ADS. As a result, the purchases will be carried out gradually over time. I remain highly confident in the company's long-term development. Through these purchases, I also hope to further align my personal interests with the long- term interests of the company and all of our shareholders. That's my answer. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Ali Wang for any closing remarks. Thank you again for joining today's call and for your continued support and using. We look forward to speaking to you again soon. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.