Uxin, a leading e-commerce service for buying and selling used cars in China, posted a double-digit growth in revenue during the financial year to March (FY2023) despite challenging market conditions, but the decline in wholesale transition volume marred the fourth quarter’s performance, according to news release.

In FY2023, Uxin’s revenue soared 26% to RMB2.1 billion ($300 million U.S.), buoyed by significant 105% growth in retail transaction volume to 10,703 units. Overall, the company sold 20,029 units, representing 27.1% increase year over year.

Gross margin dropped to 1.2% compared with 2.9% in the prior financial year. Annual loss from operations widened to RMB357 million ($52.0 million) from RMB279 million.

“In fiscal year 2023, Uxin demonstrated resilience and ability to adapt to challenging circumstances. Despite the difficulties brought on by the COVID-19 pandemic throughout the year, we were able to achieve a 105% year-over-year retail transactions growth, coupled with a noteworthy 26% year over year increase in total revenue,” said Uxin CFO Feng Lin.

“As the effects of the pandemic began to subside, we had returned to our expected growth trajectory. Concurrently, we made significant improvements in our inventory structure, sales turnover, and overall margin profiles. Notably, we observed a recovery of our gross margin in the fourth quarter of fiscal year 2023, rebounding from 0.6% in the previous quarter to 2.3%.”

In Q4, Uxin saw revenue fall 27% year-on-year to RMB344 million ($50.1 million). The sales revenue also decreased 32.0% from RMB506 million in the prior period last year “due to the seasonal slowdown in the used car market and volatility in China’s new car market.”

During the period, loss from operations increased to RMB57.4 million ($8.4 million) from RMB96.5 million in the preceding quarter and RMB110 million in the same period last year.

The company projects sales revenue within the range of RMB270 million to RMB290 million for the first quarter to June 2023.

“Recent months have further solidified our confidence in the business, with our operational margins showing impressive growth. Our forecasts indicate that in the first quarter of fiscal year 2024, which concludes on June 30, 2023, our gross margin will exceed 6%, reaching a new high in the past three years,” said Lin.

“Faced with the disruptions posed by aggressive pricing strategies in the new car sector, we strategically maintained a controlled inventory level in the past quarter. As we ramp up our inventory and leverage the increasing sales volume, we remain firmly focused on reaping the scale benefits and achieving positive EBITDA at both our Xi’an and Hefei superstores by the end of 2023.”

Founded in 2018 and listed on the Nasdaq, Uxin has yet to turn a profit.

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