#China #Beijing #Uxin Limited #used cars #Retail Growth

Uxin Limited 2024 Annual Shareholder Update

Dear Shareholders,

I want to take a moment to express my heartfelt gratitude for your continued support and interest in Uxin Limited. It's an honor to share with you the key milestones and strategic insights from the past year, as well as our outlook for the future.

Economic Landscape in 2024

2024 proved to be a challenging year for the overarching economy in China. The market confronted ongoing macroeconomic difficulties, along with fierce competition in the new car segment, impacting the used-car sector. Despite these challenges, the landscape for used cars showed resilience. Last year, China's used-car market saw an impressive annual transaction volume of 19.6 million units, a 6.5% increase year-over-year. This was significantly higher than the 4.5% growth observed in the new car market. The introduction of trade-in subsidy programs by local governments in September helped fuel vehicle turnover and rejuvenate demand in the market.

Achievements of Uxin Limited in 2024

We take pride in the successful performance of our superstore operations throughout the year, which underscores the scalability and effectiveness of our business model. 2024 marked a notable growth trajectory for our used-car retail operations as we achieved accelerated expansion.

1. Retail Transaction Growth: Uxin's retail segment outperformed the market, with volume surging from approximately 3,100 units in Q1 to 8,500 in Q4 of 2024. This remarkable achievement translates to a year-over-year increase of over 130% as we concluded the year with nearly 22,000 retail transactions. Our disciplined inventory strategy allowed us to scale effectively, ending the year with stock levels approximately three times higher than at the beginning of 2024, alongside a beneficial inventory turnover cycle of about 30 days.

2. Enhancing Brand Loyalty: As we expanded our operations, we emphasized strengthening our brand equity and customer loyalty. By closely analyzing customer feedback, we refined our after-sales service processes, leading to improved response times and service quality. Our Net Promoter Score climbed to 65 in the fourth quarter, showcasing our commitment to maintaining a trusted position in the used-car retail market.

3. Digital Transformation: Our pursuit of digital capability improvements has been a focal point. By integrating advanced data analytics and large language models, we’re enhancing efficiency in pricing, vehicle reconditioning, and customer acquisition, ultimately fostering a more standardized approach that supports growth on a larger scale.

4. Financial Improvements: Our financial status continues to strengthen, with our first positive adjusted EBITDA reported in Q4 of 2024, marking a significant milestone. With a sales increase, we achieved economies of scale reflected in our gross margin improvement from 4.8% to 7.0% in just one year.

Future Strategies for 2025

Looking ahead, we plan to build upon our existing superstore model through a disciplined expansion strategy that aims to enhance profitability.

• - Capacity Expansion: We intend to optimize operations at our existing locations like Xi'an and Hefei, where the current capacity isn’t fully utilized. Our goal is to ramp up inventory while sustaining effective turnover rates.
• - New Store Openings: In 2025, we aim to launch two to four new superstores in key cities, solidifying our retail ecosystem. Following preliminary success in Wuhan, we anticipate the Zhengzhou superstore to launch in the latter half of the year.
• - Operational Targets: Our objectives for 2025 include achieving over 100% growth in retail transaction volume and reporting a full year of positive adjusted EBITDA.

The increasing number of vehicles entering the secondary market suggests an evolving trillion-RMB used-car sector poised for substantial growth over the next decade. Uxin, as a pioneer in this space, stands ready to embrace this transformation.

We remain committed to delivering exceptional used-car products and services to our customers and continually strive to create lasting value for our shareholders, many of whom have supported us through every phase of our journey.

Sincerely,
Kun Dai
Chairman and CEO, Uxin Limited

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Safe Harbor Statement: This announcement contains forward-looking statements, which involve inherent risks and uncertainties. Actual results may differ significantly from those predicted or expressed due to a variety of factors, including market trends and regulatory changes.