Online Used Car Dealer Uxin Down on Bigger Losses
China's Uxin Ltd. (Nasdaq: UXIN) reports an over 60% year-over-year increase in fourth quarter revenues Monday, sending its stock price higher.
The Beijing-based company said in a statement that revenues reached $66.9 million in the three months through December, up 61% year-over-year. Net loss widened to $138.6 million, or 15 cents per share, compared with $44.9 million, or 5 cents per share, a year ago.
The online marketplace for used cars said it sold 28,302 units in the fourth quarter, up 27% from one year ago. Its gross merchandise volume for a total sales dollar value jumped over 32% to $473 million during the fourth quarter.
For 2019, Uxin doubled revenues to $227.6 million, up 141% from 2018, while its net loss jumped nearly 31% to $285 million. The company reported losses from discontinued operations of nearly $100 million in 2019.
"Throughout the year, we helped over 97,000 consumers buy their car of choice online, enabling them to circumvent the tedious process of spending weeks or even months visiting dealership after dealership to find the ideal car," Kun Dai, the chief executive officer of Uxin, said in the statement.
Uxin transferred loan facilitation related business to Golden Pacer since 2019. The company divested its salvage car-related business to Beijing Hengtai Boche Auction Co. Ltd. in January for 330 million yuan cash($47 million). Then Uxin sold its B2B operations to China's largest marketplace for classifieds, 58.com Inc. (NYSE: WUBA) in March for $105 million.
After those divestitures, Uxin focuses on its 2C online used car transaction business. 2C means customer to customer, where customers can trade with each other, typically online.
"Our strategic focus is now squarely on our 2C online transaction business. Divesting from the loan facilitation, salvage car and 2B businesses will allow us to devote all our attention and resources towards developing and scaling up our 2C online transaction business," Dai added.
The company reported a potential loss for the first quarter, noting that a significant provision for credit losses and loss from guarantee liabilities will be provided due to the coronavirus outbreak. Those loans were facilitated in the past and haven't transferred to Golden Pacer.
Looking ahead, Uxin said it expects total revenues from continuing operations may reach 80 million yuan to 85 million yuan, or $11.4 million to $12.1 million in the first quarter, down 82% quarter-over-quarter.
Shares in Uxin traded at $1.41 per share Monday morning, down 3%.
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